United States District Court, D. Arizona
DAUGLAS L. RAYES DISTRICT JUDGE.
and Cree manufacture and sell LED lights. At issue in this
case is technology used inside LED lightbulbs allowing them
to have the look and feel of traditional incandescent bulbs
while also having energy efficiency, a long useful life, and
a relatively low cost. OptoLum claims to be the inventor of
this technology and alleges that Cree has misappropriated the
reputation to which OptoLum is entitled and infringes on
OptuLum's patents. OptoLum filed suit against Cree in
November 2016. (Doc. 1.) The amended complaint asserts a
false advertising under the Lanham Act, an unjust enrichment
claim, and two patent infringement claims. (Doc. 32.)
the Court are Cree's motion to transfer and motion to
dismiss counts one and two. (Docs. 22, 24.) The motions are
fully briefed. (Docs. 31, 35, 41, 42.) For reasons stated
below, the motion to transfer is denied and the motion to
dismiss is granted.
The Motion to Transfer
is based out of Tempe, Arizona and chose to file suit in this
District. Cree contends that the case should be transferred
to the Middle District of North Carolina pursuant to the
change of venue statute, 28 U.S.C. § 1404, because
Cree's facilities and records are in North Carolina,
several potential witnesses reside there, and the case has
little connection to Arizona. (Doc. 22 at 1-2.) Section
1404(a) provides that a court may transfer an action to any
other district where it might have been brought for the
“convenience of the parties and witnesses, in the
interest of justice[.]”
is no dispute that this action could have been brought in
North Carolina. The Court therefore must determine whether
transfer is warranted for the convenience of the parties and
witnesses and in the interest of justice. The Court has broad
discretion in making this determination “according to
an ‘individualized, case-by-case consideration of
convenience and fairness.'” Jones v. GNC
Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). In
Jones, the Ninth Circuit provided a list of
non-exclusive factors to consider: (1) the location where
relevant agreements were negotiated and executed, (2) the
state most familiar with governing law, (3) the
plaintiff's choice of forum, (4) the parties'
contacts with the forum, (5) the contacts relating to the
plaintiff's cause of action, (6) differences in cost to
litigate in each forum, (7) the availability of compulsory
process to compel witness attendance, and (8) the ease of
access to sources of proof. Id. at 498-99. Cree
bears the burden of showing that a transfer is warranted.
See Commodity Futures Trading Comm'n v. Savage,
611 F.2d 270, 279 (9th Cir. 1979).
carefully considered the relevant factors, the Court finds
that Cree has not met its burden. Cree asserts that North
Carolina is a more convenient place for it to litigate
because its products, documents, and witnesses are located
there and this action has only minimal contacts with Arizona.
(Doc. 22 at 9-10.) But these are insufficient reasons to
transfer the case given that a transfer would merely shift
inconvenience from Cree to OptoLum. This Circuit has made
clear that a transfer is inappropriate under § 1404(a)
if it “would merely shift rather than eliminate the
inconvenience.” Decker Coal Co. v.
Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir.
undoubtedly would be more burdensome for Cree to litigate in
Arizona than in North Carolina, where Cree has its principal
place of business. Nevertheless, “with the advances in
transportation and telecommunications and the increasing
interstate practice of law, any burden is substantially less
than in days past.” CE Distribution, LLC v. New
Censor Corp., 380 F.3d 1107, 1112 (9th Cir. 2004).
Moreover, given the growth of “electronic communication
and document production, discovery costs should be about the
same in either forum.” Roth v. Adtran, Inc.,
No. CV-13-1735-PHX-DGC, 2013 WL 6058294, at *3 (D. Ariz. Nov.
18, 2013). Cree is a multi-million dollar company with
employees and offices throughout the world. The burden it
might suffer litigating in Arizona is not heavy enough to
overcome the “great weight” accorded to
OptoLum's choice of forum. Lou v. Belzberg, 834
F.2d 730, 739 (9th Cir. 1987).
federal Lanham Act and patent law claims asserted by OptoLum
would be equally familiar to district courts in both Arizona
and North Carolina, but Cree has not shown that the court in
North Carolina is more familiar with Arizona law governing
the unjust enrichment claim. Furthermore, “Arizona has
a strong interest in ensuring that its citizens are
compensated for their injuries.” Roth, 2013 WL
6058294, at *3 (citing Ochoa v. J.B. Martin & Sons
Farms, Inc., 287 F.3d 1182, 1193 (9th Cir. 2002)).
do not lightly disturb a plaintiff's choice of forum,
particularly where, as here, the forum chosen is the
plaintiff's domicile. L.A. Mem'l Coliseum v.
NFL, 89 F.R.D. 497, 499-500 (C.D. Cal. 1981). Indeed,
when “the home forum has been chosen, it is reasonable
to assume that this choice is convenient.” Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 255-56 (1981). The
motion to transfer is denied because Cree has not made a
“strong showing of inconvenience to warrant upsetting
[OptoLum's] choice of forum, ” Decker
Coal, 805 F.2d at 843, or that a change of venue
otherwise is in the interest of justice.
The Motion to Dismiss
moves to dismiss the Lanham Act and unjust enrichment claims
pursuant to Federal Rule of Civil Procedure 12(b)(6). A
successful Rule 12(b)(6) motion must show that the complaint
lacks a cognizable legal theory or fails to allege facts
sufficient to support such a theory. See Balistreri v.
Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.
1988). A complaint that sets forth a cognizable legal theory
will survive a motion to dismiss only where it contains
“sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id.
(citing Twombly, 550 U.S. at 556).
The Lanham Act Claim for False Advertising (Count
purports to assert a false advertising claim under Lanham Act
§ 43(a), 15 U.S.C. 1125(a), in count one of the amended
complaint. (Doc. 32 ¶¶ 192-97.) Section 43(a)
creates a federal remedy against a person who, in connection
with any goods, uses in commerce a “false designation
of origin, false or misleading description of fact, or false
or misleading representation of fact” that is likely to
cause confusion as to the origin of the goods, 15 U.S.C.
§ 1125(a)(1)(A), or misrepresents the nature,
characteristics, or qualities of the goods, §
1125(a)(1)(B). The elements of a false advertising claim are:
(1) a false statement of fact by the defendant in a
commercial advertisement about its own or another's
product, (2) the statement actually deceived or has the
tendency to deceive a substantial segment of its audience,
(3) the deception is material, in that it is likely to
influence the purchasing decision, (4) the defendant caused
its false statement to enter interstate commerce, and (5) the
plaintiff has been or is likely to be injured as a result of
the false statement. Southland Sod Farms. v. Stover Seed
Co., 108 F.3d 1134, 1139 (9th Cir. 1997).
alleges that various statements Cree made are false and
mislead consumers into believing that Cree, rather than
OptoLum, invented the technology inside LED bulbs that allows
them to produce omnidirectional light like traditional
incandescent bulbs while also having energy efficiency, a
long useful life, and a low cost. (Doc. 32 ¶¶
13-21, 122-25, 171-86.) Specifically, OptoLum alleges that
the following statements constitute false advertising under
• The “Cree Filament Tower™
Technology” is “the genius idea inside” the
Cree LED bulb (Id. ¶¶ 17, 124);
• Cree “found a way to put the LEDs in the center
of the bulb like a traditional light bulb” and
“we're making an LED but we are actually inventing
all the technology in between” (¶ 174);
• “[O]ne of the technical breakthroughs that
enabled Cree to break the $10 threshold is our new Cree
Filament Tower™ Technology. The Filament Tower™
is the Cree innovation that lets our LED bulb replicate the
look and feel ...