Intellectual Property – Venue – Coffee Shop Franchise – Trademark Infringement

A Charlottesville U.S. District Court transfers to the Alexandria U.S. District Court this suit by plaintiff Delaware corporation alleging that defendants, who live and have their business in Northern Virginia, have infringed plaintiff’s trademark for Greenberry coffee shops with defendants’ business in Leesburg.

At the center of this controversy is the Leesburg Franchise, a coffee shop located in the Eastern District of Virginia. Each of the claims pertain to the alleged wrongful transfer of the Leesburg Franchise within the Eastern District and the access to and use of the proprietary system and marks in the Eastern District. The following allegations of wrongful conduct all occurred in the Eastern District: breach of contract, tortious interference with contract and business relations and expectancy, conspiracy, conversion of assets, computer fraud or trespass and infringement of trademark.

Plaintiff certainly does not meet the burden of alleging that a substantial part of the events giving rise to the breach of contract claim occurred in the Western District. The fact that the proprietary system, confidential information and trademarks that were allegedly misappropriated in the Eastern District were “created and developed” in the Western District at some point in the past for general use in franchising the Greenberry’s system, without more, is too remote of an event to render venue proper. This is not a case where the proprietary system and materials were developed specifically for use by defendants in this particular contractual relationship.

Although venue is not proper in the Western District for counts two through 10, count one states a claim for breach of contract of the franchise agreement and the transfer agreement. The transfer agreement contains a forum selection clause that designated a court of competent jurisdiction within the City of Charlottesville or County of Albemarle, Virginia, as the exclusive forum for litigation arising from the transfer agreement. The Western District is such a court but the Eastern District is not. Only Alice Park is a party to the transfer agreement and a defendant to the contract claim. This claim comprises only one paragraph of one count of the 10-count complaint and pertains to only one of five defendants. Severing that claim would raise problems of subject matter jurisdiction for this court. The claim concerns the same series of events and factual determinations as those in the breach of the franchise agreement claim, and trying it separately would entail duplication of judicial and party resources.

I find that considerations of convenience, efficiency and justice favor hearing the breach of the transfer agreement claim with the other claims in the Eastern District, and will transfer it to the Eastern District pursuant to 28 U.S.C. Sec. 1401(a).

I will grant the motion to change venue.

Greenberry’s Franchising Corp. v. Park (Moon, J.) No. 3:10cv00045, Dec. 10, 2010; USDC at Charlottesville, Va. VLW 010-3-658, 9 pp.