UMBRA Technologies Ltd. v. VMware, Inc.

Background

UMBRA Technologies Ltd. (UK), UMBRA Technologies Limited (CN), and UMBRA Technologies (US) Inc., doing business as UMBRA Technologies, sued VMware, Inc. UMBRA alleged that VMware’s VMware NSX, VMware SD-WAN, VMware vSphere, and VMware Horizon products infringed four U.S. patents. VMware filed a motion to dismiss and then asked to transfer the case to the Northern District of California.

VMware argued that the Northern District of California was more convenient because VMware is headquartered there, relevant witnesses and documents were there, and relevant third parties were there. VMware also argued that the accused products were mainly designed and developed there or abroad. UMBRA opposed transfer, arguing that VMware had not identified specific document types or locations for physical documents, that electronic documents could be transferred, and that some VMware employees or documents might be in the Western District of Texas.

Legal standard

Under 28 U.S.C. § 1404(a), a federal district court may transfer a civil case to another district where the case could have been filed when transfer would be more convenient for the parties and witnesses and would serve the interests of justice. The court must first determine whether the proposed district has jurisdiction and proper venue. It then weighs private-interest factors, such as evidence and witnesses, and public-interest factors, such as court congestion and local interest. The plaintiff’s choice of forum receives some weight, but it is not conclusive.

Court’s analysis

The court found that the case could have been filed in the Northern District of California because VMware was subject to personal jurisdiction there and a substantial portion of the relevant events occurred there.

The court found that access to proof strongly favored transfer. It reasoned that VMware, as the accused party, was likely to have most of the relevant documents and that those documents were more likely to be in the Northern District of California. The court also rejected the argument that electronic documents make access equally convenient everywhere.

The court found that the availability of compulsory process—the court’s power to require a nonparty witness to attend—slightly favored transfer because a founder of VeloCloud Networks, Inc., a company now owned by VMware, was located in the Northern District of California. The court treated a former employee as a nonparty witness for this analysis.

The court found that witness-attendance costs strongly favored transfer. VMware stated that most likely witnesses were in or near Palo Alto, including engineers and employees knowledgeable about marketing and licensing. VMware identified 158 employees on product teams in the Northern District of California and five in the Western District of Texas. The court found that UMBRA had not meaningfully refuted VMware’s showing and that there was no reason to believe the employees UMBRA identified in Texas would provide relevant testimony.

The court found other practical problems neutral. It considered the fact that UMBRA had filed a similar case against Cisco Systems, Inc. in the Western District of Texas, but concluded that the Cisco case involved a different defendant and different accused products and therefore would likely involve substantially different discovery and evidence.

Among the public-interest factors, the court found that court congestion favored transfer. Although the Western District of Texas generally scheduled patent trials somewhat faster, the court concluded that the Austin Division’s heavy caseload and slower district-wide times for resolving motions outweighed that difference. The court also found that local interest strongly favored transfer because VMware was headquartered in the Northern District of California and the technologies were mainly designed and developed there or abroad. The parties agreed that familiarity with federal patent law and conflicts of law were neutral.

Disposition

The court concluded that the factors overwhelmingly favored transfer and that the Northern District of California was clearly more convenient. Judge Robert Pitman ordered that VMware’s motion to transfer venue was GRANTED and that the case was TRANSFERRED to the Northern District of California. The order did not decide whether VMware infringed UMBRA’s patents.