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PTP OneClick LLC v. Avalara, Inc.

United States District Court, W.D. Washington

April 30, 2019

AVALARA, INC., Defendant.


          William C. Griesbach, Chief Judge United States District Court.

         Plaintiff PTP OneClick, LLC, a Delaware limited liability company with its principal place of business in Buffalo Grove, Illinois, filed this action on October 22, 2018, against Avalara, Inc., a Washington corporation with its principal place of business in Seattle, Washington, alleging patent infringement, misappropriation of trade secrets under both federal and Wisconsin law, unfair competition under Wisconsin law related to tax software, as well as breach of contract for violating the terms of a confidentiality agreement. In lieu of an answer, Avalara filed the two motions that are presently before the court: a motion to dismiss PTP OneClick's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), and a motion to transfer the case to the Western District of Washington pursuant to 28 U.S.C. § 1404(a). The court has jurisdiction over the patent infringement claims under 28 U.S.C. §§ 1331 and 1338(a) and the federal trade secret misappropriation claim under 18 U.S.C. § 1836(c), as well as supplemental jurisdiction over the state law claims under 28 U.S.C. § 1367. The court also has jurisdiction under 28 U.S.C. § 1332. For the following reasons, Avalara's motion to transfer will be granted, and the court will reserve resolution of the motion to dismiss for the transferee court.


         In 2006, Pavlos Pavlou founded the company that is now called PTP OneClick, LLC, two of whose members reside in Wisconsin. Pavlou, a certified public accountant and tax professional, developed software that automatically calculates various corporate taxes at the state, county, and municipal level based on location and type of sale, and automatically generates and files the relevant tax documents. In February of 2006, Pavlou filed for patent protection for his invention, which the Patent and Trademark Office granted in 2017 when it issued U.S. Patent No. 9, 760, 915. PTP OneClick owns and markets Pavlou's tax solution, known as Pavlou SalesTaxPRO.

         In 2011, Avalara expressed interest in PTP OneClick's tax solution. Avalara, whose headquarters are located in Seattle, Washington, sells tax calculation and preparation products and, according to the complaint, Avalara's tax products did not have the same functionality as PTP OneClick's at this time. The parties arranged to meet at Avalara's Washington office on August 2, 2011. Prior to this meeting, the parties executed a confidentiality agreement that, among other things, required Avalara to keep confidential any details disclosed during both the meeting and any subsequent discussion regarding a potential transaction.

         At the meeting, Pavlou met with Avalara senior executives and demonstrated the functionality of his product. Impressed with the product, Avalara brought in more employees, either in person or remotely, to view further demonstrations of the product and ask questions. Pavlou explained his methodology utilizing a white board and Avalara employees continued to ask questions and took notes. Following the conclusion of the meeting, Avalara executives requested an unlocked fully functional version of Pavlou SalesTaxPRO, which Pavlou provided the next day. There were further negotiations and exchanges of information between the parties until April of 2012 when Avalara informed PTP OneClick that it was no longer interested in a business deal.

         PTP OneClick alleges that after the 2011 meeting, Avalara released a series of updates to some of its tax products-AvaTax, Avalara Returns, and Avalara TrustFile-that introduced capabilities that Avalara's tax products previously did not possess that were identical or near identical to the capabilities of Pavlou SalesTaxPRO. The majority of the Avalara employees who are responsible for the development, design, and commercialization of these products work at Avalara's Seattle headquarters where the meeting took place.

         In 2014, Avalara opened an office in Green Bay after its acquisition of the Zytax line of energy excise tax-related products. The focus of the work that is done in Avalara's Green Bay office is focused on this energy excise tax-product.


         “For 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 or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). Transfer is proper when “(1) venue is proper in the transferor district; (2) venue and jurisdiction are proper in the transferee district; and (3) the transfer will serve the convenience of the parties, the convenience of the witnesses, and the interests of justice.” Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986). “[T]he party seeking a Section 1404(a) transfer bears the burden of showing that ‘the transferee forum is clearly more convenient' than the transferor forum.” Vandeveld v. Christoph, 877 F.Supp. 1160, 1167 (N.D. Ill. 1995) (quoting Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1290 (7th Cir. 1989)). A ruling on a motion to transfer venue “requires an ‘individualized, case-by-case consideration of convenience and fairness, '” and “the district court is afforded broad discretion and substantial deference in weighing the factors for and against transfer.” Bull v. Ill. Union Ins. Co., No. 16 C 11446, 2017 WL 3234374, at *2 (N.D. Ill. July 31, 2017) (quoting Coffey, 796 F.2d at 219).


         Transfer pursuant to § 1404(a) is appropriate only when the transferee forum is one where the action “might have been brought.” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). Here, the parties are in agreement that venue is also appropriate in the Western District of Washington.

         A. Convenience of Parties and Witnesses

          In assessing the convenience of the parties, a court considers four factors: (1) the plaintiff's choice of forum; (2) the situs of the material events; (3) the relative ease of access to sources of proof; and (4) the convenience of the parties and witnesses. Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d 973, 978 (7th Cir. 2010); Rosen v. Spirit Airlines, Inc., 152 F.Supp.3d 1055, 1059 (N.D. Ill. June 17, 2015). “[T]ransfer is inappropriate if it will ‘merely transform an inconvenience for one party into an ...

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