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Chief Judge Sleet Grants Motion to Transfer Case against Zynga to Northern District of California Based in Part on Subpoena Power over Third Party Witnesses

Plaintiff Segan is a New York limited liability company with a principal place of business in New York. Segan sued Zynga for infringement of its patent related to online games, accusing popular Zynga games such as Cafe World, CityVille, Empires & Allies, FarmVille, FishVille, FrontierVille, Mafia Wars, PetVille, Treasure Isle, YoVille and Zynga Poker. Zynga is a Delaware corporation with a principal place of business in San Francisco. Zynga moved to transfer the case to the Northern District of California. Segan LLC v. Zynga Inc., C.A. No. 11-670-GMS, Memo at 1-2 (D. Del. Mar. 19, 2014).

Third party witnesses ended up playing a large role in the transfer analysis. Segan identified three potential third-party witnesses: the co-inventor and the two prosecuting attorneys. Judge Sleet explained that these individuals did not affect the Court’s transfer analysis because “they are not Segan’s employees, and they are not third-party witnesses that reside within the subpoena power of either the District of Delaware or the Northern District of California.” Id. at 5 n.1. By contrast, Zynga identified several relevant third party witnesses who were not within the District of Delaware’s subpoena power but could be compelled by subpoena to testify in the Northern District of California. Because Zynga’s identified third party witnesses were “important to resolving infringement,” could be compelled to testify in California, and could more conveniently testify in California because they were headquartered there, Judge Sleet found that this factor strongly favored a transfer to the Northern District of California. Id. at 6-7.

Weighing the other factors set forth by the Third Circuit in Jumara v. State Fram Ins. Co., 55 F.3d 873 (3d Cir. 1995), Chief Judge Sleet determined that the interests weighed in favor of transfer. Although both parties chose “traditional and legitimate” venues, Judge Sleet acknowledged that “plaintiffs have historically been accorded the privilege of choosing their preferred venue,” so this factor weighed slightly against transfer. Id. at 3-4. Similarly, the convenience to each party of its chosen venue was given some weight, but was ultimately neutral. Id. at 5-6. Judge Sleet also found that the accused products had a closer connection to California through Zynga’s San Francisco headquarters and that the relevant books and records were located in California. Each of these factors weighed somewhat in favor of transfer. Id. at 4-7. Finally, practical considerations also favored transfer because “none of the parties have a presence in Delaware; the majority of the evidence, witnesses, and nonparty companies are located in the Northern District of California; and transfer would reduce the expense and disruption to Zynga’s and the nonparty companies’ business operations.” Id. at 7-8.

In sum, Judge Sleet determined that the motion to transfer should be granted: “Considering the Jumara factors as a whole, the court believes that Zynga has met its burden of demonstrating that the interests of justice and convenience strongly favor transfer. Notably, only Segan’s forum preference weighs against transfer, and that preference was not afforded maximum deference in this case. On the other hand, several factors counsel transfer: the location where the claim arose; the location of relevant books and records; and practical considerations that might make trial easier and less expensive. Additionally, the convenience of witness factor strongly favors transfer because the Northern District of California can exercise subpoena power over most of the nonparty witnesses, but Delaware cannot. Therefore, the court grants Zynga’s motion to transfer.” Id. at 9.

Segan LLC v. Zynga Inc., C.A. No. 11-670-GMS (D. Del. Mar. 19, 2014).

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