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Comrent International, LLC v. Palatini

United States District Court, Third Circuit

October 24, 2013

COMRENT INTERNATIONAL, LLC and EXPERIUM TECHNOLOGIES, LLC, Plaintiffs,
v.
LANCE PALATINI, Defendant.

MEMORANDUM

LAWRENCE STENGEL, Judge.

Plaintiffs ComRent International, LLC and Experium Technologies, LLC brought suit against defendant Lance Palatini under federal and state law for trademark infringement, misappropriation of trade secrets, and conversion of corporate assets.[1] The plaintiffs frame this dispute as being between an employer and "a disgruntled former employee who has stolen intellectual property." The defendant describes it as a dispute between Experium's shareholders. The defendant moved for dismissal for improper venue or, alternatively, transfer of venue. For the reasons set forth below, I will grant this motion and transfer the action to the Eastern District of Virginia.

I. BACKGROUND[2]

Experium is a Virginia limited liability corporation, which specializes in innovative and dynamic methods for load bank testing for a variety of industries.[3] In 2009, the defendant and Clayton Taylor co-founded Experium as its sole members and owners.[4] Taylor, a resident of Maryland, owned eighty percent (80%) of Experium; the defendant, a resident of New Jersey, owned twenty percent (20%). On December 29, 2012, Taylor and the defendant entered a Second Amended and Restated Operating Agreement for Experium which reiterated their respective roles as the sole two members of Experium, their ownership interests, and Taylor's role as managing member.[5] The agreement clearly indicates that the laws of Virginia should govern the operations of Experium.[6]

At some point after December 29, 2012, Taylor transferred his ownership interests in Experium to plaintiff ComRent, making it the eighty percent (80%) owner and Managing Member of Experium.[7] The defendant objected to the appointment of ComRent as Managing Member, claiming it was inconsistent with the Operating Agreement.[8]

ComRent is a Maryland limited liability company with a principal place of business in Upper Marlboro, Maryland.[9] It is a leading provider of load bank rentals and service, with business throughout North America and abroad. In October 2009, ComRent hired the defendant to serve as a vice president of product development.[10] As part of his employment, the defendant signed a Confidentiality and Office Privacy policy requiring his non-disclosure and proper use of ComRent's proprietary information.[11] A violation of this policy could result in termination.

The plaintiffs assert that the defendant primarily worked on matters related to Experium while employed by ComRent. The relationship between ComRent and Experium at the time the defendant was hired, however, is unclear.[12] The plaintiffs describe Experium as a "ComRent-related entity, " but it does not appear that ComRent had any sort of control over Experium's assets on or before Taylor transferred his control.

As part of his employment, the defendant established an Internet location to store, access, and edit all of Experium's intellectual property and confidential commercial information through use of "Google Drive, " an online storage service.[13] He had exclusive knowledge of the username and password to access this online storage site. The plaintiffs contend that the defendant also stored information on other Internet-based storage sites and on other electronic devices aside from Google Drive.

In June 2013, ComRent hired Red Wolf Engineering as a consultant to review Experium's intellectual property "for the purpose of assisting ComRent in analyzing options for the future of Experium."[14] The defendant refused to allow Red Wolf any access to Experium's intellectual property, believing that ComRent might divest Experium of its intellectual property.[15] As a result, he was fired from ComRent on September 11, 2013. Thereafter, the plaintiffs requested that the defendant turn over all of Experium's intellectual property and confidential information. He refused.

ComRent and Experium filed suit shortly thereafter. They claim that the defendant: 1) stole the username and password needed to access Experium's corporate files, 2) is infringing upon Experium's trademark, and 3) is exercising unauthorized dominion and control over Experium's other intellectual property and confidential commercial information, including its Internet homepage, customer invoices, and equipment information.[16] Because it cannot gain access to this information, the plaintiffs claim that Experium has approximately $700, 000 in pending orders frozen.

II. DISCUSSION

The defendant moved to either dismiss the claim under Federal Rule of Civil Procedure 12(b)(3) for improper venue or, in the alternative, remove the suit to the Eastern District of Virginia under 28 U.S.C. ยง1404(a), or the doctrine of forum non conveniens. I will first discuss whether venue in this district is appropriate and then turn to the issue of forum transfer.

A. Dismissal Under Rule 12(b)(3)

Venue must generally be established for each cause of action in a plaintiff's complaint. Kravitz v. Inst. for Int'l Research, Civ. A. No. 92-5045 , 1993 WL 453457, at *3 (E.D. Pa. Nov. 5, ...


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