Opinion ID: 6112114
Heading Depth: 1
Heading Rank: 2

Heading: facts

Text: CA filed this suit in the Marshall Division of the Eastern District of Texas, alleging that Netflix infringes five of its patents relating to networking techniques for improving the quality and efficiency of content delivery. It is undisputed that Netflix does not own or lease any offices in the Eastern District. CA’s complaint premised venue over Netflix in CA’s chosen forum based on the location of servers installed at internet service providers (ISPs) under contracts with Netflix that are part of Netflix’s “Open Connect” content delivery network allowing local delivery of content to Netflix customers. Netflix moved to transfer under § 1404(a) to the Northern District of California. Netflix noted that both CA and Netflix are headquartered in that district; that district is where Netflix designed, developed, and manages the services and products that are the basis of the infringement allegations; and that district is where Avago and parent Broadcom Corp. sued Netflix based on the same products and where, after CA brought the present action, Netflix sought a declaratory judgment against CA concerning the patents asserted in this case. See Broadcom, Inc. v. Netflix, Inc., 3:20-cv-4677 (N.D. Cal. Mar. 13, 2020); Netflix, Inc. v. CA, Inc., 3:21-cv-03649-EMC (N.D. Cal. May 14, 2021). As noted, Netflix also moved to dismiss for lack of venue, invoking this court’s decision in In re Google LLC, 949 F.3d 1338 (Fed. Cir. 2020), to argue that Netflix’s local servers could not support venue. The district court, adopting the recommendation of the magistrate judge, denied both motions. It ruled that the arrangements Netflix had with its ISPs to provide local content delivery through in-district servers were Case: 22-110 Document: 15 Page: 3 Filed: 01/19/2022 IN RE: NETFLIX, INC. 3 materially different from the server arrangements at issue in Google. On that basis, the court found venue proper and denied the motion to dismiss. In denying the motion to transfer, the district court assessed the private and public interest factors enunciated in In re Volkswagen of America, Inc., 545 F.3d 304 (5th Cir. 2008) (en banc). The court determined that the factor addressing local interests favored transfer because the Northern District of California was the locus of the events giving rise to this suit. On the other hand, the court determined that the factor addressing administrative difficulties from court congestion weighed against transfer and the factors addressing relative ease of access to evidence and availability of compulsory process each also weighed slightly against transfer. The remaining factors, the district court held, favored neither of the two forums. Of particular significance, the district court considered the declaration submitted by Netflix’s Manager of Litigation and IP Enforcement, Elena Garnica, which stated that all its source code, financial information, and other documentation that would be at issue in this case are located at Netflix headquarters in the Northern District of California, but the court ruled that Netflix had provided an insufficient factual foundation for its claim that the sources of proof factor favored the Northern District of California. In addition, the court considered Netflix’s identification of 21 potential witnesses resident in that district—product and engineering team employees who wrote articles about the accused technology discussed in CA’s complaint, as well as an employee in Northern California knowledgeable about Netflix’s finances. But the court determined that “[b]oth parties name several of Defendants’ employees in both the Northern District of California and the Eastern District of Texas,” so the “willing witness” factor was neutral. Finally, the court noted that the California forum could compel the testimony of patent prosecution attorneys, prior art inventors, and former Netflix employees, but the court gave that Case: 22-110 Document: 15 Page: 4 Filed: 01/19/2022 4 IN RE: NETFLIX, INC. ability little weight because patent prosecution attorneys “almost never testify” and, while CA and Netflix both were specific in identifying third-party witnesses, only CA, not Netflix, showed why testimony from them would be important. Appx027. As a result, the court deemed this factor to weight against transfer. On balance, the district court decided that, with the factors mostly either neutral or weighing against transfer, Netflix had not met its “burden to show that the Northern District of California is ‘clearly more convenient’ than the Eastern District of Texas.” Appx035 (quoting Volkswagen, 545 F.3d at 315). On that basis, the court denied transfer.