Atari Interactive, Inc. v. Target Corporation

Background

Atari Interactive, Inc. sued Target Corporation over Target’s alleged creation or authorized creation and use of a promotional game called “Foot Pong.” Atari asserted claims involving trademark infringement and counterfeiting, false designation of origin, trademark and trade dress dilution, common-law unfair competition, and New York General Business Law. Atari alleged that the game was similar to Pong but was projected onto a store floor and played with a person’s feet.

The complaint specifically described a store in Minnesota. Atari later stated that discovery showed the projection device had been installed in Target stores nationwide, including three New York stores, but Atari did not provide additional information showing whether the game was actually projected or promoted at those stores. Target employees involved in the project worked in Minnesota, and Target’s headquarters were there. Atari had its corporate headquarters in the Southern District of New York.

Target moved under 28 U.S.C. § 1404(a) to transfer the case to the District of Minnesota. Target also asked the court to dismiss Atari’s trademark-counterfeiting claim and Count V, which alleged a violation of New York General Business Law § 349.

Transfer Standard

Section 1404(a) allows a federal court to transfer a case for the convenience of the parties and witnesses and in the interest of justice. The court explained that the party seeking transfer bears a strong burden and that courts weigh several factors, including the plaintiff’s choice of forum, witness convenience, access to documents and other proof, convenience of the parties, the location of the events, the ability to compel unwilling witnesses, the parties’ resources, familiarity with governing law, and judicial economy.

The court found that the case could have been brought in Minnesota because Target was incorporated and had its principal place of business there, and Atari did not contest that point.

Analysis

The court found that the location of the events favored transfer because the documented events involved a Minneapolis store and a Minneapolis/St. Paul Business Journal article. The court also noted that Target did not develop the relevant intellectual property in New York.

Atari’s choice of New York received less weight because the operative facts had little connection to that district, although the court did not find that Atari had engaged in forum shopping to the extent Target suggested. The witness-convenience factor favored transfer because three Target employees were likely to be deposed in Minnesota, Target’s corporate witness likely lived near Minneapolis, and two key witnesses were directly involved in the project. Two Atari witnesses were located in New York.

The location of documents and access to other proof were neutral because neither side showed that producing documents in one district would be substantially more difficult. Convenience of the parties favored transfer because Minnesota was where the events occurred and where Target was headquartered; the court also noted that Atari had previously filed the case in California. The ability to compel unwilling witnesses favored transfer because many key witnesses were in Minnesota and some were no longer Target employees. The parties’ relative means were neutral because both were large corporations. Familiarity with governing law weighed slightly against transfer because Atari asserted New York-law claims, although both federal courts were equally familiar with the federal legal principles involved.

Ruling

The court concluded that the location of the operative facts, witness convenience, party convenience, and the ability to compel unwilling witnesses favored transfer. The remaining factors were neutral or only slightly opposed transfer. It therefore held that Target had made a meritorious motion to transfer the case in its entirety and GRANTED the motion to transfer.

Judge Wang declined to rule on Target’s motion to dismiss because the dismissal issues should be decided by the transferee court. The court delayed issuing the transfer order until after December 24, 2019, to allow Atari to seek a stay while requesting review under Federal Rule of Civil Procedure 72(a). The opinion states that, absent a stay, the Clerk would carry out the transfer by separate order.