The United States Code, 28 U.S.C. § 1404(a), permits a district court to transfer a civil action to any other district where it might have been brought, for the convenience of the parties and witnesses, and in the interest of justice. Importantly, a district court should not disturb a plaintiff's choice of forum unless that choice is clearly outweighed by other considerations. Considerations for whether to transfer a case from where it was initially filed include: (1) the convenience of the witnesses; (2) the location of relevant documents and the relative ease of access to sources of proof; (3) the convenience of the parties; (4) the locus of the operative facts; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the relative means of the parties; (7) a forum's familiarity with the governing law; (8) the weight accorded a plaintiff's choice of forum; and (9) trial efficiency and the interests of justice, all based on the totality of circumstances. In particular, where the operative facts underlying the cause of action did not occur in the plaintiff's chosen forum, that choice is entitled to less consideration.In Evans Design Dynamics, LLC v. Nike, Inc.,1 the Middle District of Florida granted the defendants' motion to transfer the patent-infringement suit to the District of Oregon.
Plaintiff Evans Design is a limited-liability company organized under the laws of Florida—active as of January 27, 2012—with its principal place of business in the Middle District of Florida. Anthony Evans, the inventor of the patent at issue and a resident of the United Kingdom, is the sole owner and shareholder of Evans Design, which was formed to be the licensing arm of the patent at issue; Evans Design owns all interests in the patent. Defendant Nike is a corporation organized under the laws of the State of Oregon with its principal place of business in Beaverton, Oregon. Defendant Umbro is a corporation organized under the laws of the State of Delaware with its principal place of business also in Beaverton, Oregon. Umbro is an indirect, wholly owned subsidiary of Nike.
Evans Design sued Nike and Umbro for patent infringement, alleging that they infringed its patent by making, using, importing, offering to sell, and/or selling certain athletic shoes. According to Evans Design, in 2003, Umbro stopped making payments to Mr. Evans under a licensing agreement but continued making, using, importing, offering to sell, and/or selling infringing products without authorization. Then, in 2007, Nike purchased Umbro and, as a result of this acquisition, Evans Design claims that Nike knew or should have known of Umbro's infringement of Mr. Evan's patent rights and has profited from them. With their motion to transfer, Nike and Umbro sought to transfer the case to the District of Oregon under 28 U.S.C. § 140 (a).
The Evans Decision
The thrust of Evans Design's argument against the transfer to the District of Oregon rested on the fact that it was formed under the laws of Florida, pays applicable taxes in Florida, and rents office space in Tampa, where it also maintains its principal and mailing address. Evans Design further claimed that all its relevant documents are located in Florida. The Florida district court, however, found these considerations unpersuasive, particularly because Evans Design was not incorporated in Florida until shortly before the suit was filed in 2012, yet alleged infringement starting in 2004 by Umbro and 2007 by Nike (when it acquired Umbro). In assessing the other factors, the Florida district court focused on Nike's and Umbro's significant activities in Oregon.
Looking at the locus of the operative facts, the Florida district court found that while Nike's and Umbro's products are sold nationwide, none of their design, development, and testing activity relating to their respective accused products occurred in Florida. The court further noted that neither company's accused products are manufactured in the United States. Thus, the court held that most, if not all, of the operative facts underlying the cause of action appear to have occurred outside Florida, thus favoring transfer.
Considering witness and party convenience, the Florida district court found that these factors, on the whole, favored transfer. The court noted that Nike's and Umbro's key employees likely to be involved in the litigation lived in Oregon. As for Evans Design, only two witnesses—Mr. Evans and the law firm that prosecuted the patent—were addressed in the pleadings, neither residing in Florida.
As for the location of relevant documents and relative ease of access to sources of proof, the Florida district court concluded that these factors favored transfer as well. Specifically, the court noted that in patent-infringement cases, the bulk of the relevant evidence usually comes from the accused infringer and, in this case, that evidence resided in Oregon. Specifically, records related to the design, development, testing, marketing, and sale of the accused products were all in Oregon.
The Florida district court again focused on Nike and Umbro's residence in Oregon when it examined the interests the possible forum states have in the litigation, trial efficiency, and the availability of process to compel the attendance of unwilling witnesses. Ultimately, the court found that with greater availability of witnesses and evidence, the district court for the District of Oregon was better situated to effectively resolve the issues in this case without overwhelming disruption to the parties.
Finally, the Florida district court considered the relative means of the parties. While Evans Design argued that Nike and Umbro were far more able to bear the financial costs of the litigation, the court remained unpersuaded, noting that this factor was less significant where so little of the operative facts occurred in the district and most of the witnesses, records, and documents were located in Oregon. In other words, the ability of Nike and Umbro to pay for the litigation did not outweigh the other factors.
In sum, the court held that transfer was appropriate, given that the bulk of the parties' witnesses and evidence relevant to the infringement claims or the defenses resided in and around Oregon—where most of the relevant events took place—and given that there was no reason to believe that the district court in Oregon could not capably, efficiently, and expeditiously handle the dispute, despite Evans Design's residence in the Middle District of Florida.
Strategy and Conclusion
Parties should be aware that establishing residence in a particular jurisdiction should be mindful that a court may find this insufficient to maintain a lawsuit in that jurisdiction if other relevant factors exist. Specifically, a party deciding where to bring an action should consider (1) whether another district would be significantly more convenient for the witnesses and parties, (2) where relevant documents are located, and (3) where the locus of operative facts occurred. Additionally, establishing residence in a jurisdiction only shortly before filing suit will likely diminish the weight that the plaintiff's residency carries in the analysis.