Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_10-cv-02051/USCOURTS-cand-5_10-cv-02051-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

---

IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF VIRGINIA 

Alexandria Division 

L 

MAY 1 1 2010 

CLERK. U.S. DISTRICT COURT 

ALF.X/ViOP'A. V'iiG CONVERGENCE TECHNOLOGIES ) 

(USA), LLC ) 

Plaintiff, ) 

) 

v. ) No. l:09cvl256 

) 

MICROLOOPS CORP., et at., ) 

Defendants. ) 

MEMORANDUM OPINION 

A threshold motion in this multi-defendant patent infringement suit seeks severance or 

dismissal of the claim against one of the defendants and transfer of the claims against the 

remaining defendants to the Northern District of California pursuant to 28 U.S.C. § 1404(a). For 

the reasons that follow, the motion to dismiss the claim against one of the defendants must be 

granted for lack of service of process, and the claims against the remaining defendants are 

appropriately transferred to the Northern District of California for the convenience of the parties 

and witnesses, and in the interest of justice. 

I.1 

Plaintiff Convergence Technologies (USA) ("Convergence") is a limited liability 

company with its principal place of business in Reston, Virginia. It is owned and controlled by 

Convergence Technologies Limited, a Hong Kong-based corporation. Convergence is the sole 

owner, by assignment, of United States Patent No. 7,422,053 ("the '053 patent"), which claims 

1 The facts stated herein are derived from the complaint and the parties' declarations, 

which are appropriately considered where, as here, the parties contest personal jurisdiction. See 

Elecs.for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003) (stating that court's 

disposition as to personal jurisdiction prior to discovery may be based on affidavits and other 

written materials). 

Case 5:10-cv-02051-EJD Document 32 Filed 05/11/10 Page 1 of 31
(i) an apparatus heat transfer device, described as a vapor augmented heatsink with a multi-wick 

structure, and (ii) a method by which the heat transfer device is manufactured. 

Convergence has sued four defendants for infringement—a manufacturer of the putatively 

infringing product and three alleged distributors and resellers of that product. Defendant 

Microloops Corporation ("Microloops"), the manufacturer of the putatively infringing product, is 

a Taiwanese corporation with its principal place of business in Taoyuan Hsien, Taiwan in the 

Republic of China. In addition to its Taiwan headquarters, Microloops maintains a U.S. sales 

office in Lancaster, Pennsylvania. Defendant Sapphire Technology Limited ("Sapphire") is a 

Chinese corporation with its principal place of business in Hong Kong. Defendant HewlettPackard Company ("HP") is a Delaware corporation with its principal place of business in Palo 

Alto, California. Defendant Dynatron Corporation ("Dynatron") is a California corporation with 

its principal place of business in Fremont, California. Notably, Palo Alto and Fremont are cities 

located within the Northern District of California. All defendants are represented by the same 

counsel.2 

On November 9, 2009, Convergence filed a complaint alleging infringement of the '053 

patent against Microloops, Sapphire, and HP. Prior to the filing of a responsive pleading, 

Convergence on December 15,2009, filed an amended complaint, adding Dyantron as defendant. 

In the amended complaint, Convergence alleges that Microloops manufactures and sells "vapor 

chambers" that infringe the apparatus claims of the '053 patent using a method also claimed by 

the '053 patent. The amended complaint further alleges that Sapphire, HP, and Dynatron 

2 According to defendants' counsel, defendants' joint representation by the same counsel 

is the result of indemnity agreements between Microloops and the other three defendants, and 

hence raises no conflict of interest issues. 

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infringe the '053 patent by incorporating the vapor chambers manufactured by Microloops into 

their own products, which are sold in the United States, "including substantial sales in Virginia." 

Compl. tH 4-7. Specifically, Sapphire allegedly uses Microloops's vapor chambers in its 

computer graphics card products, while HP and Dynatron allegedly use Microloops's vapor 

chambers in their computer server component products. 

The case docket reflects that a summons was issued by the Clerk of the Court on 

November 9,2009, for service of the complaint on Microloops, Sapphire, and HP. Following the 

filing of the amended complaint and the addition of Dynatron as a defendant, additional 

summonses issued for service of the amended complaint on all four defendants. With respect to 

service, Convergence represents that it requested a waiver of service on all defendants pursuant 

to Rule 4(d), Fed. R. Civ. P. Yet, the record clearly reflects, based on an uncontroverted affidavit 

by defendants' counsel, that no defendant waived service of process. Consistent with this, the 

docket contains neither (i) a return of summons or proof of service of the complaint or amended 

complaint on any defendant, nor (ii) an executed wavier of service by any defendant. 

Nonetheless, it appears that Convergence formally served HP and Dynatron—the two California 

defendants—in March 2010, shortly before the 120-day service period expired. See Rule 4(m), 

Fed. R. Civ. P. Convergence has not, however, effected service on Microloops or Sapphire. 

HP and Dynatron each filed an answer to the complaint on April 1, 2010. Both answers 

assert that personal jurisdiction over all defendants is lacking, and that the Eastern District of 

Virginia is not a proper venue in which to bring suit. Moreover, HP and Dynatron 

counterclaimed under the Declaratory Judgment Act, seeking a declaration that the '053 patent is 

invalid. Neither Microloops nor Sapphire has filed an answer. 

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On April 1, 2010, defendants jointly filed a motion for severance of the patent 

infringement claim against Sapphire from the patent infringement claims against the other 

defendants, or alternatively for dismissal of Sapphire for insufficient service of process, and for 

transfer of the severed or remaining defendants—namely Microloops, HP, and Dynatron—to the 

Northern District of California. The parties filed numerous affidavits in support of their 

respective positions on defendants' motion, and the issues were fully briefed and argued at a May 

7, 2010 hearing, at which time the matter was resolved by a Bench ruling. 

II. 

Analysis properly begins with the motion to dismiss the claim against Sapphire for failure 

to effect service of process, for resolution of that motion may render the severance motion moot 

and significantly affect the analysis of the transfer motion.3 

3 Worth noting is the fact that the motion is styled as a motion for severance and transfer, 

and not as a motion for dismissal for insufficient service of process pursuant to Rule 12(b)(5), 

Fed. R. Civ. P. Nonetheless, it is clear from the face of the briefs that Sapphire seeks dismissal 

as an alternative to severance. For instance, in its opening brief, defendants assert that "[t]o date, 

Microloops and Sapphire have not been served" and argue that "[alternatively, the Court could 

dismiss Sapphire without prejudice given Plaintiffs failure to timely [sic] effect service." Defs.' 

Br. at 3,4. Likewise in their reply brief, defendants again note that "[i]f Sapphire is not 

dismissed for lack of service [of process], [then] in the interest of justice the severed claim 

[against Sapphire]... [should] be stayed pending disposition of the severed claims." Defs.' 

Reply Br. at 3-4, 8 n.13. Importantly, it is clear that Convergence had notice that defendants 

sought dismissal for lack of service of process because Convergence, in its brief, responded 

directly to defendants' contention that Microloops and Sapphire had not been served. See PL's 

Br. at 2 ("Plaintiff served all defendants by Notice and Request for Waiver, under FRCP 4(d)."); 

id at 7 n.3 (arguing that defendants have "waived any objection to service"). Simply put, the 

parties have fully addressed the issue in the briefs. Therefore, in the circumstances, and 

notwithstanding defense counsel's failure to caption its motion correctly, it is appropriate to 

deem the motion at bar as a motion for severance and, in the alternative, a motion for dismissal 

for insufficient, or lack of, service of process. As Wright and Miller explain in their treatise, 

[m]any district judges tend to focus on whether any party has been prejudiced by 

the movant's lack of particularity and whether the court can comprehend the basis 

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Under Rule 4(m), Fed. R. Civ. P., "[ijf a defendant is not served within 120 days after the 

complaint is filed, the court—on motion or on its own after notice to the plaintiff—must dismiss 

the action without prejudice against that defendant." Ordinarily, service of process is effected by 

serving a defendant with a summons and a copy of the complaint, see Rule 4(c)(l), Fed. R. Civ. 

P., and proved by the filing of an affidavit of the process server, see Rule 4(/), Fed. R. Civ. P. 

Alternatively, however, a plaintiff may avoid the expense of serving a summons and complaint 

under Rule 4(d), Fed. Civ. P., by "notifying] such a defendant that an action has been 

commenced and request that the defendant waive service of a summons." Importantly, a 

defendant who receives a request to waive service of process may decline and require that the 

plaintiff serve a summons and copy of the complaint. See Rule 4(d)(2), Fed. R. Civ. P. 

(providing financial disincentive on defendants who elect not to waive). Where, as here, a 

defendant elects not to waive service of process, the "[a]ttempted service through mailing of the 

notice and request is ineffectual... [and] at that point, the plaintiff must seek to accomplish 

personal service on the defendant." Johnson v. Warner, 7:05CV00219,2009 U.S. Dist. LEXIS 

17143, at *3-*4 (W.D. Va. Mar. 6, 2009) (citing Armco, Inc. v. Penrod-Stauffer Bldg. Sys. Inc., 

733 F.2d 1087, 1089 (4th Cir. 1984)). 

In this case, Convergence requested waiver of service pursuant to Rule 4(d), Fed. R. Civ. 

of the motion and deal with it fairly; as a result, courts generally avoid engaging in 

an overly technical evaluation of the papers on which the motion is predicated and 

grant or deny the requested relief on the basis of the underlying merits of the 

petition. 

5 Wright & Miller, Federal Practice and Procedure § 1192. Notwithstanding this result, it is 

worth emphasizing that counsel would do well to avoid this issue by clearly and correctly 

denominating its motions pursuant to the Federal Rules of Civil Procedure. 

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P. Yet, no defendant agreed to a waiver of service, see Defs.' Reply Br. Ex. 1 ^[3, and thus 

Convergence was required to serve defendants with process prior to the expiration of the 120-day 

service period, in this case by at least April 14,2010.4 Additionally, in the course of the May 7, 

2010 hearing, Convergence's counsel acknowledged that no efforts were currently underway to 

effect service of process on either Microloops or Dynatron. 

In response, Convergence argues that Sapphire has waived any objection to insufficient 

service of process. This argument plainly fails. Sapphire raised the issue in the motion at bar as 

an alternative to severance, which constitutes Sapphire's "first significant defensive move," and 

in this regard it is clear that a litigant only waives this defense where, unlike here, it is not raised 

"at the time the first significant defensive move is made—whether it be by way of a Rule 12 

motion or a responsive pleading." 5C Wright & Miller, Federal Practice and Procedure § 1391. 

Thus, as Convergence presents no proof of service on Sapphire within the 120-day period 

prescribed in Rule 4(m), Fed. R. Civ. P., and presents no good cause for extending the service 

period,5 Convergence's complaint against Sapphire must be dismissed without prejudice.6 

4 This date is calculated from the filing of the December 2009 amended complaint. 

Notably, however, the 120-day period likely expired in early March with respect to the 

defendants named in the original November 2009 complaint, namely Microloops, Sapphire, and 

HP. Although the Fourth Circuit has not directly addressed whether the 120-day period provided 

in Rule 4(m), Fed. R. Civ. P., starts anew on the filing of an amended complaint, other courts 

have reasonably concluded that the filing of an amended complaint does not restart the 120-day 

period except as to those defendants newly added in the amended complaint. See, e.g., Bolden v. 

City ofTopeka, 441 F.3d 1129, 1148 (10th Cir. 2006); accord 1 James Wm. Moore et al., 

Moore's Federal Practice § 4.80 (3d ed. 1997); 4B Wright & Miller, Federal Practice and 

Procedure § 1137. It is unnecessary to reach or decide this issue here, as Convergence failed to 

serve Sapphire within 120 days of filing either the complaint or the amended complaint. 

5 In its opposition brief, Convergence argues that service was made "by Notice and 

Request for Waiver, under FRCP 4(d)." As noted supra, however, mailing of a request for 

waiver does not satisfy the service requirements set forth in Rule 4, Fed. R. Civ. P., and courts 

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Case 5:10-cv-02051-EJD Document 32 Filed 05/11/10 Page 6 of 31
III. 

Microloops, HP, and Dynatron also seek transfer of this case to the Northern District of 

California pursuant to 28 U.S.C. § 1404(a). In support of their transfer motion, these defendants 

principally contend that the Due Process Clause bars the exercise personal jurisdiction over 

Microloops and Dynatron in Virginia, and therefore transfer of the entire matter is warranted in 

the interest of justice. Although no defendant formally seeks dismissal for lack of personal 

jurisdiction under Rule 12(b)(2), Fed. R. Civ. P.,7 resolution of this issue significantly affects the 

transfer calculus under 28 U.S.C. § 1404(a). See Va. Beach v. Roanoke River Basin Ass 'n, 776 

F.2d 484,488-89 (4th Cir. 1984) (finding transfer to be warranted where personal jurisdiction 

was lacking). Accordingly, it necessary to address the personal jurisdiction issues prior to 

considering the transfer request. 

A. 

The parties sharply contest whether there is personal jurisdiction over Microloops and 

have sensibly held that ignorance of procedural rules does not constitute good cause for 

extending the 120-day period for service. See, e.g., Townsel v. County of Contra Costa, 820 F.2d 

319, 320 (9th Cir. 1987); Kersh v. Derozier, 851 F.2d 1509, 1512 (5th Cir. 1988). See generally 

Inst.for Policy Studies v. United Stales CIA, 246 F.R.D. 380, 384-85 (D.D.C. 2007) (listing 

cases). 

6 Notably, under the plain language of Rule 4(m), Fed. R. Civ. P., Convergence cannot 

argue that it was afforded inadequate notice of dismissal for insufficient service of process, as 

notice is only required where dismissal is based on the Court's sua sponte action. See 4B Wright 

& Miller, Federal Practice and Procedure § 1137 ("As the cases in the notes below indicate, the 

dismissal may occur either as a result of a motion to dismiss by the defendant or be ordered on 

the initiative of the court with notice to the plaintiff."). Here, dismissal is based on defendants' 

motion. See supra note 3. 

7 Defendants represent that while they believe dismissal would be proper under Rule 

12(b)(2), Fed. R. Civ. P., they seek transfer of the case in order to bypass Convergence's refiling 

this patent infringement suit in the Northern District of California. 

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Dynatron in Virginia.8 The parties' personal jurisdiction dispute focuses chiefly on whether 

jurisdiction is established based on a stream of commerce theory. See Asahi Metal Indus. Co. v. 

Superior Court, 480 U.S. 102 (1987). 

Yet, before addressing the merits of the personal jurisdiction question, it is necessary to 

address Convergence's claim that Microloops and Dynatron have waived any objection to 

personal jurisdiction. Specifically, Convergence asserts that defendants' motion for severance 

and transfer waives any objection to personal jurisdiction because it is not a motion to dismiss for 

lack of personal jurisdiction. This argument misapprehends the law. To begin with, it is wellestablished that objections to personal jurisdiction "must be raised 'at the time the first 

significant defensive move is made—whether it be by way of a Rule 12 motion or in a responsive 

pleading.'" Rates Tech., Inc. v. Nortel Networks Corp., 399 F.3d 1302, 1308 (Fed. Cir. 2005) 

(quoting 5C Wright & Miller, Federal Practice and Procedure § 1391). Additionally, it is wellunderstood that a motion to transfer pursuant to 28 U.S.C. § 1404 is distinct from a motion to 

dismiss pursuant to Rule 12(b), Fed. R. Civ. P. See 5B Wright & Miller, Federal Practice and 

Procedure § 1352 ("[MJotions to transfer are made pursuant to a motion under the statute rather 

than under Rule 12(b)(3)...."). From this, courts have correctly reasoned that a § 1404 motion 

to transfer does not waive objections to personal jurisdiction on the ground that a Rule 12(h) 

waiver only applies where a Rule 12(b) defense is omitted from a responsive pleading or prior 

Rule 12(b) motion. See, e.g., Dwyer v. Bicoy, No. 08-cv-01195, 2008 U.S. Dist. LEXIS 105130, 

at *10-*12 (E.D. Va. Dec. 22, 2008). Moreover, 28 U.S.C. § 1406(a), which permits a district 

8 Although HP in its answer asserted a defense of lack of personal jurisdiction, defendants 

concede in their briefs that there is personal jurisdiction over HP in Virginia. No party addressed 

the issue of personal jurisdiction over Sapphire in Virginia. 

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court to dismiss or transfer a case "laying venue in the wrong division or district," clearly 

forecloses Convergence's waiver argument. If Convergence were correct that a motion to 

transfer waives an objection to personal jurisdiction, there would be no circumstance in which § 

1406 would operate because the filing of the motion to transfer would automatically rectify any 

defect in personal jurisdiction.9 This anomalous result is avoided by recognizing that the filing of 

a motion to transfer does not operate as a waiver of a personal jurisdiction objection. Consistent 

with this, the Supreme Court has expressly recognized that "[t]he language of § 1406 (a) is amply 

broad enough to authorize the transfer of cases, however wrong the plaintiff may have been in 

filing his case as to venue, whether the court in which it was filed had personal jurisdiction over 

the defendants or not." Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466 (1962). 

These principles, applied here, compel the conclusion that neither Microloops nor 

Dynatron has waived its personal jurisdiction defense by filing the motion at bar. Dynatron 

clearly asserted and preserved its defense of lack of personal jurisdiction in its answer and 

reasserted this defense as a basis for severance and transfer.10 Nor can it be said that Microloops 

has waived personal jurisdiction. Microloops was never served with the complaint or the 

amended complaint, and accordingly was not required to file a responsive pleading preserving its 

9 Although § 1406 refers to improper venue, not personal jurisdiction, the two concepts 

are closely intertwined. See 14D Wright et al., Federal Practice and Procedure § 3827, at 569 

("Since venue often is tied up with personal jurisdiction, a plaintiff who is mistaken about venue 

also is mistaken about personal jurisdiction."). 

10 In the course of the May 7, 2010 hearing, counsel raised the issue that Dynatron's filing 

a counterclaim under the Declaratory Judgment Act may bear on the waiver analysis. Yet, the 

Federal Circuit has directly addressed this issue, holding that "filing a counterclaim, compulsory 

or permissive, cannot waive a party's objections to personal jurisdiction, so long as the 

requirements of Rule 12(h)(l) are satisfied." Rates Tech., 399 F.3d at 1307-08. 

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personal jurisdiction defense. Furthermore, the motion at bar for severance and transfer does not 

implicate the Rule 12(h) waiver rule because the motion is not a Rule 12(b) motion. Thus, 

Convergence's argument that Microloops's and Dynatron's objections to personal jurisdiction 

have been waived must be rejected, and the merits of the personal jurisdiction issues as to those 

defendants must be addressed. 

Whether a court has personal jurisdiction over a given defendant in a patent infringement 

suit is governed by Federal Circuit law, not the law of the regional circuit in which the case is 

litigated. See Avocent Hunstville Corp. v. Aten Int 7 Co., Ltd., 552 F.2d 1324,1328 (Fed. Cir. 

2009) ("[W]e apply Federal Circuit law because the jurisdictional issue is 'intimately involved 

with the substance of the patent laws.'" (quoting Akro Corp. v. Luiker 45 F.3d 1541, 1543 (Fed. 

Cir. 1995))). Where, as here, the parties have not yet conducted discovery, a plaintiff is required 

to make only aprima facie showing that defendants are subject to personal jurisdiction. See id. 

at 1328-29. In determining whether a plaintiff has established aprimafacie case, a court "must 

accept the uncontroverted allegations in the plaintiffs complaint as true and resolve any factual 

conflicts in the affidavits in the plaintiffs favor." Elecs.for Imaging, Inc. v. Coyle, 340 F.3d 

1344,1349 (Fed. Cir. 2003) (emphasis added). 

Under well-settled Federal Circuit precedent, the personal jurisdiction inquiry proceeds in 

two steps. As the Federal Circuit has explained, "[i]n order to establish personal jurisdiction in a 

patent infringement case over a non-resident defendant whose products are sold in the forum 

state, a plaintiff must show both that the state long arm statute applies and that the requirements 

of due process are satisfied." Commissariat a I'Energie Atomique v. Chi Mei Optoelectronics 

Corp., 395 F.3d 1315, 1319 (Fed. Cir. 2005). Where a forum state's highest court has interpreted 

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its long-arm statute to extend the reach of its courts to the limits of due process, "the 

jurisdictional analysis collapses into a single determination of whether the exercise of personal 

jurisdiction comports with due process." Avocent, 552 F.3d at 1329 (bypassing long-arm statute 

step and conducting only due process inquiry). Significantly, the Federal Circuit recently 

recognized that the Supreme Court of Virginia interprets the Virginia long-arm statute as 

"generally authorizing] the exercise of jurisdiction to the full extent permitted by the U.S. 

Constitution," and therefore held that "the statutory and constitutional inquiries coalesce into the 

question whether due process is satisfied." Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 

1411 (Fed. Cir. 2009)." Here, no party contends that the Virginia long-arm statute does not 

reach the conduct alleged in the amended complaint; rather, the parties' arguments focus only on 

the constitutional due process issue. Accordingly, only the due process issue is addressed here. 

The modern constitutional test for personal jurisdiction—commonly referred to as the 

"minimum contacts" test—was set forth by the Supreme Court in International Shoe Co. v. 

11 Importantly, the Supreme Court of Virginia's statement—cited by the Federal Circuit in 

Touchcom—that the reach of the Virginia long-arm statute is concurrent with the scope of the 

Due Process Clause was made with respect to Virginia Code § 8.01-328.1(A)(1), which permits a 

Virginia court to exercise personal jurisdiction over a cause of action arising from a defendant's 

transaction of business in Virginia. 

The purpose of our "long arm statute" is to assert jurisdiction, to the extent 

permissible under the Due Process Clause of the Constitution of the United States, 

over nonresidents who engage in some purposeful activity in Virginia. And a 

single act by a nonresident which amounts to "transacting business" in Virginia 

and gives rise to a cause of action may be sufficient to confer jurisdiction upon 

our courts. 

See Danville Plywood Corp. v. Plain & Fancy Kitchens, Inc., 238 S.E.2d 800, 802 (Va. 1977) 

(internal citation omitted). 

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Washington, 326 U.S. 310 (1945).12 Specifically, the Supreme Court identified two requirements 

for the exercise of personal jurisdiction: that a defendant (1) have certain minimum contacts with 

a forum state such that (2) the maintenance of the suit does not offend "traditional notions of fair 

play and substantial justice." Id. at 316. Within the International Shoe framework, the Supreme 

Court has recognized that personal jurisdiction may be of two types, general or specific. General 

jurisdiction "requires that the defendant have 'continuous and systematic' contacts with the 

forum state and confers personal jurisdiction even when the cause of action has no relationship 

with those contacts." Silent Drive, Inc. v. Strong Indus., Inc., 326 F.3d 1194, 1200 (Fed. Cir. 

2003) (quoting Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408,416 (1984)). 

By contrast, specific jurisdiction may exist in the absence of "continuous and systematic" 

contacts with a forum state, provided that the assertion of personal jurisdiction is "based on 

activities that 'arisef] out of or 'relate[] to the cause of action.'" Id. (quoting Burger King Corp. 

v. Rudzewicz, 471 U.S. 462,472-73 (1985)) (alterations in original). In this case, Convergence 

does not argue that there is general jurisdiction in Virginia over Microloops or Dynatron, and 

accordingly the analysis here focuses solely on the specific jurisdiction issue. 

Based on these general principles, the Supreme Court has determined that nonresident 

defendants may be subject to suit in a forum because they engage in activities outside the forum 

that result in the flow of goods in commerce to the forum. This "stream of commerce" theory of 

personal jurisdiction is central to the parties' dispute here, and thus warrants some elaboration. 

Notably, the Federal Circuit has made clear that the stream of commerce theory applies in patent 

12 For a detailed history of the Supreme Court's jurisprudence relating personal 

jurisdiction and the evolution of the minimum contacts test, see generally Lesnick v. 

Hollingsworth & Vose Co., 35 F.3d 939,941-45 (4th Cir. 1994). 

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infringement suits. See Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558,1565-68 

(Fed. Cir. 1994). 

The Supreme Court first recognized the stream of commerce theory in World-Wide 

Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980). In that case, the plaintiffs, en route to their 

new residence in Arizona, were involved in an automobile accident in Oklahoma, where they 

ultimately brought a products liability suit against both the New York distributor and New York 

dealership from which they had purchased the automobile. The plaintiffs argued that the 

Oklahoma court properly exercised jurisdiction over the New York corporations on the sole 

ground that, given the mobile nature of automobiles, it was foreseeable that a car purchased in 

New York may be driven to Oklahoma. This, the plaintiffs asserted, was a sufficient contact to 

satisfy due process under International Shoe. The Supreme Court rejected this argument, 

holding that "'foreseeability' alone has never been a sufficient benchmark for personal 

jurisdiction under the Due Process Clause," particularly in light of recent decisions clarifying that 

the critical element of the due process analysis is whether "the defendant's conduct and 

connection with the forum State are such that he should reasonably anticipate being haled into 

court there." Id. at 296-97. Accordingly, the Supreme Court explained that 

if the sale of a product of a manufacturer or distributor... is not simply an 

isolated occurrence, but arises from the efforts of the manufacturer or distributor 

to serve directly or indirectly, the market for its product in other States, it is not 

unreasonable to subject it to suit in one of those States if its allegedly defective 

merchandise has there been the source of injury to its owner or to others. The 

forum State does not exceed its powers under the Due Process Clause if it asserts 

personal jurisdiction over a corporation that delivers its products into the stream 

of commerce with the expectation that they will be purchased by consumers in the 

forum State. 

Id. at 297-98 (emphasis added). 

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The Supreme Court next addressed the requirements of the stream of commerce theory of 

personal jurisdiction in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987). This 

decision concerned a California court's exercise of personal jurisdiction over Asahi, a foreign 

defendant with no direct California contacts, based on the fact that Asahi had established 

distribution networks through which its products were incorporated into other goods sold in 

California. The Supreme Court unanimously concluded that the California court's exercise of 

personal jurisdiction was improper because it offended the second International Shoe 

requirement, namely "traditional notions of fair play and substantial justice."13 Yet, the Supreme 

Court split on whether International Shoe's minimum contacts requirement was satisfied. 

Specifically, Justice O'Connor, writing for a plurality of four Justices, held that exercising 

jurisdiction solely because Asahi placed an object into the stream of commerce did not satisfy 

due process. Id. at 112 (plurality opinion). In her view, the exercise of personal jurisdiction was 

consistent with due process only where "[additional conduct of the defendant may indicate an 

intent or purpose to serve the market in the forum State." Id.l4 Disagreeing with Justice 

13 See Asahi, 480 U.S. at 113-16 (O'Connor, J.) ("Considering the international context, 

the heavy burden on the alien defendant, and the slight interests of the plaintiff and the forum 

State, the exercise of personal jurisdiction by a California court over Asahi in this instance would 

be unreasonable and unfair."); id. at 116 (Brennan, J., concurring in part and concurring in the 

judgment) ("I do agree, however, with the Court's conclusion ... that the exercise of personal 

jurisdiction over Asahi in this case would not comport with 'fair play and substantial justice,' 

International Shoe Co. v. Washington, 36 U.S. 310, 320 (1945)."); id at 121-22 (Stevens, J., 

concurring in part and concurring in the judgment) ("California's exercise of jurisdiction over 

Asahi in this case would be 'unreasonable and unfair.' Ante, at 116. This finding alone requires 

reversal...."). 

14 Justice O'Connor identified the following examples of "additional conduct": 

"designing the product for the market in the forum State, advertising in the forum State, 

establishing channels for providing regular advice to customers in the forum State, or marketing 

the product through a distributor who has agreed to serve as the sales agent in the forum State." 

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O'Connor, and also writing for a plurality of four, Justice Brennan argued that the exercise of 

personal jurisdiction was proper absent "additional conduct" because 

[t]he stream of commerce refers not to unpredictable currents or eddies, but to the 

regular and anticipated flow of products from manufacture to distribution to retail 

sale. As long as a participant in this process is aware that the final product is 

being marketed in the forum State, the possibility of a lawsuit there cannot come 

as a surprise. 

Id. at 117 (Brennan, J., concurring in part and concurring in the judgment). Notably, Justice 

Stevens joined neither the O'Connor nor the Brennan opinion, and thus neither of those Justices' 

view of the stream of commerce theory commanded a majority of the Supreme Court. 

Understandably, the World-Wide Volkswagen and Asahi decisions have created 

significant confusion in lower courts, including the Federal Circuit. Indeed, the Federal Circuit 

has consistently declined to endorse either the O'Connor or the Brennan approach to the stream 

of commerce theory. See, e.g., Avocent, 552 F.3d at 1330-31 (noting "significant confusion" 

ower Asahi); Commissariat, 395 F.3d at 1322 & n.7 ("We have yet to decide whether Justice 

Brennan's standard is sufficient to satisfy due process, because we have yet to be presented with 

facts that do not meet the more rigorous standard adopted by Justice O'Connor."); Beverly Hills 

Fan, 21 F.3d at 1566 ("We need not join this debate here "). Nonetheless, the Federal 

Circuit has made clear that the exercise of personal jurisdiction over a defendant based on the 

stream of commerce theory requires, at a minimum, knowledge of the product's likely 

destination through an established distribution channel. As explained in Commissariat, "this 

case thus presents a factual scenario which would require us to determine whether or not 

additional conduct, beyond a showing of use of established distribution channels, is required to 

Asahi, 480 U.S. at 112 (plurality opinion). 

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meet the demands of due process under the stream of commerce theory."15 Commissariat, 395 

F.3d at 1322 (emphasis added); accord Viam Corp. v. Iowa Export-Import Trading Co., 84 F.3d 

424,429 (Fed. Cir. 1996) (finding assertion of personal jurisdiction to be proper because "facts 

clearly establish a regular chain of distribution"). 

These principles, applied here, compel the conclusion that Convergence has failed to 

make aprimafacie showing that there is personal jurisdiction over Microloops or Dynatron in 

Virginia. Whether Justice O'Connor's or Justice Brennan's interpretation of the stream of 

commerce theory governs need not be resolved here, as Convergence fails to meet even the lesser 

threshold showing for personal jurisdiction required by Justice Brennan. 

With respect to Microloops, Convergence submits no declaration or other evidence to 

support aprimafacie showing of personal jurisdiction. Although Convergence alleges in the 

amended complaint that Microloops makes "substantial sales in Virginia," this statement is 

controverted by the declaration of David Chao, Microloops's Chairman and CEO, and thus the 

allegation may not be accepted as true. See Elecs.for Imaging, 340 F.3d at 1349 ("[A] district 

court must accept the uncontroverted allegations in the plaintiffs complaint as true 

(emphasis added)). Significantly, Convergence submits no affidavit to rebut Chao's statements 

that 

[w]hile most sales of our vapor chambers, including sales to Hewlett-Packard and 

Sapphire, are made outside of the United States, Microloops has made a limited 

number of sales to Dynatron in Fremont, California. At no time though has 

Microloops or Microloops Thermal sold, or offered for sale, the accused vapor 

chambers in Virginia. 

15 The Federal Circuit declined to resolve this question because the record was deemed 

inadequate. See Commissariat, 395 F.3d at 1322. 

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Defs.' Br. Ex. 2 ^7. Significantly, in the absence of an affidavit by Convergence controverting 

the facts as stated by Chao, his statements are the only evidence in the record of Microloops's 

sales in the United States, and hence control the analysis at this stage. See Elecs. for Imaging, 

340 F.3d at 1349 ("[A] district court must... resolve any factual conflicts in the affidavits in the 

plaintiffs favor." (emphasis added)). 

Yet, even assuming Convergence's allegation that Microloops makes "substantial sales in 

Virginia" to be true, Convergence still cannot make aprimafacie showing of personal 

jurisdiction under the stream of commerce theory, as interpreted by the Federal Circuit in 

Commissariat. No pleading or document in the record establishes that Microloops knew its 

vapor chamber would be incorporated into other products sold in Virginia such that Microloops 

might reasonably anticipate being haled into Virginia court. See World-Wide Volkswagen, 444 

U.S. at 297. Nor is there any evidence establishing a regular channel of distribution of vapor 

chambers between Microloops's Taiwan manufacturing facilities and Virginia. See 

Commissariat, 395 F.3d at 1322. Absent these showings, Convergence fails to satisfy the stream 

of commerce theory of personal jurisdiction. 

The same result obtains with respect to whether there is personal jurisdiction over 

Dynatron in Virginia. On this issue, Convergence's evidence in support of aprimafacie case of 

personal jurisdiction consists of the following: (i) an allegation in the amended complaint that 

Dynatron makes "substantial sales in Virginia" of the infringing products; (ii) Webpage printouts 

from various third-party online retailers—namely atacom.com, CensusPC.com, frozencpu.com, 

linkecomputer.com, ncixus.com, and newegg.com—that sell Dynatron products; and (iii) a 

Dynatron brochure containing Dynatron product and pricing information. Again, Convergence 

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submits no affidavit in support of its claim of personal jurisdiction. 

This evidence fails to make aprimafacie showing of personal jurisdiction over Dynatron. 

To begin with, the allegation in the amended complaint regarding Dynatron's sales in Virginia 

cannot be accepted as true because it is clearly controverted by the declaration of Ian Lee,16 a 

Dynatron sales engineer, in which Lee avers, "Dynatron has never sold any products into 

Virginia that includes a Microloops vapor chamber." Defs.' Br. Ex. 3 f7.17 Moreover, the 

Webpage printouts and the Dynatron catalogue do not support a finding of personal jurisdiction 

under the stream of commerce theory because the documents fail to establish any link between 

the infringing products and Virginia. 

Convergence cites Taltwell, LLC v. Zonet USA Corp., No. 3:07cv543, 2007 U.S. Dist. 

LEXIS 93465 (E.D. Va. Dec. 19,2007), for the proposition that a third-party retailer's selling an 

allegedly infringing product online is itself sufficient to satisfy the exercise of personal 

jurisdiction under the Due Process Clause. Yet, Convergence's reliance on Taltwell is unavailing 

for two reasons. First, it is factually distinguishable on the ground that the Websites here, unlike 

16 See Elecs. for Imaging, 340 F.3d at 1349 ("[A] district court must accept the 

uncontroverted allegations in the plaintiffs complaint as true ...." (emphasis added)). 

17 It is worth noting that Lee also avers that "Dynatron has sold some other unrelated 

products into Virginia, the sales [of which] have been minimal," accounting for less than 3% of 

the company's total 2009 United States revenue. On this record, Dynatron's selling these 

products, which are not at issue in this patent infringement suit, do not appear to support the 

exercise of general or specific jurisdiction. See Silent Drive, 326 F.3d at 1200 (requiring 

"continuous and systematic" contacts for general jurisdiction); id. (explaining that specific 

jurisdiction is proper only when the "activities ... *arise[] out of or 'relatefj to the cause of 

action.'" (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462,472-73 (1985)) (alterations in 

original)). 

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the site in Taltwell, are passive,18 and the Federal Circuit has held that ordering an allegedly 

infringing product online from a third-party distributor, without more, does not give rise to 

personal jurisdiction under the stream of commerce theory where, as here, the distributor's 

Website was passive and the purchaser initiated the sale himself. See Maynard v. Phila. Cervical 

Collar Co., Inc., 18 F. App'x 814, 816-17 (Fed. Cir. 2001) (per curiam) ("A passive website is 

insufficient to establish purposeful availment for the purpose of due process Maynard 

ordered this product from a third-party distributor and initiated the sale himself."). Second, 

Taltwell is further factually distinguishable, as that case clearly holds that personal jurisdiction 

was properly exercised over Zonet, an online retailer, because Zonet, unlike Microloops and 

Dynatron, conceded in an affidavit that allegedly infringing goods were actually delivered to the 

forum state. See Taltwell, 2007 U.S. Dist. LEXIS 93465, at * 11-* 12 (emphasizing that Zonet 

"admits that three of Zonet's resellers, distributors, or retailers are located in Virginia"). 

Additionally, the district court in Taltwell also notes that "[u]nder a stream of commerce theory, 

Taltwell would have to present a prima facie case that Zonet delivered its goods to a nonVirginia retailer, such as Amazon.com or Tigerdirect.com, knowing that some of the goods would 

be sold in Virginia" Id. at *15 (emphasis added). Neither of these holdings is satisfied in this 

case. Lee avers in his supplemental affidavit: (i) that less than a dozen G218 coolers—a product 

containing the allegedly infringing vapor chamber—were sold to Canadian-based retailer 

ncixus.com, with Dynatron having no knowledge as to whom ncixus.com ultimately sold the 

18 Compare Taltwell, 2007 U.S. Dist. LEXIS 93465, at *5 ("Taltwell also alleges that 

Zonet sells its products directly through its website, which is interactive and accessible by 

persons in Virginia." (emphasis added)), with Defs.' Reply Br. Ex. 21(9 ("[O]rders for any 

Dynatron product cannot be made through the Dynatron website."). 

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product; and (ii) that "Dynatron has not actually sold any of the G218 coolers to Atacom, 

CensusPC, FrozenCPU, Linke Computer Limited or Newegg." Defs.' Reply Br. Ex. 2 f7. 

Notably, these statements are not controverted by any affidavits submitted by Convergence, and 

hence control the analysis at this stage. See Elecs.for Imaging, 340 F.3d at 1349 ("[A] district 

court must... resolve any factual conflicts in the affidavits in the plaintiffs favor." (emphasis 

added)). 

In sum, then, no evidence submitted by Convergence establishes that Microloops or 

Dynatron directly delivered their products to Virginia, or placed their products in the stream of 

commerce with the knowledge that they would ultimately be sold in Virginia through an 

established distribution channel or otherwise. Significantly, unrefuted declarations submitted by 

Microloops and Dynatron establish that no allegedly infringing products were sold directly or 

indirectly in Virginia. Accordingly, on this record, no prima facie showing of personal 

jurisdiction over Microloops or Dynatron has been made. 

B. 

Given (i) that Sapphire must be dismissed for insufficient service of process, and (ii) that 

Convergence has failed to make a prima facie showing that Microloops and Dynatron are subject 

to personal jurisdiction in Virginia, the remaining question at bar is whether the circumstances 

warrant transfer of Convergence's patent infringement claims against Microloops, HP, and 

Dynatron to the Northern District of California. Because the Federal Circuit has held that the law 

of the regional circuit applies in considering a transfer motion under § 1404(a),19 the decisions of 

19 See Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 836 (Fed. Cir. 2003) ("In 

reviewing a district court's decision regarding a motion to transfer under 28 U.S.C. § 1404(a), 

this court applies the law of the appropriate regional circuit, in this case the Seventh Circuit."); 

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Case 5:10-cv-02051-EJD Document 32 Filed 05/11/10 Page 20 of 31
the Fourth Circuit control whether transfer is warranted in this case. 

Although defendants move for transfer only under § 1404(a), which permits transfer 

"[f]or the convenience of the parties and witnesses," 28 U.S.C. § 1404(a), the motion is properly 

construed as seeking transfer under § 1406(a) with respect to Microloops and Dynatron because 

the case, as originally filed in the Eastern District of Virginia, "lay[] venue in the wrong division 

or district," id. § 1406(a). As Wright and Miller explains: 

Sections 1404(a) and 1406(a) are both short, apparently clear, and seemingly 

mutually exclusive. Section 1404(a) permits transfer of a civil action to any other 

district in which it could have been brought, and refers to a civil action in which 

venue is properly laid in the district where the case was filed. Section 1406(a) 

pertains to transfer of a case laying venue in the "wrong district." 

14D Wright et al., Federal Practice and Procedure § 3827, at 575 (quoting Teng v. Skaarup 

Shipping Corp., 743 F.2d 1140,1147 (5th Cir. 1984)). Therefore, the transfer motion with 

respect to HP, which is properly subject to suit in Virginia, is governed by § 1404(a); the transfer 

motion with respect to Micrloops and Dynatron, which are not properly subject to suit in Virginia 

because there is no personal jurisdiction over these defendants, is governed by § 1406(a). 

Nonetheless, whether a transfer is "in the interest of justice" under either § 1404(a) or § 1406(a) 

requires substantially the same analysis, and thus it is appropriate to address the transfer of all 

defendants together. 

As an initial matter, the transfer statutes require, as a prerequisite, that the transferee court 

be located in a "district or division in which [the case] could have been brought" initially. 28 

Winner Int 7 Royalty Corp. v. Wang, 202 F.3d 1340, 1352 (Fed. Cir. 2000) ("Our review of the 

district court's denial of Wang's motion to transfer, as a procedural matter, is governed by the 

law of the regional circuit in which it sits, here the United States Court of Appeals for the District 

of Columbia Circuit."). 

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Case 5:10-cv-02051-EJD Document 32 Filed 05/11/10 Page 21 of 31
U.S.C. §§ 1404(a), 1406(a). In this case, the Northern District of California is clearly such a 

district because there is personal jurisdiction over the remaining defendants in California. 

Specifically, both HP and Dynatron have their principal places of business in the Northern 

District of California. Furthermore, Microloops concedes that it sold the allegedly infringing 

products to Dynatron in California. Accordingly, all three defendants are subject to personal 

jurisdiction in California,20 making venue proper under 28 U.S.C. § 1391 ("For purposes of 

venue under this chapter, a defendant that is a corporation shall be deemed to reside in any 

judicial district in which it is subject to personal jurisdiction at the time the action is 

commenced."). In the course of the May 7,2010 hearing, this point was conceded by defendants' 

counsel, who further represented that defendants would contest neither jurisdiction nor service of 

process in the Northern District of California. 

In addition to this statutory prerequisite, courts have, on numerous occasions, identified 

and discussed the principal factors to be considered in a transfer analysis, namely "plaintiffs 

choice of venue, witness convenience and access, and the interest of justice." Corry v. CFM 

Majestic Inc., 16 F. Supp. 2d 660, 666 (E.D. Va. 1998). See generally Annotation, Questions as 

to Convenience and Justice of Transfer Under Forum Non Conveniens Provision of Judicial 

Code, (28 USC § I404(a)), 1 A.L.R. Fed. 15 (1969). The various transfer factors, applied here, 

point persuasively to the conclusion that transfer of the case against Microloops, HP, and 

Dynatron to the Northern District of California is warranted. 

20 See Ca. Code Civ. P. § 410.1 ("A court of this state may exercise jurisdiction on any 

basis not inconsistent with the Constitution of this state or of the United States."); International 

Shoe, 326 U.S. at 316-18 (recognizing that presence and sufficient business contacts related to 

the subject of the suit give rise to personal jurisdiction). 

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Case 5:10-cv-02051-EJD Document 32 Filed 05/11/10 Page 22 of 31
To begin with, although a plaintiffs choice of its home forum is ordinarily given 

substantial weight in the transfer analysis,21 this factor is not controlling, and indeed courts have 

granted transfers pursuant to § 1404(a) even where a plaintiff was a resident of the district in 

which it originally filed suit. See id. at 68 (listing decisions in which case was transferred away 

from plaintiffs home forum); see also Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22,33 (1988) 

(recognizing that no single factor is dispositive in transfer analysis). Several circumstances 

present in this case lessen the weight properly attributable to Convergence's choosing to bring 

suit in the Eastern District of Virginia. Most notably, Convergence is owned and controlled by a 

foreign corporation with its principal activities occurring in Hong Kong, and in this respect it 

appears from the current record that Virginia is only nominally Convergence's home forum. In a 

declaration submitted in opposition to defendants' motion, Stephen Lee, Convergence's Chief 

Executive Officer, avers that the company was incorporated in Virginia "to manage over all U.S. 

steady sales orders for Convergence Technologies Limited (a Hong Kong based Corporation). 

PL's Ex. 1TJ2 (emphasis added). This statement characterizes Convergence as a mere sales agent 

of its foreign parent company. In addition, Lee—the principal trial witness identified by 

Convergence—resides in Hong Kong, as does a former employee identified as a likely witness. 

See id. ^4; Defs.' Ex. 2 ^9 (Declaration of David Chao of Microloops averring that "Mr. Lee 

resides in Hong Kong"). Likewise, Lee avers that "[a]ll the documents relevant to the patent and 

the case are in Hong Kong." PL's Ex. 1 1(6. The fact that all of Convergence's material evidence 

21 See Collins v. Straight, Inc., 748 F.2d 916, 921 (4th Cir. 1984) ("With regard to the 

question of change of venue, a district court is required to weigh the factors involved and unless 

the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be 

disturbed."). 

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relating to its patent infringement claim is located in Hong Kong only reinforces the argument 

that the suit relates to Convergence's Hong Kong parent company, and not to Convergence as 

such. Also significant is the fact that Lee's affidavit does not indicate whether Convergence 

actually conducts business activities, or has employees, in Virginia. Indeed, during the May 7, 

2010 hearing, Convergence's counsel was unable to state whether Convergence had any 

employees working at its Virginia office or if any business was in fact conducted from that 

office. See WiAVSolutionsLLC v. Motorola, Inc., 3:09cv447,2009 U.S. Dist. LEXIS 96994, at 

*10-*l 1 (E.D. Va. Oct. 20,2009) (according plaintiffs choice of forum substantial weight in the 

transfer analysis because it was clear from the record that plaintiff "operates all of its business 

activities out of its [Virginia] office, and its employees regularly work in that office"). At 

bottom, then, whether Virginia has a substantial connection to the events giving rise to the 

litigation remains, at best, unclear, and therefore Convergence's choice of its home forum should 

receive less deference than it is typically accorded. See Telepharmacy Solutions, Inc. v, 

Pickpoint Corp., 238 F. Supp. 2d 741, 743 (E.D. Va. 2003) ("[I]f... the cause of action bears 

little or no relation to that forum, the plaintiffs chosen venue is not entitled to such substantial 

weight." (citation and quotation marks omitted)). 

Sections 1404(a) and 1406(a) also require that transfer be "in the interest of justice," and 

on this point transfer of the claims against Microloops, HP, and Dynatron is in the interest of 

justice because (i) Microloops and Dynatron are not subject to personal jurisdiction in Virginia, 

and thus must either be dismissed or transferred under the plain language of § 1406(a), and (ii) 

transfer of the entire matter avoids the prospect that inconsistent judgments will be rendered on 

identical issues. With respect to whether dismissal or transfer of the claims against Microloops 

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and Dynatron is preferred, courts have regularly "order[ed] transfer rather than... dismiss the 

action if it would be more efficient or economical to do so." 14D Wright et al., Federal Practice 

and Procedure § 3827, at 589. Here, transfer is appropriate because neither of these defendants 

seeks dismissal, and transfer short-circuits the purely ministerial exercise of refiling suit in the 

Northern District of California.22 

Moreover, it is in the interest of justice to transfer the entire matter to the Northern 

District of California where all of the remaining defendants are properly subject to suit, as this 

avoids the possibility of inconsistent judgments being rendered on identical patent infringement 

issues. Indeed, it is well-settled that transfer under § 1404(a) is generally in the interest of justice 

if a decision not to transfer would lead to courts rendering inconsistent judgments on the same 

issue. As the Supreme Court has noted, "[t]o permit a situation in which two cases involving 

precisely the same issues are simultaneously pending in different District Courts leads to the 

wastefulness of time, energy and money that § 1404(a) was designed to prevent." Cont 7 Grain 

Co. v. Barge FBL-585, 364 U.S. 19, 26 (1960); accord Va. Beach v. Roanoke River Basin Ass 'n, 

116 F.2d 484,489 (4th Cir. 1985) ("Transfer and consolidation would also advance the 

economical resolution of the controversy over the permits. The parties would be able to litigate 

in one court the same issues that were the subject matter of actions instituted in two courts."). 

Notably, the potential for inconsistent judgments in patent cases may be greater on average than 

for many other types of cases owing chiefly to the large number of issues that typically arise in 

most patent cases, including, for example, infringement and willful infringement, various 

22 See supra note 7 (noting Microloops, HP, and Dynatron's election to seek transfer 

rather than dismissal under Rule 12(b)(2), Fed. R. Civ. P.). 

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invalidity issues under 35 U.S.C. §§ 102, 103, inequitable conduct, laches, waiver, not to 

mention Markman claim term determinations, which, in the mine run of patent cases, are rarely 

fewer than ten and often many more. Thus, the potential for inconsistent judgments is substantial 

if, following dismissal in this district, Convergence were to refile the dismissed claims against 

Microloops and Dynatron in California, while continuing to litigate in this district its claim 

against HP. For example, Microloops and Dynatron might be found liable for infringement 

while HP might not, notwithstanding the fact that a single, identical vapor chamber product is at 

issue. Accordingly, this factor—the potential for inconsistent judgments—while not dispositive, 

weighs significantly in favor of transfer in this case. 

In response, Convergence argues that jurisdictional discovery may allow it to establish 

that there is personal jurisdiction over Microloops and Dynatron in Virginia, thereby eliminating 

(i) the basis for transferring the claims against Microloops and Dynatron, and (ii) the prospect 

that inconsistent Markman determinations or infringement/invalidity judgments might be 

rendered in this case. Although it is true that jurisdictional discovery may lead to a finding of 

personal jurisdiction over Microloops and Dynatron in Virginia, it is also possible that such 

discovery will lead to the opposite result. What is certain, however, is that jurisdictional 

discovery is expensive and time-consuming. And in this respect, it is important to note that the 

Federal Circuit has held the transfer of a patent case to be within a district court's discretion "if 

the transfer would obviate a substantial question of personal jurisdiction" and avoid jurisdictional 

discovery. See In re Pflzer, Inc., 2010 U.S. App. LEXIS 4378, at *5 (Fed. Cir. Feb. 2, 2010). 

This principle is apposite here and provides an additional reason for transfer to the Northern 

District of California, namely that transfer avoids unnecessary jurisdictional discovery and 

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Case 5:10-cv-02051-EJD Document 32 Filed 05/11/10 Page 26 of 31
furthers "judicial economy and the interest of justice." Id. at *6. 

The remaining transfer factors—namely the convenience of the parties, the ease of access 

to evidence, and the docket congestion of the transferor and transferee courts—on balance weigh 

in favor of transfer. Specifically, it appears that no parties' witnesses or documents are located in 

Virginia. Instead, Convergence's identified witnesses and documents are located in Hong Kong, 

Microloops's identified witnesses are located in Taiwan and its documents are located in Taiwan 

or Pennsylvania, and HP's and Dynatron's identified witnesses and evidence are located in 

California. Thus, California—which is considerably nearer than Virginia to the parties' Hong 

Kong, Taiwan, and California witnesses and documents—is a more convenient place for the 

parties to litigate this matter. 

Convergence correctly argues that the comparative docket speeds of the transferor (E.D. 

Va.) and transferee (N.D. Cal.) fora weigh against transfer, the former according to Convergence 

averaging 10.2 months to trial and the latter 24.5 months to trial. Yet, these figures do not tell 

the whole story, as they are calculated averages for all types of civil cases. In this district, for 

example, patent cases, on average, take substantially longer to litigate than most civil cases. 

Given the Northern District of California's well-earned reputation as an experienced patent 

district,23 the averages may well overstate the difference in docket speeds with respect to patent 

23 Indeed, the Northern District of California has promulgated local rules specific to 

patent infringement cases. See N.D. Cal. Patent R. 1-2 ("These rules apply to all civil actions 

filed in or transferred to this Court which allege infringement of a utility patent in a complaint, 

counterclaim, cross-claim or third party claim, or which seek a declaratory judgment that a utility 

patent is not infringed, is invalid or is unenforceable."); Digital Background Corp. v. Apple, Inc., 

No. 07-cv-803, 2008 U.S. Dist. LEXIS 21101, at *9 (S.D. 111. Mar. 17, 2008) (noting, in 

conducting transfer analysis, that "[t]he Northern District of California has special local rules 

related to patent cases, from which it can be inferred that the Northern District of California hears 

more patent cases than the Southern District of Illinois does"). 

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Case 5:10-cv-02051-EJD Document 32 Filed 05/11/10 Page 27 of 31
cases. Moreover, although relative docket speeds is a pertinent factor in the transfer calculus, it 

is rarely, if ever, a primary or decisive factor, and it is not so here. See, e.g., Cognitronics 

Imaging Sys. v. Recognition Research Inc., 83 F. Supp. 2d 689, 699 (E.D. Va. 2000) ("Docket 

conditions, while a consideration, cannot be the primary reason for retaining a case in this 

district."); Hunter Eng'g Co. v. ACCUIndus., 245 F. Supp. 2d 761, 776 (E.D. Va. 2002) ("The 

docket congestion factor supports a denial of the transfer motion, but only slightly, and does not 

outweigh the interest in judicial economy."). See generally Annotation, 1 A.L.R. Fed. at 80-84 

(discussing docket conditions factor and noting that "[cjalendar conditions, however, are not 

decisive of the question of transfer."). 

In response, Convergence relies chiefly on the argument that it has invested significant 

resources in retaining and educating Virginia counsel, and that it cannot bear the additional 

expense or spare the time necessary to reeducate California counsel. On this issue, it is important 

to distinguish between (1) the inconvenience of retaining new counsel, which is not a proper 

factor affecting the transfer analysis, and (2) the financial status of the parties, which may be a 

proper factor to weigh in the transfer calculus. See id. at 69-73 (discussing factors separately). 

Courts have explained that the convenience of counsel is not properly considered because "[i]t 

will always be the case that the granting of a transfer will inconvenience counsel in the transferor 

district or necessitate the engagement of new counsel, and if such facts were to be accorded much 

weight in motions of this type, § 1404(a) would be rendered virtually nugatory." Id. at 70; see 

also Cognitronics, 83 F. Supp. 2d at 698 ("Plaintiffs argument that the cost of transporting East 

Coast counsel to litigate a case in the Southern District of California would pose an undue 

hardship on their limited financial resources raises an improper consideration before this court."). 

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Nonetheless, courts have also held that it is not in the interest of justice to transfer a case if doing 

so would force the plaintiff to abandon the case or declare bankruptcy. See Annotation, 1 A.L.R. 

at 71-72. 

In this case, Convergence's financial hardship argument does not tip the balance away 

from transfer for three reasons. First, the cost of reeducating new counsel in California is not a 

proper consideration here. Second, at this stage, there appears to be no personal jurisdiction over 

Microloops and Dynatron in Virginia, and it is likely that a fully litigated resolution of the 

question will be expensive and time consuming and still perhaps result in requiring Convergence 

to pursue its claims against these defendants elsewhere. And third, although Convergence 

contends that it "does not have sufficient resources to engage in a protracted litigation, as 

Convergence's market share has been placed in jeopardy by the infringing acts of Microloops,"24 

Convergence does not state that it will be financially unable to pursue its claim against the 

remaining defendants in the Northern District of California.25 Indeed, the fact that 

Convergence's evidence and key witnesses are located in Hong Kong, and that no evidence or 

witness is located in Virginia, suggests that litigating in the Northern District of California will 

not burden Convergence with expenses materially different from the expenses that would be 

incurred in litigating the matter in Virginia, aside from the engagement of California counsel. 

Convergence concedes as much when it argues that, with respect to procuring its own documents 

24 PL's Br. at 5. 

25 Notably, neither Convergence nor its parent company provide any specific information 

relating to their financial circumstances, the size of their operations, the degree to which 

defendants' sale of allegedly infringing products has eroded Convergence's market share, or the 

way in which this alleged market share erosion frustrates Convergence's ability to litigate in the 

Northern District of California. 

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from Hong Kong, "whether the destination is on the East Coast rather than the West Coast makes 

no material difference." PL's Br. at 11-12. This case does not present the scenario, for example, 

in which Virginia counsel are in-house or have ready access to witnesses or documents in the 

home forum. Simply put, there is no basis for concluding that the litigation will be sufficiently 

less expensive or less protracted if transfer is denied. And to the extent that Convergence relies 

on the argument that Microloops's alleged infringement is eroding Convergence's market share, 

it is worth noting that this economic circumstance remains true whether the matter is litigated in 

Virginia or California. Significantly, as discussed supra, transfer to the Northern District of 

California avoids conducting unnecessary jurisdictional discovery, thereby eliminating this 

expense altogether and allowing Convergence to proceed directly and expeditiously to the merits 

of its patent infringement claims. 

In sum, the application of the § 1404(a) and § 1406(a) factors to this case weigh in favor 

of transferring Convergence's patent infringement claim against Microloops, HP, and Dynatron 

to the Northern District of California. 

IV. 

In sum, because Convergence has, without good cause, failed to effect service of process 

on Sapphire within 120 days of filing its complaint, dismissal of the claim against Sapphire is 

mandated under Rule 4(m), Fed. R. Civ. P. This renders moot the severance motion. Moreover, 

it is clear that Convergence cannot make aprimafacie showing that there is personal jurisdiction 

over Microloops and Dynatron in Virginia under the stream of commerce theory. This lack of 

personal jurisdiction over Microloops and Sapphire in Virginia—in addition to consideration of 

the factors traditionally identified by courts in resolving a motion for transfer pursuant to 28 

-30-

Case 5:10-cv-02051-EJD Document 32 Filed 05/11/10 Page 30 of 31
U.S.C. §§ ]404(a), 14()6(a)—points persuasively to the conclusion ihai transfer of the claims 

against Miaoloops, HP, and Sapphire to the Northern District of California is convenient for the 

parlies and in ihe interest of justice. 

An appropriate Order has issued. 

Alexandria, Virginia 

May 11, 2010 

T.S. Ellis, III I 

United States District Judge 

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Case 5:10-cv-02051-EJD Document 32 Filed 05/11/10 Page 31 of 31