Data Scape Limited v. Box, Inc.

Western District of Texas, txwd-6:2019-cv-00025

REPLY to Response to Motion, filed by Box, Inc., re [27] Opposed MOTION to Change Venue to the Northern District of California filed by Defendant Box, Inc.

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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS WACO DIVISION DATA SCAPE LIMITED, Plaintiff, Civil Action No. 6:19-CV-00025-ADA v. BOX, INC., Defendant. DEFENDANT BOX, INC.'S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE TO THE NORTHERN DISTRICT OF CALIFORNIA I. INTRODUCTION Data Scape fails to meaningfully rebut Box's overwhelming showing in support of transfer to Northern California, which is the location of Box's headquarters, accused product development, seven relevant party witnesses, nine relevant third-party witnesses, and relevant documents. Unable to show any reason to keep this case in this District, Data Scape misstates the facts and the law. It materially misrepresents the alleged relevance of several Box employees in Austin, as explained in their declarations submitted herewith. It also makes no effort to distinguish Judge Yeakel's well-reasoned opinion in Uniloc USA Inc. v. Box, Inc., No. 1:17-cv-754-LY, 2018 WL 2729202 (W.D. Tex. June 6, 2018). This Court should grant Box's motion for the same reasons. II. THE COURT SHOULD TRANSFER THIS CASE TO NORTHERN CALIFORNIA. A. Plaintiff's Choice of Forum Merits No Deference. Data Scape proclaims that its choice of forum is "entitled to substantial deference." (Opp. at 1.) But "the Fifth Circuit forbids treating the plaintiff's choice of venue as a factor in the analysis." In re Nintendo Co., Ltd., 589 F.3d 1194, 1200 (Fed. Cir. 2009) (citing In re TS Tech USA Corp., 551 F.3d 1315, 1320 (Fed. Cir. 2008)). The relevant factors strongly support transfer. B. The Private Factors Weigh Strongly in Favor of Transfer. 1. The Convenience of the Witnesses Strongly Favors Transfer. Data Scape cannot credibly dispute that the "most important" factor, the convenience of witnesses, overwhelmingly favors transfer. In re Genentech, Inc., 566 F.3d 1338, 1343 (Fed. Cir. 2009). Box's declarant, Ms. Urton, identifies sixteen relevant witnesses in Northern California. (Urton Decl. ¶¶ 7-10, 15-17.) By contrast, Data Scape fails to demonstrate that even a single individual in or near Texas is likely to be a relevant witness in this case. (Opp. at 5-6.) Unable to dispute the dispositive facts, Data Scape resorts to mischaracterization. First, it asserts that Box is merely "name dropping" people who might not be significant at trial. (Opp. at 4.) But Data Scape admits that the identified witnesses include "multiple Vice Presidents and Directors, as well as Box's Chief Accounting Officer" (id. at 3-4)—senior leaders at Box with 1 critical responsibilities for Box's accused products. Data Scape cannot dispute that these witnesses have relevant knowledge in technical, sales, marketing, and financial subject matters. Further, Data Scape fails to even address four of the relevant Box engineers identified in Box's motion and described in Ms. Urton's declaration—Messrs. Chiu, Bartolini, and Bashir, and Ms. Lumma. (Compare Mot. at 2, 6 citing Urton Decl., ¶¶ 6-11, 15-17 with Opp. at 4, n. 1.) Ms. Urton testifies, unrebutted, that all seven identified Box employees "are likely to be witnesses in this case" based on their relevant knowledge. (Urton Decl. ¶¶ 7-10, 15-17.) Data Scape similarly ignores the demonstrated unique relevance of the nine former Box employees in Northern California. (Opp. at 4.) Ms. Urton explains, unrebutted, how those nine third-party witnesses had key roles in the original development and management of the products that are now accused of infringement. (Urton Decl., ¶¶ 15-17.)1 Neither Data Scape nor Box identifies anyone else with the same cumulative knowledge as these third-party witnesses.2 Data Scape speculates that these third-party individuals might be willing witnesses with no need for compulsory process. (Opp. at 7.) If so, their convenience weighs fully in favor of transfer. In re Genentech, 566 F.3d at 1345; On Semiconductor Corp. v. Hynix Semiconductor, Inc, No. 6:09-cv-390, 2010 WL 3855520, at *6 (E.D. Tex. Sept. 30, 2010) ("Typically, the convenience of third-party witnesses is given greater weight. . ."). And if they are unwilling witnesses, only the Northern California courts have subpoena power over them, as discussed further below. These sixteen named relevant witnesses in Northern California are not "intentionally selected" in any improper way as Data Scape insinuates. (Opp. at 7.) It is only natural that the relevant witnesses are in Northern California, because Box is headquartered and employs over 1 E.g., Satish Asok, "technical lead responsible for managing and overseeing the initial development of Box Sync"; Arnold Goldberg "led and scaled engineering efforts for Box Sync"; four former employees of Streem contributed expertise to Box Drive; Ketki Warudkar led product management for Box Individuals & Teams during its development. (Urton Decl., ¶¶ 15-17.) 2 The Kroy IP and Sentry Select cases are therefore inapposite. (Opp. at 4, citing Kroy IP Holdings, LLC v. Starbucks Corp., Inc., No. 2:13-cv-936-JRG, 2014 WL 5343168, at *3 (E.D. Tex. Sept. 30, 2014); Sentry Select Ins. Co. v. McCoy Corp., 980 F. Supp. 2d 1072, 1078 (W.D. Wis. 2013).) By analogy with Sentry Select, the people who originally created and managed the accused products are the people who "actually saw" the products' design and development, as opposed to people who merely may have gained some familiarity after-the-fact. 980 F. Supp. 2d at 1078. 2 1,000 people there (including all Box senior management), the accused products originated there, Box's most important decisions are all made there, and Box's relevant documents are managed there—all of which Ms. Urton explains in unrebutted testimony. (Urton Decl., ¶¶ 3-11, 13-17.) In an attempt to find Texas witnesses, Data Scape surfs the Web to name seven employees based in Austin, but misstates their alleged relevance. (Opp. at 4-5.) All seven submit declarations herewith explaining how Data Scape's speculations about their alleged "relevant knowledge" are materially inaccurate.3 For example, Data Scape incorrectly states that two employees have relevant knowledge about sales and marketing of the accused products. (Opp. at 5.) In fact, neither of those two has worked on sales or marketing of the accused products; they work in other service and operational support roles.4 For the other five, Data Scape alleges that they have relevant knowledge about the accused products' design and development. (Opp. at 5.) However, all five explain how they have not been responsible for the accused products' design and development.5 The Austin employees thus confirm Ms. Urton's unrebutted testimony that "Box does not perform any product design or development work in its Austin office." (Urton Decl., ¶ 13.) The Austin employees also confirm that "[a]ll functions of the Austin office" are managed out of Box's Northern California headquarter offices. (Id., ¶ 14.) Six of these seven employees report directly to a manager in Northern California, while the seventh works on a team that reports into Northern California.6 Finally, Data Scape points to its own principal in New York7 and vaguely-mentioned individuals around the East Coast, but fails to demonstrate any individual having knowledge that will likely be relevant to the issues in this case. (Opp. at 5, 8.) It also fails to show that any relevant witness would be significantly more inconvenienced by trial in San Francisco rather than Waco. 3 See Declaration of Matt Behn ("Behn"), ¶¶ 4-5; Declaration of Kyle Croft ("Croft"), ¶ 4; Declaration of Tyler Mitchell ("Mitchell"), ¶¶ 4-5; Declaration of Phillip Moore ("Moore"), ¶¶ 4- 5; Declaration of Jason Pan ("Pan"), ¶¶ 4-5; Declaration of Glen Shillinglaw ("Shillinglaw"), ¶ 4; Declaration of Adam Whaley ("Whaley"), ¶¶ 4-5. 4 Croft ¶ 4; Shillinglaw ¶ 4. 5 Behn, ¶¶ 4-5; Mitchell, ¶¶ 4-5; Moore, ¶¶ 4-5; Pan, ¶¶ 4-5; Whaley, ¶¶ 4-5. 6 Behn, ¶ 2; Croft ¶ 2; Mitchell, ¶ 2; Moore, ¶ 2; Pan, ¶ 2; Shillinglaw, ¶ 2; Whaley, ¶ 2. 7 Data Scape is merely a patent assertion entity. The declaration of its principal, Mr. Gerald Padian, fails to allege that he has any knowledge relevant to this lawsuit. (Dkt. No. 28-1.) 3 In sum, the record demonstrates sixteen named, likely witnesses with relevant knowledge in Northern California, and none in or near Texas. This factor overwhelmingly supports transfer. 2. The Availability of Compulsory Process Strongly Favors Transfer. Data Scape cannot dispute the fact that nine named third-party witnesses in Northern California have relevant knowledge. (Mot. at 3, 6-7.) By contrast, Data Scape fails to identify even a single non-party individual in Texas with any knowledge relevant to this case. (Opp. at 7.) Data Scape incorrectly contends that Box must demonstrate that the third-party witnesses in Northern California are unwilling to testify. (Opp. at 7.) On the contrary, the Fifth Circuit's required factor is "the availability of compulsory process to secure the attendance of witnesses." In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (emphasis added). As Judge Yeakel observed, "the focus is on the availability of process to secure attendance of a witness if need be." Uniloc, 2018 WL 2729202, at *3 (italics in original). To the extent other district courts may have misstated the Fifth Circuit's binding precedent, their decisions do not bind this Court. Data Scape mischaracterizes the Casey case as requiring a showing of "unwilling" third- party witnesses. (Opp. at 6-7, quoting Casey v. Reliance Tr. Co., No. 4:18-cv-00424, 2018 WL 7138386, at *3 (E.D. Tex. Dec. 12, 2018).) The Casey court did not require any showing that the third-party witnesses were "unwilling." In fact, the court specifically noted that the "identified non-party witnesses may be characterized as 'willing' or 'friendly witnesses" and still found that the "Availability of Compulsory Process" factor favored transfer due to the witnesses simply "residing within the compulsory subpoena power" of the transferee district. Id. at *3-5, n.3. 3. The Sources of Proof, Including Documents, Favor Transfer. As discussed previously, the sources of likely testimonial evidence—sixteen identified witnesses in Northern California and none in Texas—overwhelmingly favors transfer. Data Scape does not dispute that Box's relevant documents are located in, and accessible from, Northern California. (Mot. at 5-6.) Data Scape disputes only the relevance of this fact. (Opp. at 6.) But under Fifth Circuit precedent, "courts analyze the distance documents must be transported from their physical location to the trial venue, acting under the assumption that 4 electronically stored documents are, in fact, physical." TracBeam LLC v. Apple, Inc., No. 6:14- cv-680, 2015 WL 5786449, at *2 (E.D. Tex. Sept. 29, 2015) (citing In re Volkswagen, 545 F.3d at 316). The location of the documentary evidence therefore substantially favors transfer. In re Nintendo, 589 F.3d at 1199-1200 ("Because most evidence resides in Washington or Japan with none in Texas, the district court erred in not weighing this factor heavily in favor of transfer.").8 4. Practical Issues Are Neutral. Data Scape never explains why its California-based counsel filed seven cases in California but none in the Northern District of California where Box and other defendants are headquartered. There is no legitimate practical reason not to transfer this action to Northern California. C. The Public Interest Factors Further Weigh in Favor of Transfer Data Scape states that this Court is "well-equipped to handle patent litigation cases." (Opp. at 10.) Box agrees, but so are the courts in the Northern District of California. On court congestion, "[t]he Federal Circuit has noted that this factor is mostly speculative, and thus has a relatively limited impact on [the] ultimate decision whether to transfer." Uniloc USA, Inc. v. Cisco Sys., Inc., No. 6:15-cv-1175-JRG, 2017 WL 959856, at *4 (E.D. Tex. Mar. 13, 2017) (citing In re Genentech, 566 F.3d at 1347). Data Scape quibbles over statistics, but can only speculate as to what schedule might ultimately govern this case. (Opp. at 9.) Uniloc/Cisco, 2017 WL 959856, at *4 ("In light of the competing statistics, the Court finds this factor neutral."). Finally, Data Scape cannot meaningfully dispute the much greater local interest in Northern California, home of Box's headquarters, relevant product development, and sixteen witnesses, as opposed to this District where there is nothing substantially relevant to this case. (Mot. at 9-10.) III. CONCLUSION Box respectfully requests that the Court transfer this case pursuant to 28 U.S.C. § 1404(a). 8 The magistrate in Patel—a criminal case on transfer under Fed. R. Crim. P. 21(b), not civil transfer per § 1404(a)—cited only District of Columbia, not Fifth Circuit, precedent in discussing documents. U.S. v. Patel, No. 4:18-cr-127, 2018 WL 6274034, at *3 (E.D. Tex. Nov. 14, 2018). 5 Respectfully submitted, Dated: May 17, 2019 /s/ Heidi L. Keefe Heidi L. Keefe (CA SBN 178960) Reuben H. Chen (CA SBN 228725) Lowell D. Mead (CA SBN 223989) Lam K. Nguyen (CA SBN 265285) Alexandra Leeper (CA SBN 307310) COOLEY LLP 3175 Hanover Street Palo Alto, CA 94304-1130 (650) 843-5000 Deron R. Dacus The Dacus Firm, P.C. 821 ESE Loop 323, Suite 430 Tyler, TX 75701 (903) 705-1117 Attorneys for Defendant Box, Inc. CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing document has been served on all counsel of record via the Court's ECF system on May 17, 2019. /s/ Heidi L. Keefe Heidi L. Keefe 6