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International Business Machines Corporation v. Fair Isaac Corporation

March 23, 2006

INTERNATIONAL BUSINESS MACHINES CORPORATION, PLAINTIFF,
v.
FAIR ISAAC CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Denise Cote, District Judge:

OPINION & ORDER

Defendant Fair Isaac Corporation ("Fair Isaac") has moved to transfer this lawsuit to the District of Minnesota where related litigation between these parties is pending. The application is granted.

Background

On September 8, 2005, Fair Isaac filed a complaint in the United States District Court for the District of Minnesota against International Business Machines Corporation ("IBM") alleging that IBM's impending launch of its Websphere Process Server V6 constituted a breach of contract, an infringement of Fair Isaac's U.S. Patent No. 6,865,566, and a misappropriation of trade secrets. The Minnesota patent lawsuit is being actively litigated.

Fair Isaac develops and sells business management software products, including the Blaze Advisor. Introduced in 1997, Blaze Advisor assists customers in customizing computer software for their own needs without having to generate new computer code. The technology for Blaze Advisor is protected by patent '566, issued on March 8, 2005.

Fair Isaac and IBM worked together between November 1999, when IBM agreed to license Blaze Advisor technology for certain IBM products, and 2005. In the summer of 2005, IBM disclosed its plan to release Websphere Process Server V6, which Fair Isaac contends incorporates its proprietary, patented Blaze Advisor technology. IBM launched its product in the fall of 2005.

Having been sued in Minnesota, IBM reviewed its own library of patents and identified two old patents which it now contends that Blaze Advisor, and three other Fair Isaac products related to Blaze Advisor, infringe. On December 8, 2005, IBM filed this action asserting infringement of U.S. Patent No. 5,216,592 (also known as the "Mann patent") and U.S. Patent No. 5,276,776 (also known as the "Grady patent"), issued in 1993 and 1994, respectively. Until this lawsuit, and over the nine years in which Fair Isaac sold Blaze Advisor, IBM had never advised Fair Isaac that it was infringing any IBM patent.

Discussion

The standard for a motion to transfer pursuant to 28 U.S.C. § 1404 is well established. Section 1404 provides that "[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." 28 U.S.C. § 1404(a). A district court has broad discretion to grant or deny motions to transfer and makes its determination based 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); see also S.E.C. v. KPMG, LLP, No. 03 Civ. 671 (DLC), 2003 WL 1842871, at *2-3 (Apr. 9, 2003). The movant bears the burden of establishing that transfer is warranted. KPMG, 2003 WL 1842871, at *2. If the transferee court also has jurisdiction over the case, the Court must determine whether, considering the "convenience of parties and witnesses" and the "interest of justice," a transfer is appropriate.*fn1 The factors a court considers in making that determination include

(1) the convenience of witnesses, (2) the convenience of the parties, (3) the location of relevant documents and the relative ease of access to sources of proof, (4) the locus of operative facts, (5) the availability of process to compel the attendance of unwilling witnesses, (6) the relative means of the parties, (7) the forum's familiarity with the governing law, (8) the weight accorded the plaintiff's choice of forum, and (9) trial efficiency and the interest of justice, based on the totality of the circumstances.

Berman v. Informix Corp., 30 F. Supp. 2d 653, 657 (S.D.N.Y. 1998). A court should not disturb a plaintiff's choice of forum "unless the defendants make a clear and convincing showing that the balance of convenience favors defendants' choice." Id. at 656.

Factors 1 & 5: Convenience of Witnesses and Availability of Service

The parties vigorously debate whether Minnesota or New York is more convenient for the witnesses. Many of the Fair Isaac technical employees with knowledge of the issues in dispute are in California, where it designs and develops its products.

The four inventors of IBM's '776, or Grady, patent reside in Maryland, where the patent was developed, Pennsylvania, and Ohio. Only one remains employed by IBM. The '592, or Mann, patent was issued to three inventors. None of these inventors still works for IBM; the current residence of two is unknown; the third resides in North Carolina. The '592 patent was developed through work done approximately twenty years ago, which IBM represents was conducted in Kingston, New York. The IBM inventors who live outside ...


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