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HERBERT LIMITED PARTNERSHIP v. ELECTRONIC ARTS INC.

July 8, 2004.

HERBERT LIMITED PARTNERSHIP, Plaintiff,
v.
ELECTRONIC ARTS INC.; SONY MUSIC ENTERTAINMENT, INC.; SONY COMPUTER ENTERTAINMENT AMERICA, INC.; RANDOM HOUSE, INC.; WAL-MART STORES, INC.; BEST BUY COMPANY, INC.; COMPUSA, INC.; ELECTRONICS BOUTIQUE, INC.; and KB TOYS, INC. Defendants.



The opinion of the court was delivered by: VICTOR MARRERO, District Judge

DECISION AND ORDER

Plaintiff Herbert Limited Partnership ("HLP") filed this action asserting, among several claims, copyright and trademark infringement in relation to several video games based on the science fiction book Dune and movie of the same name, and their written and film progeny (the "Dune Works"). Defendants now ask this Court, borrowing from the advanced techniques of the works at issue, to function as a space-folding navigator and transport this case to the Northern District of California. Upon review of the parties' submissions in this regard, the Court concludes that the convenience of the witnesses, the location of the operative facts, the preservation of judicial resources, and additional considerations discussed below favor litigation of this case in the Northern District of California. Accordingly, the motion to transfer is granted. I. FACTS AND PROCEEDINGS

HLP, a Washington State limited partnership, owns certain copyrights and trademarks in the Dune Works, a popular series of science fiction books written by Frank Herbert ("Herbert"). The works abound with incidents of political intrigue, adventure, environmentalism and mysticism that are set thousands of years in the future in a fictional universe featuring feuding noble houses, futuristic technologies, and individuals possessing supernatural powers.

  In 1978 Herbert, then a resident of Washington State, granted to Famous Films Productions the motion picture and merchandising rights to the first book in the Dune series (the "Dune Novel") pursuant to a contract expressly governed by the laws of California (the "1978 Agreement"). The motion picture "Dune," based on the Dune Novel, was ultimately produced in 1984 (the "Dune Film").

  Universal City Studios, Inc. ("Universal"), a California-based company, ultimately acquired the motion picture and merchandising rights to the Dune Film. In 1989, Universal sublicensed to Virgin Mastertronic, Inc. ("Virgin"), a California-based company, the right to develop video games based on the Dune Film (the "1989 Agreement"). The 1989 Agreement provided that it would be governed by the laws of the State of California and that "claims and/or lawsuits may be brought in Los Angeles County in [Universal's] sole discretion if both parties reside in the U.S.A." (1989 Agreement at 10, attached as Ex. E to Declaration of Jacob J. Schatz dated March 23, 2004 ("Schatz Dec.")) Virgin ultimately produced one video game under the 1989 Agreement.

  In 1995, after the termination of the 1978 Agreement, HLP entered into an agreement (the "1995 Agreement") with Universal whereby HLP conveyed to Universal a limited, non-exclusive right to exploit the Dune Film. As part of the 1995 Agreement, HLP granted Universal merchandising rights in the Dune Novel to the extent that the book was presented in the Film. The 1995 Agreement expressly prevented Universal from using the Dune Novel in any other movie, television show or other derivative work. The 1995 Agreement provided that it was subject to California law and that both parties to the agreement "consent[ed] to the jurisdiction of the Courts of the State of California." (1995 Agreement at 4, attached as Ex. D to Schatz Dec.)

  Defendant Electronic Arts, Inc. ("EA"), a Delaware Corporation with its principal place of business in California, ultimately acquired Virgin's rights to exploit the Dune Film for purposes of producing video games. In 1998 EA released an updated edition of Virgin's video game, now titled "Dune 2000," and in 2001, after EA and Universal renegotiated their existing licensing agreement, EA released a new game, titled "Emperor: Battle for Dune" (together with Dune 2000, the "Video Games").

  EA and Prima Publishing ("Prima"), a California Corporation with its principal place of business in California, entered into an agreement in 1997 (the "Prima Agreement") under which Prima would produce written strategy guides to the Video Games (the "Strategy Guides"). The Prima Agreement and subsequent amendments were negotiated in California and are expressly governed by California law. The Prima Agreement also provides that "[t]he exclusive venue for any action under this Agreement shall be the county of the principal place of business of the defending party." (Prima Agreement at 18, attached as Ex. H to Schatz Dec.) In March 2001, defendant Random House, Inc. ("Random House"), a Delaware Corporation with its principal place of business in New York City, acquired Prima.

  The Dune 2000 video game is designed for use with the Sony PlayStation video game system, which was developed by Sony Computer Entertainment America, Inc. ("SCEA"), a Delaware corporation with its principal place of business in California. The physical discs for the Dune 2000 game are produced by Sony Disc Manufacturing ("SDM"), a division of defendant Sony Music Entertainment, Inc. ("Sony"), a Delaware corporation with its principal place of business in New York City. SDM's principal place of business is in Indiana.

  The remaining defendants are Wal-Mart Stores, Inc. ("Wal-Mart"), a Delaware corporation with its principal place of business in Arkansas; Best Buy Company, Inc. ("Best Buy"), a Minnesota corporation with its principal place of business in Minnesota; CompUSA ("CompUSA"), a Delaware corporation with its principal place of business in Dallas, Texas; Electronics Boutique, Inc. ("EB"), a Pennsylvania corporation with its principal place of business in Pennsylvania; and KB Toys, Inc. ("KB"), a Delaware corporation with its principal place of business in Massachusetts (collectively, the "Retail Defendants" and together with the other defendants described above, the "Defendants"). These Retail Defendants distribute and sell the Video Games through retail stores in this District and across the country.

  In June 2003, counsel for HLP, EA and Universal met to discuss an ongoing dispute over whether the Video Games and Strategy Guides violate HLP's copyrights and trademarks in the Dune Works. These three entities entered into a Tolling and Standstill Agreement (the "Tolling Agreement"), under which they agreed to engage in good faith settlement discussions and "not to file any legal claims or commence any legal action against the others in any forum until October 31, 2003." (Tolling Agreement dated June 30, 2003, attached as Ex. B to Schatz Dec.) The Tolling Agreement also provided that any applicable statutes of limitations relating to the dispute that had not yet expired by the date of the agreement would be tolled for the duration of the Tolling Agreement. The parties to the Tolling Agreement agreed to use the services of a mediator in California. Finally, the Tolling Agreement provided that it was to be construed under the laws of California and could be enforced only in federal courts in California or, if a federal court had no jurisdiction, then in California state courts.

  On October 31, 2003, HLP filed a complaint in this district against Sony, SCEA and Random House for copyright and trademark violations, unfair competition, and violations of New York State business law. On November 5, 2003, EA filed an action in the Northern District of California (the "California Case") against Herbert Enterprises, LLC ("HE"), which EA believed to be the successor to HLP, seeking a declaration that the Video Games did not infringe any of HE's trademarks or copyrights. On November 6, HLP filed an amended complaint in this District which added EA and the Retail Defendants as named defendants and added New York State law claims for false advertising and deceptive business practices.

  Defendants now move to transfer this case to the Northern District of California.

  II. DISCUSSION

  A. LEGAL STANDARD FOR MOTION TO TRANSFER

  Under 28 U.S.C. § 1404(a), "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." A district court has broad discretion when deciding a transfer motion, and should base its ruling on "notions of convenience and fairness on a case-by-case basis." In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992).

  When deciding a § 1404(a) motion to transfer, therefore, the initial inquiry is whether the case could have been brought in the proposed transferee district, here the Northern District of California. See Mattel, Inc. v. Robarb's, Inc., 139 F. Supp.2d 487, 490 (S.D.N.Y. 2001). Once the defendant overcomes that threshold, courts generally consider nine factors to determine whether transfer is warranted: (1) the convenience of witnesses; (2) the convenience of parties; (3) the location of relevant documents and the relative ease of access to sources of proof; (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) the comparative familiarity of each district with the governing law; (8) the weight accorded to plaintiff's choice of forum; and (9) judicial economy and the interests of justice. See Hutton v. Priddy's Auction Galleries, Inc., 275 F. Supp.2d 428, 441 (S.D.N.Y. 2003); Ayala-Branch v. Tad Telecom, Inc., 197 F. Supp.2d 13, 15 (S.D.N.Y. 2002).

  It is undisputed that HLP could have brought this action in the Northern District of California.

  B. TRANSFER FACTORS

  1. Convenience of Witnesses

  Courts typically regard the convenience of witnesses as the most important factor in considering a § 1404(a) motion to transfer. See Mears v. Montgomery, No. 02 Civ. 0407, 2004 WL 964093 (S.D.N.Y. May 5, 2004); Kiss My Face Corp. v. Bunting, No. 02 Civ. 2645, 2003 WL 22244587 (S.D.N.Y. Sept. 30, 2003); Pilates, Inc. v. Pilates Inst., Inc., 891 F. Supp. 175, 183 (S.D.N.Y. 1995). When assessing the convenience of witnesses, a court does not merely tally the number of witnesses who reside in the current forum in comparison to the number located in the proposed transferee forum. Instead, the court must qualitatively evaluate the materiality of the testimony that the witnesses may provide. See Foley v. Sammons Preston, Inc., No. 03 Civ. 5485, 2004 WL 35438 (S.D.N.Y. Jan. 6, 2004); DealTime.com Ltd. v. McNulty, 123 F. Supp.2d 750, 755 (S.D.N.Y. 2000); American Alliance Ins. Co. v. Sunbeam Corp., No. 98 Civ. 4703, 1999 WL 38183 (S.D.N.Y. Jan. 28, 1999). Defendants, as ...


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