Deloitte Consulting LLP v. Sagitec Solutions LLCDeloitte Consulting LLP v. Sagitec Solutions LLC
Case Information
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE DELOITTE CONSULTING LLP and §
DELOITTE DEVELOPMENT LLC, §
§
Plaintiffs , §
§
v. § Civil Action No. 23-325-WCB § SAGITEC SOLUTIONS LLC, §
§
Defendant . §
§
§ MEMORANDUM OPINION AND ORDER
Plaintiffs Deloitte Consulting LLP and Deloitte Development LLC (collectively, “Deloitte”) filed this action against defendant Sagitec Solutions LLC on March 23, 2023. In its complaint, Deloitte asserted claims for copyright infringement under federal law, trade secret misappropriation under New York and federal law, unfair competition under New York law, and unjust enrichment under New York law. Dkt. No. 1. On May 15, 2023, Sagitec moved to dismiss the complaint for lack of personal jurisdiction and, in the alternative, to transfer the case to the District of Minnesota. Dkt. No. 11. For the reasons set forth below, the motion is DENIED.
I. Background
The Deloitte plaintiffs are organized under Delaware law and have their principal place of business in New York, New York. Sagitec is a Nevada limited liability company and has its principal place of business in Saint Paul, Minnesota. Both Deloitte and Sagitec offer, among other products and services, software products that allow state governments to manage their unemployment insurance programs.
In or around 2003, BearingPoint Inc., a predecessor company of Deloitte, began developing an unemployment insurance software system called “uFACTS.” Dkt. No. 1 ¶ 19. Deloitte’s complaint describes uFACTS as a “customizable enterprise application for managing [unemployment insurance] claims, appeals, and wage determinations.” Id. ¶ 21. BearingPoint first deployed the uFACTS software in 2007. In 2009, Deloitte acquired the uFACTS software and associated intellectual property from BearingPoint. Id. ¶¶ 22–23. Deloitte alleges that it has “continued to develop and create new material” for uFACTS since acquiring the uFACTS intellectual property from BearingPoint. ¶ 23.
According to Deloitte’s complaint, Sagitec hired several former Deloitte employees who had worked on the uFACTS software, and used those employees to develop a competing product called “Neosurance.” ¶¶ 44–45. The principal allegation underlying Deloitte’s claims is that the former Deloitte employees used Deloitte’s source code and trade secrets regarding the uFACTS software in developing the Neosurance software for Sagitec.
Although Sagitec claims that its PUA software “was not a full unemployment insurance system like Neosurance,” id. , Deloitte contends that the PUA software was based on Sagitec’s Neosurance product. See Dkt. No. 37-1 at 7 (“Sagitec will leverage the existing Neosurance™ functionality . . . .”); Dkt. No. 37-3 (“[W]e understand that you are leveraging your NEOSURANCE base system . . . .”). The system was designed for use by Delaware residents, who would file claims for pandemic unemployment benefits using the software. See generally Dkt. No. 37-1.
In 2020, Chris Peretto, Sagitec’s Director of Business Development, contacted a representative of the Delaware Department of Labor by email, offering a proposal for providing technology that could assist the State in dealing with unemployment compensation claims during the pandemic, referred to as the Pandemic Unemployment Assistance (“PUA”) software. Dkt. No. 37-1, Exh. 1. Sagitec subsequently provided the Delaware official with a demonstration of the operation of its PUA system.
After negotiations that involved numerous conversations and the exchange of numerous drafts, the Delaware Department of Labor subsequently approved the proposal. Dkt. No. 15 ¶10; Dkt. No. 37-1, Exhs. 5–14. The parties ultimately agreed on a price for the initial implementation of the system, along with monthly maintenance fees and storage costs after the expiration of the PUA program. The agreement became effective as of May 1, 2020. Id. , Exhs. 2, 4, 5. The contract was set to remain in effect until December 2024, and it has been amended at least twice, once in October 2020, and again in May 2023. , Exhs. 17–18, 28. The contract further provided that its interpretation would be governed by Delaware law, and as part of the contract, Sagitec consented to jurisdiction and venue in Delaware. [1] In addition, Sagitec agreed to indemnify Delaware for any claims of violations of third parties’ intellectual property rights. , Exh. 16, at 2155–58.
Although Sagitec claims that the PUA software “was not a full unemployment insurance system like Neosurance,” id. , Deloitte contends that the PUA software was based on Sagitec’s Neosurance product. See Dkt. No. 37-1 at 7 (“Sagitec will leverage the existing Neosurance™ functionality . . . .”); Dkt. No. 37-3 (“[W]e understand that you are leveraging your NEOSURANCE base system . . . .”). The system was designed for use by Delaware residents, who would file claims for PUA using the software. See generally Dkt. No. 37-1.
Mr. Peretto asserted in his declaration that the PUA software is the only product that Sagitec has sold to the State of Delaware or in Delaware. Dkt. No. 15 ¶ 10. However, he noted that in February 2023, Sagitec submitted a proposal to Delaware to implement “a bespoke custom- developed unemployment insurance software.” ¶ 16. As of Maya 15, 2023, he added, Sagitec “has not had any substantive communications with the Delaware Department of Labor about that proposal. Id.
II. Legal Standard
A. Personal Jurisdiction
Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move to dismiss a
complaint on the ground that the court lacks personal jurisdiction over that defendant. In ruling
on a motion to dismiss for lack of personal jurisdiction, the court must first determine whether the
exercise of jurisdiction is permitted under the long-arm statute of the state in which the court is
located.
IMO Indus., Inc. v. Kiekert AG
,
B. Transfer
Under 28 U.S.C. § 1404(a), a district court may, for the convenience of parties and
witnesses, “transfer any civil action to any other district or division where it might have been
brought” if doing so would be “in the interest of justice.” In patent cases, the Federal Circuit has
instructed district courts to apply the law of the regional circuit, here the Third Circuit, in
evaluating motions to transfer.
In re Juniper Networks, Inc.
,
III. Discussion
A. Personal Jurisdiction
I begin by addressing Sagitec’s argument that this case should be dismissed for lack of personal jurisdiction. The Delaware long-arm statute provides six categories of activities that may subject a defendant to personal jurisdiction in the State. 10 Del. C. § 3104(c). As relevant to this case, the long-arm statute provides that jurisdiction lies over a person who “[t]ransacts any business or performs any character of work or service in the State”; “[c]ontracts to supply services or things in this State”; or “regularly does or solicits business, engages in any other persistent course of conduct in the State or derives substantial revenue from services, or things used or consumed in the State.” Id. The Supreme Court of Delaware has recognized that section 3104(c) “has been broadly construed to confer jurisdiction to the maximum extent possible under the due process clause.” LaNuova D & B, S.p.A. v. Bowe Co. , 513 A.2d 764, 768 (Del. 1986). Accordingly, the exercise of jurisdiction over Sagitec is permissible if doing so would comport with the Due Process Clause of the Fifth Amendment.
In applying the Due Process Clause to questions of personal jurisdiction, the Supreme
Court has recognized two types of personal jurisdiction: general jurisdiction and specific
jurisdiction.
Ford Motor Co. v. Montana Eighth Jud. Dist. Ct.
, 141 S. Ct. 1017, 1024 (2021).
General jurisdiction typically lies over a corporation in its place of incorporation and in the state
in which it has its principal place of business.
Id.
Specific jurisdiction “covers defendants less
intimately connected with a State, but only as to a narrower class of claims.” For the exercise
of specific jurisdiction to be proper, “there must be an affiliation between the forum and the
underlying controversy, principally, [an] activity or occurrence that takes place in the forum State
and is therefore subject to the State’s regulation.” at 1025 (quoting
Bristol-Myers Squibb Co.
v. Superior Ct. of Cal., San Francisco Cnty.
,
In determining whether a defendant is subject to specific jurisdiction in a particular forum,
courts look to (1) whether the defendant has “‘purposefully directed’ its activities at residents of
the forum” and (2) whether “the litigation results from alleged injuries that ‘arise out of or relate
to’ those activities.”
Burger King Corp. v. Rudzewicz
, 471 U.S. 462, 472 (1985) (citations
omitted). The critical question is whether Sagitec has conducted activity in Delaware such that it
should “reasonably anticipate being haled into court” in that forum.
World-Wide Volkswagen
Corp. v
.
Woodson
,
1. Whether Sagitec Purposefully Directed Its Activities at Delaware Residents
The first question is whether Sagitec “purposefully directed” its activities at Delaware residents. See id. Deloitte argues that Sagitec engaged in three types of activities that were directed at Delaware residents: (1) interacting with representatives with the Delaware Department of Labor in developing its proposal for the PUA product; (2) entering into a contract with a Delaware resident, namely, the Delaware Department of Labor; and (3) selling a product (the PUA software) that Sagitec knew would be used in Delaware by Delaware residents. Dkt. No. 37 at 10– 11. Those activities plainly appear to be purposefully directed at the State of Delaware.
Sagitec argues that it has not purposefully directed its activities at residents of Delaware for several reasons: because the PUA software is developed and hosted outside of Delaware; because Sagitec’s negotiations with the Delaware Department of Labor took place outside of Delaware; and because Sagitec has never physically visited the State of Delaware. Dkt. No. 12 at 8–11. The core of Sagitec’s argument on this point is that its contract with the Delaware Department of Labor does not constitute an activity purposefully directed at Delaware residents because all the activity relating to the contract took place outside of Delaware.
As the Supreme Court has explained, “even a single act can support jurisdiction,” which
“may not be avoided merely because the defendant did not
physically
enter the forum state.”
Burger King
,
Moreover, the evidence before the court indicates that Sagitec’s dealings with the Delaware Department of Labor in connection with the PUA contract were not the only contacts that Sagitec has had with Delaware regarding the sales of its unemployment insurance software products. In February 2023, as Mr. Peretto noted, Sagitec submitted another proposal to the Delaware Department of Labor to implement a custom-developed unemployment insurance package. See Dkt. No. 15 ¶ 16. That second, and separate, offer to provide services to the Delaware Department of Labor serves as a further indication that Sagitec was engaged in substantial and ongoing activity directed at Delaware entities.
Sagitec contends that its contacts with Delaware are not sufficient to support personal jurisdiction in this district, but the cases Sagitec cites for that proposition do not support its position. First, Sagitec relies on the court’s statement in Katz v. Apuzzo , No. 17-1328, 2019 WL 3219513, at *4 (D. Del. July 17, 2019) (citation omitted), that “contracts negotiated and performed outside of Delaware will not support personal jurisdiction.” The court in that case, however, found that it lacked jurisdiction over one defendant because no part of the plaintiff’s contract with that defendant “related to the provision of services in Delaware.” In this case, Sagitec’s contract with the Delaware Department of Labor relates directly to the provision of the PUA software product to Delaware residents.
Second, Sagitec relies on the Third Circuit’s statement in
Grand Entertainment Group, Ltd.
v. Star Media Sales, Inc.
,
Third, Sagitec relies on the Supreme Court’s decision in
Walden v. Fiore
,
Fourth, Sagitec relies on the Third Circuit’s decision in
BP Chemicals Ltd. v. Formosa
Chemical & Fibre Corp.
, 229 F.3d 254 (3d Cir. 2000). In that case, the court held that a
defendant’s “informational communications in furtherance of [a] contract” were insufficient to
establish personal jurisdiction over the defendant.
Id.
at 261. The plaintiff’s allegations against
the defendant in
BP Chemicals
related to an injury caused in Great Britain due to activities
occurring at a plant in Taiwan.
Id.
The court observed that the defendant’s only contacts with the
United States “were for a one-time purchase of equipment that was to be shipped to Taiwan and
were solicited and negotiated through the Taiwanese agents of the U.S. vendors.” Under those
circumstances, the court declined to find that the defendant had “purposefully avail[ed] itself of
the privilege of conducting activities” within the United States, “thus invoking the benefits and
protections of its laws.” (quoting
Burger King
,
Fifth, a court in the Eastern District of Pennsylvania observed that where courts have
exercised specific jurisdiction over a defendant based on interstate communication, “it is generally
in conjunction with an actual appearance by the non-resident defendant in the forum state and
continuing obligations between the parties.”
Element Fin. Corp. v. ComQi, Inc.
, 52 F. Supp. 3d
739, 747 (E.D. Pa. 2014). Although that may be true as a general proposition, the Supreme Court
has made clear that physical presence in the forum state is not required to support the exercise of
jurisdiction.
Burger King
,
Sixth, Sagitec relies on a case from the Southern District of Indiana,
SMC Corp. of America
v. King Industrial of the Valley, Inc.
, No. 02-0752,
The closest case of those cited by Sagitec is a case from the Eastern District of Wisconsin,
University Accounting Service LLC v. ScholarChip Card LLC
, No. 17-CV-901,
In view of the analysis set forth in the cases discussed above, I find that Sagitec’s
communications with the Delaware Department of Labor and its choice to enter into a contract
with a Delaware state agency to provide software that would be used by Delaware residents
constitute activities that were “purposefully directed” at forum residents, and therefore support a
finding that this court has personal jurisdiction over Sagitec in this matter.
See Burger King
, 471
U.S. at 472. Simply put, this case satisfies the “purposeful availment” requirement of
Burger King
,
because Sagitec’s contacts with Delaware are “the defendant’s own choice” and not “random,
isolated, or fortuitous” contacts,
Ford Motor Co.
,
2. Whether Deloitte’s Claims Arise Out of Sagitec’s Contacts with Delaware
The next question is whether this litigation “arises out of” Sagitec’s contacts with Delaware. See id. Deloitte argues that the Neosurance product that it accuses of infringement in this case is effectively the same product that was sold to the Delaware Department of Labor pursuant to the PUA contract. Dkt. No. 37 at 13–14. Sagitec argues that Deloitte’s claim arose from activities that occurred in Minnesota or India, where the Neosurance software is developed, and that Deloitte’s alleged injuries are felt in New York and not Delaware. Dkt. No. 12 at 12–13.
The problem for Sagitec is that in intellectual property cases, claims are typically treated
as arising out the defendant’s contacts with the forum state if the defendant makes the accused
product available in the forum state.
See, e.g.
,
TriStrata Tech., Inc. v. Emulgen Lab’ys, Inc.
, 537
F. Supp. 2d 635, 641–42 (D. Del. 2008) (court exercised jurisdiction over the defendant because
the defendant “received orders [for the accused products] from and shipped orders to Delaware
residents”);
Rockwell Automation, Inc. v. EU Automation, Inc.
, No. 21-1162,
More generally, the Due Process Clause does not require a “strict causal relationship”
between the plaintiff’s claims and the defendant’s contacts with the forum.
Ford Motor Co.
, 141
S. Ct. at 1026. Instead, there need only be an “affiliation between the forum and the underlying
controversy, principally, [an] activity or an occurrence that takes place in the forum State.” at
1025 (quoting
Bristol-Myers
,
In its opening brief, Sagitec makes the passing suggestion that Neosurance, the product
accused by Deloitte in this case, is distinct from the PUA product that Sagitec developed for the
Delaware Department of Labor.
See
Dkt. No. 12 at 3–4 (asserting that the PUA software “was not
a full unemployment insurance system like Neosurance”). As noted, however, Deloitte has pointed
to evidence suggesting that the PUA software was developed using the Neosurance product at least
as a starting point.
See, e.g.
, Dkt. No. 37-1 at 7; Dkt. No. 37-3; Dkt. No. 37-19. To the extent
there is a factual dispute as to whether the PUA software encompasses the accused portions of the
Neosource software, Deloitte is entitled to have that dispute resolved in its favor for purposes of
the present motion.
See O’Connor
,
In sum, Sagitec negotiated a contract with the Delaware Department of Labor to provide a
version of the software that is alleged in this case to infringe Deloitte’s copyrights and contain
Deloitte’s trade secrets. It was plainly contemplated that the PUA software that Sagitec provided
for the Delaware Department of Labor would be accessed principally by Delaware residents.
Those contacts, taken together, are more than sufficient to satisfy the requirement that Sagitec have
“minimum contacts” with Delaware such that the exercise of jurisdiction would not “offend
‘traditional notions of fair play and substantial justice.’”
See Int’l Shoe
,
B. Motion to Transfer
I now turn to Sagitec’s request, in the alternative, that this case be transferred to the District
of Minnesota. Sagitec has made a sufficient showing that, by virtue of having its headquarters in
Minnesota, Sagitec could have been sued in the District of Minnesota.
See
Dkt. No. 12 at 15. As
a result, I must address the private and public interest factors articulated by the Third Circuit in
Jumara
. The private interest factors include (1) the plaintiff’s choice of forum; (2) the defendant’s
preferred forum; (3) where the claim arose; (4) the convenience of the parties; (5) the convenience
of the witnesses, to the extent they may be unavailable for trial in one of the forums; and (6) the
location of books and records, to the extent they could not be produced in the alternative forum.
Jumara
,
1. Private Interest Factors
i. Plaintiffs’ Choice of Forum
The first private interest factor is the plaintiff’s choice of forum. A plaintiff’s choice to
sue in a particular jurisdiction is a “paramount consideration” in the section 1404(a) analysis, and
thus it weighs “strongly” in the plaintiff’s favor, particularly if the plaintiff elects to sue in its home
jurisdiction.
NXP USA, Inc. v. IMPINJ, Inc.
, No. 19-1875,
ii. Defendant’s Preferred Forum
The second private interest factor is the defendant’s preferred forum. Sagitec represents
that it would prefer to litigate this case in the District of Minnesota. Dkt. No. 12 at 16–17. This
factor therefore favors transfer.
Mitel Networks Corp. v. Facebook, Inc.
,
iii. Where the Claim Arose
The third private interest factor is where the plaintiffs’ claim arose. In analyzing this factor,
courts typically focus on “where the corporate decisions underlying th[e] claims were made.”
United States v. United States Sugar Corp.
, No. 21-1644,
It is undisputed that Sagitec directed the activities relating to its Neosurance software from its headquarters in Minnesota, and that it conducted much of the design, development, sales, and marketing activities related to the product there. Those factors, standing alone, would generally weigh in favor of transferring this case to Minnesota.
However, it is also clear, as discussed in more detail above, that Deloitte’s claims of
copyright infringement and trade secret misappropriation arose in part out of Sagitec’s sale of the
PUA software to the Delaware Department of Labor. In an analogous case, Judge Noreika found
this factor to be neutral when all the design, development, and marketing activities related to the
accused products occurred outside of Delaware, but the defendant sold and advertised the accused
products to Delaware customers.
P Tech, LLC v. Arthrex, Inc.
, No. 21-968,
iv. Convenience of the Parties
The fourth private interest factor is the convenience of the parties. In assessing that factor,
the court must consider (1) the parties’ physical locations; (2) “the associated logistical and
operational costs to the parties’ employees in traveling to Delaware (as opposed to the proposed
transferee district) for litigation purposes”; and (3) “the relative ability of each party to bear these
costs in light of its size and financial wherewithal.”
ANI Pharms., Inc. v. Method Pharms., LLC
,
No. 17-1097,
Sagitec argues that the District of Minnesota is a more convenient forum for it because its principal place of business is in Saint Paul, Minnesota, and it would incur “significantly more costs from employees traveling to Delaware than it would” if the case were litigated in Minnesota. Dkt. No. 12 at 17–18. Sagitec adds that “[s]ome potential Deloitte witnesses may also be located in Minnesota, as Deloitte’s government practice group that markets its uFACTS software is also located in Minnesota.” at 18 (citing Dkt. No. 16-1, Exhs. 1–2). Sagitec further asserts that because “Deloitte is far larger—and wealthier—than Sagitec,” this factor weighs in favor of transfer.
I agree with Sagitec that travel considerations regarding its Minnesota-based witnesses are significant and cut in favor of transferring this case to the District of Minnesota. I am less persuaded that the presence of some Deloitte employees in Minnesota weighs substantially in favor of transfer, because it would appear that at least some of Deloitte’s employees will need to travel from New York regardless of whether the case is transferred. [4] See MEC Resources , 269 F. Supp. 3d at 226 (observing that the plaintiff’s litigation costs “will likely remain the same because its two employees must travel” regardless of which venue is chosen). And the convenience to any Minnesota-based Deloitte witnesses is largely offset by the fact that any witnesses based in New York would incur a greater burden in traveling to Minnesota than in traveling to Delaware.
As to the parties’ resources, it is true that Deloitte is a large company with substantial revenues and with employees and offices worldwide. But the same is true of Sagitec, albeit to a lesser degree. Sagitec describes itself as a “global technology solutions company”; it has operations in multiple countries; and it has annual revenues exceeding $90 million. Dkt. No. 15 ¶ 1; Dkt. No. 37-33 at SAG-JUR-003132. Although Deloitte is much larger than Sagitec, it is clear that both parties are more than capable of bearing the costs associated with traveling to Delaware, as opposed to Minnesota, for this litigation.
In sum, the fact that many of Sagitec’s employee witnesses are likely to be in Minnesota weighs in favor of transfer. The other considerations raised by Sagitec are largely neutral. Accordingly, this factor weighs somewhat in favor of transfer.
v. Convenience of the Witnesses The fifth private interest factor is the convenience of the witnesses, particularly if some of the witnesses would be unavailable for trial in one of the districts. Neither party has identified any relevant third-party witnesses, so the parties agree that this factor is neutral. Dkt. No. 12 at 18; Dkt. No. 37 at 19.
vi. Location of Books and Records
The sixth private interest factor is the location of books and records, to the extent that they
could not be produced in the alternative forum. Although it would appear to be true that a large
amount of relevant documentary evidence is located in the District of Minnesota, neither party has
shown that there is any likelihood that such evidence could not be produced in either Delaware or
Minnesota.
[5]
See Jumara
,
2. Public Interest Factors
i. Enforceability of the Judgment The first public interest factor is the enforceability of the judgment. The parties agree that any judgment entered in this case would be equally enforceable regardless of which forum is chosen. Dkt. No. 12 at 20; Dkt. No. 37 at 20. Accordingly, this factor is neutral.
ii. Practical Considerations
The second public interest factor relates to practical considerations that could make the
trial easy, expeditious, or inexpensive. Courts in this district have treated this factor as neutral
when the parties’ contentions regarding this factor “have been raised, in some way, as to other
Jumara
factors,” so as to avoid “double-counting” those considerations.
See, e.g.
,
Wiremed Tech
LLC v. Adobe Inc.
, No. 18-1066,
iii. Court Congestion
The third public interest factor is the relative court congestion in the two districts. Sagitec
does not contend that this factor weighs in favor of transfer, and the evidence cited by Sagitec
indicates that the number of civil filings per judge is largely similar in the two forums. Dkt. No.
16-1, Exh. 4 (426 filings per judge in Delaware; 458 filings per judge in Minnesota). Although
the weighted filings per judge are greater in Delaware than in Minnesota, that factor is offset by
the fact that this case has been assigned to a visiting judge with a smaller district court docket than
the active judges in the District of Delaware.
See Trover Grp., Inc. v. Tyco Int’l, Ltd.
, No. 2:13-
CV-52,
iv. Local Interest
The fourth public interest factor is the local interest in deciding local controversies at home.
The District of Minnesota has a local interest in this case because Sagitec has its headquarters in
that district.
Harris
,
v. Public Policies
The fifth public interest factor relates to the public policies of the respective districts. It is
generally accepted that “Delaware’s public policy encourages Delaware corporations to resolve
their disputes in Delaware courts.”
Williamsburg Furniture, Inc. v. Lippert Components, Inc.
, No.
19-1993,
vi. Familiarity with State Law The sixth public interest factor is the familiarity of the trial judge with the applicable state law in diversity cases. The parties agree that this factor is neutral as applied to this case. Dkt. No.
12 at 20; Dkt. No. 37 at 20.
3. Balancing the Factors Of the private interest factors, one weighs against transfer, one weighs in favor of transfer, one weighs somewhat in favor of transfer, and three are neutral. Of the public interest factors, one weighs slightly against transfer and the other five are neutral. Balancing all the factors, I find that the factors as a whole do not strongly favor transfer. I therefore conclude that Sagitec has failed to satisfy the standard for obtaining a transfer under section 1404(a). Accordingly, Sagitec’s motion for transfer is denied.
IT IS SO ORDERED.
SIGNED this 15th day of September, 2023.
______________________________ WILLIAM C. BRYSON UNITED STATES CIRCUIT JUDGE
Notes
[1] Sagitec argues, correctly, that its consent to the application of Delaware law and the jurisdiction of Delaware courts is limited to disputes arising from the contract. However, Sagitec’s willingness to subject itself to Delaware law and the jurisdiction of Delaware courts in connection with the contract provides support for the conclusion that Sagitec did not contemplate that its contacts with Delaware in connection with its contractual relationship with the Delaware Department of Labor were random or incidental.
[2] Sagitec’s characterization of its contacts with Delaware as consisting of only “the submission of a single proposal” (Dkt. No. 42 at 6) overlooks the fact that the proposal gave rise to a contractual relationship to provide services to the Delaware Department of Labor for the benefit of Delaware citizens. That relationship cannot fairly be characterized as limited to the “submission of a single proposal.”
[3] In
Take2 Technologies Ltd. v. Pacific Biosciences of California
, No. 22-1595, 2023 WL
4930359 (D. Del. Aug. 2, 2023), I found this factor to weigh in favor of transfer. In that case, the
defendants’ accused systems were developed and marketed entirely in California, but the plaintiffs
focused on the fact that one of the defendant’s customers in Delaware likely used the accused
functionality. at *5. With respect to where the claim arose, the
Take2
case is distinguishable
for two reasons. First, it was not clear that the customer in Delaware was actually using the accused
functionality.
See id.
at *8 n.7. Second, the defendant in that case had 19 other customers who
were “in a similar posture” as the Delaware customer with respect to the infringement allegations,
and the defendant had many other customers throughout the United States, including in the
proposed transferee district. at *6 & n.4. In this case, Sagitec is alleged to have sold the
accused Neosource product in eight states, including Delaware but, importantly, not Minnesota,
Dkt. No. 1 ¶ 50. Thus, it is not the case, as it was in
Take2
, that the nationwide sales of the accused
technology “significantly undercuts the suggestion that the plaintiffs’ infringement claims arose
primarily or even substantially in Delaware.”
[4] Notably, Sagitec has not shown how many relevant Deloitte witnesses are in Minnesota. Sagitec’s showing on this point is limited to evidence that a single Deloitte employee, Scott Malm, maintains an office in Minneapolis, Minnesota. Dkt. No. 16-1, Exhs. 1–2. Sagitec has not asserted that Mr. Malm is likely to be called at trial, nor has it shown whether any other relevant Deloitte employees may be located in Minneapolis.
[5] Sagitec asserts in its opening brief that “if Sagitec’s source code is produced, it would occur at Sagitec’s counsel’s office in Minnesota to minimize transport risk.” Dkt. No. 12 at 19. Although Sagitec might prefer for any source code review to take place in Minnesota, that assertion does not amount to a contention that the source code could not be produced in Delaware. For example, Sagitec has not explained why the source code could not readily be produced at the offices of its Delaware counsel.