Kaufman v. Salesforce.com, Inc.

Background

Michael Philip Kaufman sued Salesforce.com, Inc. under the patent-infringement statute, alleging that Salesforce’s “Sales Cloud,” “Service Cloud,” and “Marketing Cloud” products used a method of generating user interfaces that infringed two patents. Kaufman was an inventor and assignee of the patents. The opinion states that Kaufman resided in the Southern District of New York and that co-inventor Micah Philip Silverman lived in Virginia Beach, Virginia. Salesforce was incorporated in Delaware and had its headquarters and principal place of business in San Francisco, California.

Salesforce moved under 28 U.S.C. § 1404(a), a statute allowing a court to transfer a civil case for the convenience of the parties and witnesses and in the interest of justice. Salesforce argued that the Northern District of California was the proper forum because many Salesforce employees and other potential witnesses were located there, and because much of the development of two accused products occurred there. The opinion states that the case could have been brought in that district.

Earlier Transfer Decision

Judge Sarah Netburn, the magistrate judge supervising general pretrial matters, granted Salesforce’s motion to transfer. She found three factors neutral: the parties’ convenience, the parties’ relative means, and the court’s familiarity with the governing law. She found Kaufman’s choice of forum and trial efficiency and the interests of justice favored keeping the case in New York.

Judge Netburn nevertheless found that four factors favored transfer: the convenience of witnesses; the location of relevant documents and access to evidence; the location of the events underlying the dispute; and the ability to require unwilling witnesses to attend. She gave substantial weight to the witness-convenience and location-of-events factors. The opinion states that Salesforce identified numerous current and former employees and other potential witnesses in or near the Northern District of California, while Kaufman identified himself and Silverman as potential witnesses. Judge Netburn concluded that the balance of factors supported transfer by clear and convincing evidence.

Kaufman’s Objections

Kaufman objected under Federal Rule of Civil Procedure 72(a), which permits a district judge to change or set aside a magistrate judge’s nondispositive order if it is clearly erroneous or contrary to law. He challenged Judge Netburn’s weighing of the four factors favoring transfer and criticized what he described as Salesforce’s speculative evidence.

The court rejected Kaufman’s arguments. It held that Judge Netburn had carefully considered and balanced all the relevant factors, including Kaufman’s choice of forum. The court also rejected the argument that Kaufman’s choice of New York should be decisive. Although that choice received substantial consideration, the court explained that its importance was reduced because the main events underlying the patent claims occurred elsewhere.

The court upheld Judge Netburn’s findings that the witness-convenience factor favored transfer because many current and former Salesforce employees with knowledge of the accused products were in the San Francisco Bay Area. It also upheld the finding that the ability to compel witnesses favored transfer because numerous nonemployees who might testify were located in the Northern District of California.

The court further upheld the finding that the location of the events underlying the claims favored transfer. Although the patents were developed in New York, the accused products were designed and developed primarily in the Northern District of California, and many of the people involved in that work were located there. Finally, the court held that it was proper to consider the location of relevant documents and evidence. Even though electronic documents reduced the importance of this factor, the greater bulk of the sources of proof remained more accessible in California.

Ruling

Judge John P. Cronan found that Judge Netburn’s transfer decision was well reasoned, supported by the record, and neither contrary to law nor clearly erroneous. The court overruled Kaufman’s objections and affirmed the April 29, 2021 transfer order in its entirety. The clerk was directed to transfer the case to the United States District Court for the Northern District of California.