Delaware IP Law Blog

In a recent report and recommendation, Magistrate Judge Christopher J. Burke recommended that defendants’ motion for leave to amend their pleading with inequitable conduct claims and defenses be denied. INVISTA North America S.à.r.l. et al. v. M&G USA Corporation et al., C.A. No. 11-1007-SLR-CJB (D. Del. May 3, 2013). Plaintiffs are asserting U.S. Patent Nos. 7,943,216 (the “’216 Patent”); 7,879,930 (the “’930 Patent”); and 7,919,159 (the “’159 Patent”). Id. at 1. On August 6, 2012, the date which marked the deadline to amend the pleadings pursuant to the Scheduling Order, defendants moved for leave to amend their pleading with inequitable conduct claims and defenses with respect to each of plaintiffs’ asserted patents. Id. at 5. Defendants alleged that those responsible for the prosecution of the asserted patents submitted misleading and incomplete test data to the PTO. Id. at 11, 26. Judge Burke’s analysis was governed by Federal Rule of Civil Procedure 15(a). See id. at 5-6. Because plaintiffs opposed defendants’ motion “on the sole basis that [their] proposed amendments would be futile,” Judge Burke was required to assess only futility of amendment. Id. at 6. As Judge Burke explained, “the standard for assessing futility of amendment is the same standard of legal sufficiency that applies under Fed. R. Civ. P. 12(b)(6).” Id. at 7.

With respect to the ’159 and ’216 Patents, Judge Burke found that defendants failed “to sufficiently plead both the ‘who’ of inequitable conduct as well as the scienter requirement.” Id. at 25. Judge Burke explained that “[n]one of [defendants’] allegations tie specific conduct to any specific individual; instead, as to ‘who’ engaged in misconduct before the PTO, every allegation is pled generally, with reference to ‘Invista,’ ‘Applicant,’ ‘they,’ and ‘their.’” Id. at 17. Judge Burke further found that as to knowledge, the “problem with [defendants’] allegations circle[d] back to the Court’s finding with regard to [defendants’] insufficient pleading as to the ‘who’ of inequitable conduct.” Id. at 21. Specifically, Judge Burke explained that “[w]ith no real facts pled that are specific to any individual, there is a clearly insufficient basis to reasonably infer that any particular person . . . did in fact know of the materiality of this data, and intentionally failed to disclose the data or disclosed incomplete data.” Id. at 22. Moreover, with respect to an intent to deceive, Judge Burke noted that defendants failed to satisfy its burden “under Exergen by asserting that ‘Applicant’ or ‘INVISTA’ as a whole had a ‘desire to acquire patent rights in the gas barrier market,’ and then suggest[ing] that this general statement should lead to the inference that" a particular individual "knowingly withheld or misrepresented material data because of a specific intent to deceive the PTO.” Id. at 25.

Judge Burke further found that defendants’ proposed inequitable conduct defense with respect to the ’930 Patent “suffer[ed] from the same fatal flaws” as those related to the ’159 and ’216 Patents. Id. at 28. Specifically, defendants “failed to sufficiently identify the ‘who’ of [the] inequitable conduct,” which in turn “doom[ed] [defendants’] allegations regarding the scienter requirements of inequitable conduct in relation to the ’930.” Id. Judge Burke additionally found that defendants failed to sufficiently plead “but-for” materiality with respect to the ’930 Patent. Id. at 29. As Judge Burke explained, “[m]ere claims that the PTO would not have granted the patent had it known of the omission or misrepresentation are insufficient because they are conclusory legal conclusions under Iqbal.” Id.

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Magistrate Judge Burke recently issued a thorough report and recommendation on claim construction in a patent infringement dispute between plaintiff Impulse Technology and defendants, Microsoft and the makers of several games for Microsoft’s Xbox 360 system and Kinect sensor. See Impulse Tech. Ltd. v. Microsoft Corp., C.A. No. 11-586-RGA-CJB, Report and Recommendation at 1-4 (D. Del. May 13, 2013). In addition to the parties’ agreed-upon constructions, Judge Burke construed the following disputed terms related to tracking the position of a player in physical and virtual spaces:

- “a tracking system”
- “defined physical space” and “first/second physical space”
- “virtual space”
- “player virtual location[s] in a virtual space corresponding to the physical location[s] of the player[s]”
- “positioning the representation of the user on the monitor” and “moving the representation of the user to reflect movement of the user”
- “representation”
- “overall physical location”
- “moving in the physical space”
- “[the view is from a] point of view in the virtual space corresponding to a location on a line directed outward from the display into the physical space”

Id. at 61-62.

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Magistrate Judge Christopher Burke has issued a memorandum order in a patent infringement case referred to him for pretrial purposes by Chief Judge Gregory Sleet. Judge Burke considered and granted a motion by the plaintiff, filed on the deadline for amendment of pleadings, for leave to file a first amended complaint, adding a subsidiary of the existing defendant as an additional defendant. See Invensas Corp. v. Renesas Elecs. Corp., C.A. No. 11-448-GMS-CJB, Memorandum Order at 1 (D. Del. Apr. 24, 2013).

The parent-defendant, Renesas, argued that plaintiff had delayed in adding the subsidiary, REA. Judge Burke, however, agreed with plaintiffs that there had been no undue delay because “until very close to the deadline for amendment, there had not been a reason or motivation for it to seek to add REA . . . [because plaintiff] felt that it would be uncontested that any sales-related activity conducted by REA as to Renesas’ products in the United States would be activity attributable to Renesas.” Id. at 4-5. After Renesas appeared to assert “the legal theory that REA is a separate entity from Renesas, and that any sales-related activity of REA may not be attributed to its parent,” plaintiff claimed that it filed its motion “in an ‘abundance of caution’ and ‘to ensure that the proper Renesas entities are named in the action.’” In this situation, Judge Burke found that there was no undue delay in filing the motion. Id. at 5-6. Judge Burke also pointed out that “[t]he fact that the Motion was filed within [the] deadline [set by the Scheduling Order for the filing of proposed amendments to pleadings], one agreed to by both parties, strongly supports a conclusion that the amendment was not untimely filed (and, relatedly, that its filing will not work to unfairly prejudice Renesas).” Id. at 6-7.

Judge Burke further found that the risk of prejudice to defendants was minimal, as discovery was ongoing, no trial date had been set, the proposed amendment added no new theories of liability and added only a wholly owned subsidiary of an existing party which would be represented by the same outside counsel as its corporate parent. Under these circumstances, Judge Burke found, “it is reasonable to expect that REA can be integrated into the case without creating significant additional harm to the parties’ pre-trial preparations.” Id. at 7-8.

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Judge Andrews recently issued a decision after plaintiff filed objections to Magistrate Judge Burke's Report and Recommendation construing the claims of U.S. Patent No. 6,973,229. Lamda Optical Solutions, LLC v. Alcatel-Lucent USA Inc., C.A. No. RGA-CJB (D. Del. Apr. 11, 2013). Upon de novo review of Magistrate Judge Burke's constructions, Judge Andrews overruled plaintiff's objections and adopted the Report and Recommendation in its entirety.

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Magistrate Judge Burke recently issued a Report, recommending that defendant’s motion to dismiss plaintiff’s complaint as to direct infringement be denied but that the motion to dismiss plaintiff’s complaint as to indirect infringement be granted. Pragmatus AV, LLC v. TangoMe, Inc., C.A. No. 11-1092-LPS-CJB (D. Del. Feb. 13, 2013). Judge Burke previously made the same recommendation, and applied substantially similar analysis, in Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. Nov. 13, 2012) (Yahoo), discussed here. This was a related case in which the patents-in-suit included the three at issue in this decision, and the plaintiff made similar allegations in that case as well.

As in Yahoo, plaintiff did not plead joint infringement and the primary question as to direct infringement was whether plaintiff’s allegations could only implicate a theory of joint infringement, and thus should be dismissed. See id. at 8. Here Judge Burke similarly concluded that “Defendant’s arguments as to dismissal [were] premature” because “the challenged claims do not so clearly and explicitly require the work of joint infringers so as to warrant dismissal.” Id. at 19, 14.

As to induced infringement, “Plaintiff assert[ed] that [defendant] ha[d] notice and knowledge of its infringement via a notice letter sent by [Plaintiff].” Id. at 22 (internal citations and quotation marks omitted). Unlike in Yahoo, “this allegation [did] indicate when that notice was provided,” but it still “[did] not allege any facts regarding the substance of that notice.” Id. at 23. Therefore, “[t]he Court [was] left to speculate as to what it was about that notice that could have plausibly provided [defendant] with the requisite knowledge of its users’ infringement.” Id. The allegations regarding the notice also provided the Court with "no basis to infer that Defendant, after receiving the notice, could have specifically intended for its users to continue infringing the patents. The law requires more.” Id. at 24. Finally, as in Yahoo, Judge Burke found that “the mere allegation that [defendant’s products] may be used to infringe is not sufficient to allow a reasonable inference that, inter alia, these services and products have no substantial noninfringing uses." Id. at 26-27. Judge Burke therefore recommended that plaintiff’s complaint as to both induced and contributory infringement be dismissed. Id. at 27.

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In September 2010, plaintiff Bristol-Myers Squibb Company (“BMS”) commenced this ANDA litigation against defendant Teva Pharmaceuticals in response to Teva’s filing of Abbreviated New Drug Application No. 202122, which sought “approval to market a generic version of Baraclude.” BMS markets Baraclude to treat adults with certain types of “chronic hepatitis B virus infections.” The Orange Book lists U.S. Patent No. 5,206,244 (the “'244 Patent”) “in connection with BMS’s Baraclude Product,” and BMS sought to enforce claim 8 of that patent, which “covers the chemical compound entecavir.” However, in a recent post-trial opinion, Magistrate Judge Christopher J. Burke held that claim 8 of the '244 Patent is invalid as obvious under 35 U.S.C. § 103. Bristol-Myers Squibb Company v. Teva Pharmaceuticals USA, Inc., C.A. No. 10-805-CJB, at 1-4 (D. Del. Feb. 11, 2013).

In reaching his obviousness determination, Judge Burke first relied on a two-prong test specific to chemical compounds and found that Teva met its burden in proving a prima facie case of obviousness. See id. at 88, 131. Addressing the test’s first prong, Judge Burke concluded that Teva proved by clear and convincing evidence that a “chemist” of ordinary skill in the art would have selected 2'-CDG—a compound similar to entecavir—as a “lead compound” at the alleged time of invention. Id. at 112. Judge Burke explained that a “lead compound” is a prior art compound that “would be most promising to modify in order to improve upon [that compound’s activity] and obtain a compound with better activity.” Id. at 91 (quoting Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd., 492 F.3d 1350, 1357 (Fed. Cir. 2007)) (internal quotation marks omitted). Judge Burke’s conclusion that a chemist of ordinary skill in the art would have chosen 2'-CDG as a lead compound was supported by the following findings: (1) By the late 1980s, carbocyclic analogs, a class of compounds to which 2'-CDG belongs, had “generated excitement” among researchers, including researchers from BMS; (2) 2'-CDG and entecavir were structurally similar; (3) 2'-CDG had demonstrated “positive attributes,” including high potency and good activity in certain applications; (4) Researchers during the relevant time period “were actually treating and using 2'-CDG as a lead compound.” See id. at 94-112.

Turning to the second prong of the prima facie obviousness test, Judge Burke concluded that Teva demonstrated by clear and convincing evidence that the “ordinary medicinal chemist, having selected 2'-CDG as a lead compound, would have had reason to and been motivated” to alter 2'-CDG to create entecavir, and that chemist would have “reasonably expect[ed] to be successful in synthesizing [that] new compound.” Id. at 126, 131. Addressing the “reason” or “motivation” to create entecavir, Judge Burke explained that the chemist of ordinary skill in the art would have been motivated to make “small, conservative changes” to the “2 prime or 5 prime positions” of 2'-CDG, and one of the most conservative changes would have been the “addition of a carbon.” Id. at 119. Such changes were reflected in entecavir’s structure, which was essentially 2'-CDG with a “carbon” added to the “5 prime position.” See id. at 98. With respect to the “reasonable expectation of success,” Judge Burke found the structural similarity between 2'-CDG and entecavir significant, as it is “well-settled that structurally similar compounds ‘often have similar properties.’” Id. at 127 (quoting Takeda, 492 F.3d at 1356). Judge Burke also cited expert testimony that explained that all the “tools” necessary to synthesize entecavir were “in the literature.” Id. at 130.

After concluding that Teva established a prima facie case of obviousness, Judge Burke considered “objective indicia of nonobviousness.” Id. at 131. The evidence with respect to objective considerations, as Judge Burke explained, “was mixed.” Id. at 152-53. However, as Judge Burke’s decision reflects, secondary objective indicia of nonobviousness do not necessarily control the obviousness conclusion. See id. Judge Burke ultimately concluded that “in light of the significant force of Teva’s prima facie case” in addition to the fact that the “PTO was not able to consider certain material prior art references regarding 2'-CDG during prosecution of the patent,” Teva had “demonstrated by clear and convincing evidence that claim 8 of the '244 Patent is invalid as obvious under Section 103.” Id. at 153.

Teva also claimed inequitable conduct, arguing that a named inventor on the '244 Patent and two prosecuting attorneys intentionally failed to disclose 2'-CDG to the PTO despite their awareness of the similarity between entecavir and 2'-CDG. Id. at 155. Judge Burke held, however, that Teva failed to demonstrate this claim by clear and convincing evidence. Id. at 171. Judge Burke explained that it was “reasonable, if not more reasonable, to infer that these men had made a determination that the most important feature of entecavir was the addition of an exocyclic methylene group . . . and that because they were focused on that feature, they went on to cite prior art to the PTO that referred to compounds containing that type of substitution.” Id. at 170. Judge Burke further explained that with regard to at least the two prosecuting attorneys, it was “just as reasonable, if not more reasonable, to infer that another reason why they did not cite these references was because the references had not been brought to their attention by the inventors, and these men would have had little reason to have identified the prior art as relevant on their own.” Id.

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Magistrate Judge Christopher J. Burke recently denied defendant’s motion to “bifurcate the issue of liability for patent infringement from issues relating to damages and to whether any infringement was willful, such that damages and willfulness would be tried, if necessary, separate from and after the liability trial in the case.” SenoRx, Inc. v. Hologic Inc., C.A. No. 12-173-LPS-CJB, at 2 (D. Del. Jan. 30, 2013). Addressing the parties’ disagreement with regard to how common bifurcations are in patent cases, Judge Burke noted that “[t]he Court will approach an analysis of whether bifurcation is appropriate on a case-by-case basis, without resort to a general presumption.” Id. at 3.

Turning to whether bifurcation would prevent or cause “prejudice” to either party, Judge Burke found that defendant did not demonstrate that any prejudice it might face in producing sensitive documents to plaintiff, an alleged “hard-fought competitor[],” would outweigh “the harm [plaintiff] would face in seeing its case split in two.” Id. at 5-6.

Addressing the efficiency of bifurcation, Judge Burke found that defendant failed to demonstrate that “judicial resources would be best conserved by two separate trials.” Id. at 8. Defendant argued that “substantial overlap” would not exist between the evidence presented at the two trials. Id. at 6. Judge Burke, however, explained that “some real overlap” would be “inevitable,” as it would likely be “necessary to set out certain core testimony about the relevant products and industry in both the liability and damages trials.” Id. at 6-7. Furthermore, “at least some evidence regarding the commercial success of the products-at-issue, relevant to a determination of obviousness under 35 U.S.C. § 103, [would] overlap with evidence necessary to assess damages.” Id. at 7. Judge Burke further noted that “the evidentiary overlap regarding liability and willfulness issues” would be “[e]ven more significant.” Id. Defendant additionally argued that the outcome of the earlier, separate infringement suit could render the second suit unnecessary or facilitate a settlement. Id. Judge Burke, however, found that “these outcomes, while possible, are entirely speculative at this stage.” Id.

Next, Judge Burke considered “whether bifurcation would enhance juror comprehension” of the issues to be presented at trial, which would involve technologies addressing “medical device engineering, brachytherapy and radiation therapy.” Id. at 8. Judge Burke agreed with defendant that the suit’s “subject matter is complex” and would “pose a challenge for a jury.” Id. at 9. Judge Burke explained, however, that “patent cases often implicate difficult subject matter that may be unfamiliar to most jurors,” and “[t]he subject matter relating to the patents-in-suit [did] not strike the Court as significantly more complex than that confronted by juries in this District in many patent cases.” Id. Judge Burke further found that “other factors that might exacerbate the level of complexity involved in a patent case are not present.” Id. at 9-10. Specifically, the suit involved only two patents, only 20 claims were being asserted, the discovery produced to date had not been significant, and only one plaintiff and defendant were involved. Id. at 10.

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Magistrate Judge Burke recently considered defendant’s motion to stay plaintiff’s patent infringement litigation pending the USPTO’s reexamination of the patents-in-suit. SenoRX, Inc. v. Hologic, Inc., C.A. No. 12-173-LPS-CJB (D. Del. Jan. 11, 2013). The patents-in-suit relate to “balloon brachytherapy device[s],” which are used in the treatment of breast cancer. Id. at 1-2. Defendant filed requests for reexamination following the entry of the Court’s scheduling order and while discovery progressed in the case. See id. at 2-3. Defendant then filed a motion to stay pending resolution of the reexamination proceedings. Id. at 3. In weighing the relevant factors to determine whether a stay was appropriate, the Court concluded that “the prejudice factor decidedly weigh[ed] against a stay.” Id. at 19.

“With nearly all of the asserted claims currently subject to a non-final rejection and before the PTO,” the potential for simplification of issues favored a stay, “though not strongly so” because of the “lack of complete (though not insignificant) overlap of the issues to be addressed in the PTO and in the District Court.” Id. at 7, 8. The current status of the litigation also favored a stay but that was “tempered” by the fact that “the case was not in its infancy” when defendant filed its motion. Id. at 11-12.

As to prejudice, while the timing of defendant’s motion weighed in favor of a stay, “there [was] the real prospect of at least a multi-year, lengthy delay” until the reexamination proceedings were complete. Id. at 15. The relationship between the parties also weighed against a stay. Because the parties “are the only two companies who participate in the balloon brachytherapy market” and “this ‘hard-fought’ competition has also spawned additional litigation” in another court, “it is very clear that the level of competition between the parties is acute.” Id. at 16-17. The Court’s conclusion was not affected by the fact that plaintiff did not seek a preliminary injunction “with the fact of direct competition not in any serious dispute.” Id. at 17.

Overall, while “the issue [was] a close one, with good arguments to be made for either outcome sought by the parties,” the potential for prejudice to plaintiff “[struck] the Court as more compelling, immediate and certain when compared to the potential for efficiency gains or simplification of the issues that might result from reexamination.” Id. at 20.

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Magistrate Judge Burke recently issued a Report, recommending that defendant Yahoo!’s motion to dismiss plaintiff’s claims of direct infringement of five patents be denied but Yahoo!’s motion to dismiss plaintiff’s claims of induced and contributory infringement of those same five patents be granted. Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. Nov. 13, 2012).

Addressing the sufficiency of plaintiff’s claims of direct infringement, Judge Burke first distinguished the different levels of factual detail necessary for a plaintiff to overcome a motion to dismiss for undivided and joint infringement. Judge Burke explained that for an undivided infringement claim, the plaintiff must plead the level of detail required by Form 18 of the Appendix of Forms to the Federal Rules of Civil Procedure. Id. at 5-7. However, if plaintiff’s claim relies on a theory of joint infringement, the plaintiff must fulfill the requirements of Rule 18 and must further plead “facts sufficient to allow a reasonable inference that one party exercises the requisite ‘direction or control,’ such that performance of every step [of the claim] is attributable to the controlling party.” Id. at 7 (quoting Eon Corp. IP Holdings LLC v. FLO TV Inc., 802 F. Supp. 2d 527, 534-35 (D. Del. 2011)).

Defendant first argued that all of plaintiff’s asserted claims, which involved methods, could not possibly be performed by defendant alone, and required a second, joint infringer. Thus, according to defendant, plaintiff must have been relying on a theory of joint infringement. Defendant argued that because plaintiff did not plead factual allegations with regard to its exercise of control over a joint infringer, the direct infringement claims should be dismissed. Id. at 9.

In response, Plaintiff argued that it was not relying on a theory of joint infringement. Id. Thus, the parties’ disagreement essentially boiled down to “whether the claims at issue [could] plausibly be read to allow for one person or entity [to perform] all of the steps of [the] claimed method.” Id. at 10. Judge Burke noted that this type of disagreement “tend[s] to devolve into a dispute about what certain claim terms can and cannot mean.” Id. Judge Burke found, however, that conducting claim construction on a motion to dismiss would be going beyond the court’s “traditional gatekeeping role in reviewing such a motion.” Id. at 13. Judge Burke therefore found that “[t]o the extent that a defendant asserts that a direct infringement claim should be dismissed because the claim terms-at-issue require joint infringement—and the resolution of that question depends in any meaningful way on the construction of those claim terms—the motion should typically be denied as premature.” Id. Judge Burke did find, however, that there may be “certain (perhaps rare) cases where the facts of record at the pleading stage will so clearly and explicitly indicate that an ‘undivided’ claim of direct infringement cannot stand” that granting a motion to dismiss will be appropriate. Id. at 14. Because none of the claims at issue “clearly and explicitly” required a second, joint infringer, and because all of those claims met the requirements of Form 18, Judge Burke recommended that defendant’s motion to dismiss with regard to the claims of direct infringement be denied.

Turning to the sufficiency of plaintiff’s claims of indirect infringement, Judge Burke noted that “in order for an inducement claim to survive a motion to dismiss, the complaint must contain facts ‘plausibly showing that [the alleged indirect infringer] specifically intended [the direct infringers] to infringe [the patent-at-issue] and knew that the [direct infringer’s] acts constituted infringement.’” Id. at 24-25 (quoting In re Bill of Lading Transmission and Processing Sys. Patent Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012)). Despite plaintiff’s allegations that it provided “written notice of infringement” to Yahoo!, Judge Burke recommended a finding that plaintiff’s inducement claims were insufficient because they provided “no indication of when that notice was provided” and set forth no factual detail “regarding the substance of that notice.” Id. at 27.

Moving on to the contributory infringement claim, Judge Burke noted that to overcome a motion to dismiss, a plaintiff must “provide facts that allow a reasonable inference that all elements of a contributory infringement cause of action are plausible.” Id. at 29 (citing Bill of Lading, 681 F.3d at 1337). Such elements include the infringer’s knowledge that “the combination for which its components were especially made was both patented and infringing and that [the] components have no substantial non-infringing uses.” Id. (quoting Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1320 (Fed. Cir. 2009)). Judge Burke found that plaintiff failed to “reference these legal elements” and provided “no detail that would flesh out the factual underpinnings supporting such elements.” Id. at 30. Although plaintiff alleged that Yahoo! Messenger “may be used to infringe,” Judge Burke found such an allegation insufficient to support a reasonable inference that Yahoo! Messenger has “no substantial nonfringing uses.” Id. at 30-31. Judge Burke therefore recommended that the claims for contributory infringement be dismissed. Id. at 31.

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Magistrate Judge Christopher Burke has issued a report in patent litigation between patent-holding company Pragmatus and internet giant Yahoo!, recommending that Yahoo’s motion to transfer venue to the Northern District of California be denied. See Pragmatus AV, LLC v. Yahoo! Inc., C.A. No. 11-902-LPS-CJB (D. Del. Oct. 15, 2012). Judge Burke wrote a lengthy opinion analyzing the various public and private interest factors of Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) in great depth and explaining how those factors are typically applied in the District of Delaware. Ultimately, Judge Burke found that two factors weighed against transfer, four favored transfer, and six were neutral: “[T]he plaintiff’s choice of forum and practical considerations weigh against transfer. The defendant’s forum preference and whether the claim arose elsewhere weigh in favor of transfer. Two other factors—the convenience of the witnesses and the location of books and records—also weigh in favor of transfer, though only slightly, and not sufficiently to make a material impact on the Court’s decision.”

In reaching this conclusion, Judge Burke clarified several disputes among the parties as to the proper application of transfer precedent in the District of Delaware. He first stated that the Federal Circuit in In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) “noted that a party’s state of incorporation is not one of the factors listed in Section 1404 or in Jumara, and stated that it would be inappropriate for a court to place ‘heavy reliance’ on this fact, such that it became ‘dispositive’ in the venue transfer analysis.” Nevertheless, he noted, “nothing in Link _A_ Media suggests that a defendant’s place of incorporation is irrelevant to the transfer analysis.” Rather, “in many circumstances, the Federal Circuit has found that the location of a defendant’s incorporation in a forum can be a fact supporting the conclusion that a lawsuit is properly venued in that same forum.” Next Judge Burke considered Yahoo!’s suggestion that when considering the availability of witnesses factor, “it is sufficient for purposes of venue transfer analysis if the witness is not subject to a court’s subpoena power.” He explained that the precedent relied on for this proposition in turn relied on precedent “where the Court intently considered whether there was evidence that the non-party witnesses at issue would actually be unavailable for trial.” He therefore concluded that “to automatically consider a witness unavailable, simply because they reside outside of this District’s subpoena power, would render the inquiry required by this factor unduly wooden.” Rather, a court must consider whether there is evidence that witnesses would actually be unavailable for trial. Finally, in considering the court congestion factor, Judge Burke noted that “for the first time in years, this Court now has a full bench of four U.S. District Judges (and, for the first time ever, three U.S. Magistrate Judges). In light of that . . . [he was] not persuaded by [the] argument that difficulties relating to court congestion favor transfer.”

Based on these and other factors, Judge Burke concluded that while “the issue is a close one . . . Yahoo! has not demonstrated that the balance of convenience of the parties tips strongly in its favor, as is required by Third Circuit precedent.” He refuted Yahoo!’s suggestion that “‘there isn’t a strong showing’ required of defendants in order to obtain a transfer of venue,” stating instead that Third Circuit and District precedent requires “that a defendant bear the ‘heavy burden’ to show that the balance of convenience tips ‘strongly in favor’ of transfer.” Yahoo! did not meet that burden in this case in part because Pragmatus “brought suit . . . in a district that is very near to its place of business and to the location of its employees, a district where it had a legitimate basis to file the litigation (in light of the fact, among other things, that Yahoo! is itself incorporated here), and where the same Court is overseeing myriad other litigation matters involving the patents-in-suit.” Accordingly, Judge Burke recommended denial of the motion to transfer.

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