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Macronix International Co., Ltd. v. Spansion Inc.

United States District Court, E.D. Virginia, Richmond Division

March 10, 2014

MACRONIX INTERNATIONAL CO., LTD., a Taiwanese Corporation,
v.
SPANSION INC., a Delaware Corporation, et al., Defendants.

          MEMORANDUM OPINION

          Robert E. Payne, Senior United States District Judge

         This matter is before the Court on DEFENDANTS' MOTION TO TRANSFER VENUE TO THE NORTHERN DISTRICT OF CALIFORNIA, SAN FRANCISCO DIVISION, PURSUANT TO 28 U.S.C. § 1404(a) (Docket No. 26) . For the reasons set forth below, the motion will be granted.

         BACKGROUND

         Plaintiff Macronix International Co., Ltd. ("Macronix") is a Taiwan corporation with its principal place of business in Hsin-chu, Taiwan. Macronix's subsidiary has an office in Milpitas, California, where it employs engineering, management, and administrative personnel. Macronix designs and develops non-volatile memory semiconductor solutions. Presently, it holds more than 1, 700 United States patents, including the seven patents at issue in this case.

         Macronix alleges that the defendants, Spansion, Inc. and Spansion LLC ("Spansion"), "have committed acts of willful patent infringement" and "sold infringing products to downstream customers" in the Eastern District of Virginia, among other locations in the United States. Spansion, Inc. is the parent company of Spansion LLC. Both are Delaware corporations with their headquarters in Sunnyvale, California. Neither Defendant has any employees or facilities in Virginia. Macronix has identified six downstream customers to whom the Defendants have sold the allegedly infringing products.

         DISCUSSION

         "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought . . . ."28 U.S.C. § 1404(a). Section 1404(a) imbues the district court with discretion to "adjudicate motions for transfer according to an 'individualized, case-by-case consideration of convenience and fairness.'" Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). The moving party bears the burden of proving that the facts warrant a transfer of venue. Samsung Elec. Co. v. Rambus, Inc., 386 F.Supp.2d 708, 715 (E. D. Va. 2005); see Cognitronics Imaging Sys., Inc. v. Recognition Research Inc., 83 F.Supp.2d 689, 696 (E.D. Va. 2000).

         When determining whether to grant a motion to transfer venue, district courts follow a two-step inquiry. First, section 1404(a) directs the court to determine whether the civil action could have been brought in the proposed forum. Jaffe v. LSI Corp., 874 F.Supp.2d 499, 502 (E.D. Va. 2012). Second, the court considers: (1) the plaintiff's choice of forum; (2) the convenience of the witnesses; (3) access to evidence; (4) the convenience of the parties; and (5) the interest of justice. Rambus, 386 F.Supp.2d at 716 (referring to the aforementioned factors as the "principal factors") (citing Koh v. Microtek Int'l, Inc., 250 F.Supp.2d 627, 633 (E.D. Va. 2003)).

         It is undisputed that this action could have been brought in the Northern District of California, the proposed transferee forum. Thus, the resolution of the motion depends on whether, considering the foregoing five factors Spansion has met its burden to prove that transfer is appropriate under § 1404(a).

         1. Plaintiff s Choice of Forum

         To begin, it is necessary to determine the level of deference to be given to Macronix's choice of forum. Generally, the "initial choice of forum, from among those possible under the law, is a privilege given to the plaintiff." Koh, 250 F.Supp.2d at 633 (citing Medicenters of America, Inc. v. T & V Realty & Equipment Corp., 371 F.Supp. 1180, 1184 (E.D. Va. 1974)). Typically, courts accord the plaintiff's choice of forum substantial weight. "'[H]owever, if a plaintiff chooses a foreign forum and the cause of action bears little or no relation to that forum, the plaintiff's chosen venue is not entitled to such substantial weight.'" Rambus, 386 F.Supp.2d at 716 (quoting Telepharmacy Solutions, Inc. v. Pickpoint Corp., 238 F.Supp.2d 741, 743 (E.D. Va. 2003)).

         The Eastern District of Virginia is not Macronix's home forum. Indeed, Macronix does not have a home forum in the United States. Macronix is incorporated in Hsin-Chu, Taiwan, and it maintains its headquarters there. Its subsidiary, Macronix America, Inc., does have an office in the United States, which is located in Milpitas, California, a suburb of San Jose.

         In a patent infringement case, the nucleus of operative facts forms at or near the "center of the allegedly infringing activities, " primarily where the accused products were designed, developed, and manufactured. Koh, 250 F.Supp.2d at 636; see Lycos, Inc. v. TiVo, Inc., 499 F.Supp.2d 685, 693 (E.D. Va. 2007). The record shows that Spansion's production activities took place in Austin, Texas, and that most of the relevant research and development for the product occurred in Sunnyvale, California. Neither of the locations identified by the parties implicate the Eastern District of Virginia. Thus, the "nucleus of operative facts" has little to no connection with the Eastern District of Virginia. Rambus, 386 F.Supp.2d at 716.

         Macronix takes the view that Spansion's sales activity in Virginia alone creates an adequate "factual nexus" to this district. But, in its complaint, Macronix identified only five Virginia customers to which Spansion sold allegedly infringing products. (Amended Compl., at ¶ 7). Further, the record shows that, since 2008, sales to those five Virginia customers represent .026% of Spansion's domestic sales. It does appear that sales to those customers have since increased ...


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