Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

Heathcote Holdings Corp. v. L'Oreal USA, Inc., No. 11 C 1921, Slip Op. (N.D. Ill. Aug. 9, 2011) (Lefkow, J.).

Judge Lefkow granted defendant L'Oreal's motion to transfer plaintiff's false patent marking case involving boxes of hair dye to the S.D. New York, L'Oreal's home district. Generally, plaintiff's Heathcote's choice of forum would be given deference, but in false marking cases the United States is the real party in interest. So, the qui tam plaintiff's chosen forum is given little deference. The situs of material events was New York, where the accused packaging was designed and where the relevant employees reside. L'Oreal's witnesses and documents were more likely in New York than Illinois.

The convenience of the parties also weighed in favor of New York. Heathcote did not identify any employees that would have to travel to New York for the case, whereas L'Oreal's relevant employees were in New York. Furthermore, Heathcote's only business was litigation and therefore the travel would not distract Heathcote from its business.

The interests of justice weighed in favor of transfer. There were already four false marking cases against L'Oreal or its subsidiaries that had been transferred to the S.D. New York. And the potential consolidation of those cases would benefit the parties and judicial economy.
 

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Rude d/b/a ABT Sys., LLC v. Lux Prods. Corp., No. 09 C 6957, Slip Op. (N.D. Ill. Jan. 12, 2011) (Norgle, J.).

Judge Norgle granted defendant Emerson Climate Technologies' ("ECT") motion to sever plaintiffs' claims against ECT for improper joinder, and granted ECT's motion to transfer the case to the Eastern District of Missouri in this patent dispute regarding an air distribution fan recycling control. ECT sought dismissal because each defendant's accused system, generally a thermostat, was a different product and, therefore, there was no common transaction or occurrence as required for Fed. R. Civ. P. 20 joinder. The Court agreed, holding that sales of similar products by unrelated defendants did not meet Rule 20(a)'s common transaction or occurrence requirement, noting agreement from several other judges in the Northern District. Furthermore, allegations that unrelated defendants design and sell similar products does not satisfy Rule 20(a). Similarly, the fact that the defendants' defenses and counterclaims were "nearly identical" was irrelevant to the joinder analysis. Having held that ECT was misjoined, the Court declined to consolidate the two cases for pretrial proceedings pursuant to Fed. R. Civ. P. 42(a). And the Court severed ECT's case pursuant to Fed. R. Civ. P. 21.

The Court then transferred the severed case to the Eastern District of Missouri, where ECT was located. Plaintiffs' choice of forum was given less than normal deference because plaintiffs were not Illinois residents. The situs of material events was irrelevant, as in many patent cases.

The ease of access to the proofs weighed strongly in favor of transfer. ECT's relevant entities were headquartered in St. Louis, within the Eastern District of Missouri. ECT identified at least five key party witnesses within the Eastern District of Missouri. And that district could more easily compel non-party witnesses also likely to be resident in St. Louis. Additionally, while ECT would gain significant convenience from transfer, plaintiffs would be inconvenienced either way, as they were not residents of either contemplated district. So, relative convenience of the parties weighed in favor of transfer. And the speed of the districts to trial slightly favored transfer.
 

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ThermaPure, Inc. v. Temp-Air, Inc., No. 10 C 4724, Slip Op. (N.D. Ill. Dec. 22, 2010) (Lefkow, J.).

Judge Lefkow granted defendants' RxHeat and Cambridge Engineering's (collectively "Cambridge") motion to dismiss or sever and Temp-Air's motion to sever and transfer in this patent litigation involving the use of heat to remediate structures removing mold, bacteria, insects or rodents, among other things. Neither Cambridge nor Temp-Air were related to any of the other defendants. As such, their sales of different products could not satisfy the Fed. R. Civ. P. 20(a) joinder requirement that the claims arise out of the same transaction or occurrence. It was not enough that plaintiff accused that each defendant infringed the same patent. Furthermore, plaintiff never identified which specific products it accused of infringement, even during briefing of the instant motion. So, there was no way for the Court to determine how similar the accused products actually were. The Court, therefore severed Cambridge's and Temp-Air's cases.

The Court then transferred Temp-Air's case. ThermaPure's choice of forum was given little deference because it was neither party's home district. The situs of material events was Minnesota, where ThermaPure is headquartered and conducts most of its business. The fact that ThermaPure sold accused products to Illinois customers was unavailing. Additionally, most of the documents were located in Minnesota. Temp-Air only identified party witnesses, which are given less consideration, that were located in Minnesota. But ThermaPure did not identify any Illinois witnesses.

Neither party argued that either district would resolve the claims faster, and ThermaPure's citation to the Northern District's Local Patent Rules for reducing costs and expenses of the litigation was not relevant. The Court, therefore, transferred Temp-Air's case to Minnesota. And having transferred the case as to Temp-Air, the Court stayed ThermaPure's case against Temp-Air's alleged Illinois customer Gierstsen Illinois. That case could be reopened, as necessary, in the Northern District after Temp-Air's case was resolved, as it should significantly narrow, if not resolve, the claims against Gierstsen Illinois.
 

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Simonian v. Monster Cable Prods., No. 10 C 1269, Slip Op. (N.D. Ill. Nov. 22, 2010) (Bucklo, J.).

Judge Bucklo granted defendant Monster Cable Products' ("Monster") § 1404 motion to transfer this false patent marking case. Citing the Court's decision transferring another of plaintiff Simonian's false marking cases to Iowa in Simonian v. Pella. As in Pella, the qui tam plaintiff's chosen forum was given little deference. And California was the situs of the events because that is where Monster designed the packaging at issue and made the alleged marking decisions. Also, all of Monster's witnesses were located in California. The Court, therefore, transferred the case to the Northern District of California.

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Zojo Sol'ns., Inc. v. Leviton Mfg. Co., No. 10 C 881, Slip Op. (N.D. Ill. Oct. 20, 2010) (Grady, Sen. J.).

Judge Grady granted defendant Leviton's 28 U.S.C. § 1404(a) motion to transfer this false patent marking case to the Eastern District of New York. Plaintiff Zojo's choice of forum was given little deference because Zojo was a qui tam plaintiff. The location of Leviton's witnesses and documents in New York combined with the fact that Leviton's New York headquarters was the situs for the alleged false marking, favored transfer. That was true even though the Eastern District of New York was a slightly faster court. The most interesting aspect of the decision, however, was a statement that the Local Patent Rules did not apply to false patent marking cases because patent infringement was not alleged. Presumably, the analysis is different if the alleged false marking involves a marked product that allegedly does not fall within the claims of the marked patent.

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Simonian v. Pella Corp., No. 10 C 1253, Slip Op. (N.D. Ill. Aug. 5, 2010) (Bucklo, J.)

Judge Bucklo granted defendant Pella's 28 U.S.C. § 1404(a) motion to transfer plaintiff Simonian's false patent marking case to the Southern District of Iowa. The court held that Simonian's choice of forum was not given deference, as it normally would be. First, the real plaintiff was the United States, not Simonian. Second, the situs of the material events was Iowa where Pella made its marking and packaging decisions, not Illinois where some marked products were sold. Simonian's numerous other false marking cases filed in the district did not weigh against transfer. Each of those cases involved different defendants, different accused products and different allegedly expired patents.
 

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MPH Techs. Oy v. Zyxel Coms. Corp., No. 10 C 684, Slip Op. (N.D. Ill. Jul. 16, 2010) (Darrah, J.).

Judge Darrah granted defendants' 28 U.S.C. § 1404(a) motion to transfer this patent case to the Northern District of California. Venue was proper in both districts. Plaintiff's choice of forum was only given slight weight because the Northern District of Illinois was not plaintiff's home forum and had only a weak connection to the case. The convenience of witnesses weighted in favor of transfer. All of defendants' employee witnesses were in the Northern District of California and, more importantly, half of the non-party witnesses were in the Northern District of California. Three of plaintiff's four witnesses were in its home country – Finland. Access to proofs is given little deference in light of wide-spread use of digital discovery, but still leaned slightly in favor of transfer because defendants' documents were largely in California.

The situs of material events was neutral because it is largely irrelevant in patent cases. The convenience of parties weighed in favor of transfer. Plaintiff's inconvenience in traveling from Finland to Chicago or to Northern California was not significantly different.

The interests of justice weighed slightly in favor of transfer because defendants' employees had a greater interest in the case than Illinois citizens did. Otherwise, the Courts were similarly capable of handling patent cases and had comparable times to resolution, with only a few months difference in each category.

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Kolcraft Enter., Inc. v. Chicco USA, Inc., No. 09 C 339, Slip Op. (N.D. Ill. Oct. 23, 2009) (Norgle, J.)

Judge Norgle denied defendant Chicco's § 1404(a) motion to transfer this patent case to the Eastern District of Pennsylvania, where Chicco's principle place of business is located. Neither court was more suited for the case in terms of speed or familiarity with the law. The Court also noted that the location of documents was neutral based upon electronic document exchange. The convenience of the parties was also neutral because one party would be inconvenienced by the decision either way. Additionally, the situs of material events was irrelevant as in most patent cases because the comparison of an accused product to a claim does not revolve around any location. 

As to non-party witnesses, one inventor was within the Northern District and the other was outside the subpoena power of both districts. And patent prosecution counsel also resided within the Northern District. Additionally, plaintiff agreed to depose all U.S. parties in their home districts, further diminishing that factor. Finally, the Court held that plaintiff's choice of forum deserved significant weight. The Court, therefore, denied Chicco's motion to transfer. 

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Bajer Design & Marketing, Inc. v. Whitney Design,, Inc., No. 09 C 1815, Slip Op. (N.D. Ill. Jun. 26, 2009) (Zagel, J.).

Judge Zagel denied defendant Whitney Design's ("Whitney") Section 1404(a) motion to transfer plaintiff Bajer Design & Marketing's ("Bajer") patent infringement case to the Eastern District of Missouri, where Whitney filed a declaratory judgment case after being served with Bajer's complaint.  Although Bajer was not a Chicago-based company, its choice of forum still deserved significant deference because the alleged injury occurred in Chicago.  Bajer filed the complaint after identifying the accused infringement at the International Housewares Show in Chicago.  Whitney argued that the accused infringement occurred in the St. Louis area where Whitney researched and designed the accused clothes hampers.  But the Court held that the point of sale, Chicago, was the situs of the injury.  

Whitney also argued that convenience of the parties weighed in favor of transfer because all of its documents and people were in the St. Louis area.  But the Court held convenience weighed against transfer because the parties could transfer documents electronically and, in any event, the documents would have to be sent to the parties' counsel across the midwest.  And the convenience of third parties also weighed against transfer.  The only third party, the inventor, lived in Iowa almost equidistant from Chicago and St. Louis.

Finally, the interests of justice did not weigh in favor of transfer.  Whitney argued that time to trial in the Eastern District of Missouri was significantly faster than in the Northern District of Illinois.  But the Court held that those statistics were irrelevant because they were for all cases, not split up by case types. 

The Court denied Bajer's preliminary injunction motion seeking to enjoin the Eastern District of Missouri case.  Because that court stayed its case pending the Northern District of Illinois's decision on the transfer motion, there was no need to enjoin a stayed case.

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BorgWarner, Inc. v. Hilite Int’l., Inc., No. 07 C 3339, 2008 WL 3849908 (N.D. Ill. Aug. 14, 2008) (Zagel, J.)

Judge Zagel denied defendant Hilite’s 23 U.S.C. §1404(a) motion to transfer. Plaintiff BorgWarner filed this patent infringement suit over variable camshaft timing (“VCT”) in June 2007. Hilite answered and counterclaimed in March 2008. Five days after answering, Hilite filed a suit in the District of Delaware alleging that BorgWarner infringed Hilite’s VCT patent. Hilite reasoned that its VCT case was related to a prior Delaware patent case filed by BorgWarner on the patent currently at issue in the Northern District, and, therefore, by the transitive property this suit and BorgWarner’s closed Delaware case were related.

While the Seventh Circuit does not strictly follow the first-to-file rule, its use was warranted in this case. BorgWarner’s choice of forum deserved some deference. And the Northern District, while equivalent to Delaware in terms of time to trial, was significantly faster for average disposition without court actions – 6.2 months in the Northern District to 12.5 months in Delaware. Convenience factors were neutral, and therefore weighed in favor of keeping the case in the Northern District.

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Hope Family Vineyards Pty, Ltd., v. Hope Wine, LLC, No. 08 C 3246, Slip Op. (N.D. Ill. Jul. 11, 2008) (Lindberg, J.).

Judge Lindberg granted defendant’s §1404(a) motion to transfer to the Central District of California. Plaintiff was an Australian entity with its principal place of business in Australia. Its only direct connection to the Northern District was that its exclusive U.S. distributor was headquartered in Illinois. The distributor, however, was not a party to the suit. The Court therefore, gave plaintiff’s choice of forum minimal deference.

Defendant was a California entity with its principal place of business in the Central District of California. While defendant sold its wine on the internet, 90% of its sales were in California, and only 5% over the internet. Of that 5%, only four sales were to Illinois, including one to plaintiff’s distributor. Based on these facts, the alleged harm and confusion occurred in California, not Illinois.

Finally, transfer would increase the ease of access to the evidence because defendant, its documents and witnesses were all in California, and plaintiff would have to travel from Australia regardless of which district court heard the case.

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Judge Conlon denied defendants' (collectively “Wound Care Plus”) motion to dismiss plaintiff Wound Care Education Institute's (“WCEI”) trademark and copyright infringement case for lack of personal jurisdiction, improper venue and forum non conveniens. WCEI provided wound treatment education to health professionals across the country using copyrighted materials, and is largely based in the Northern District. It alleged that Wound Care Plus attended three of its seminars and then began running competing seminars, including at least one in Chicago, using course materials that were substantially similar to or exact copies of WCEI's copyrighted course materials. Wound Care Plus also operated a website which allowed its customers to register online for the Wound Care Plus seminars.

Personal Jurisdiction

The Court held that it had specific personal jurisdiction over Wound Care Plus, a New York resident, because it advertised its Chicago seminars in national publications seeking to register Illinois customers. Additionally, Wound Care Plus's website created jurisdiction because it was an active, commercial website that allowed Wound Care Plus's customers to register for, among others, its Chicago seminar online.

Venue

Venue was proper in the Northern District, despite the fact that Wound Care Plus did not reside in Illinois because a substantial part of the events giving rise to WCEI's claims, the Chicago seminars, occurred within the Northern District.

Forum Non Conveniens

The Court noted that the motion should have been brought pursuant to 28 U.S.C. Section 1404(a), instead of the common law forum non conveniens.  Forum non conveniens was inapplicable to this case because the alternate forum was not abroad or a state court. 

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Palantir.net, Inc. v. Palantir Techs., Inc., No. 07 C 4271, Min. Order (N.D. Ill. Nov. 27, 2007) (Guzman, J.).*

Judge Guzman granted defendant's motion to transfer this Lanham Act case to the Northern District of California ("N.D. Cal.") pursuant to 28 U.S.C. Section 1404(a).  Defendant's principal place of business was in the N.D. Cal. and defendant had an earlier-filed case against plaintiff pending in the N.D. Cal.  The Court, therefore, held that the convenience of the parties and the witnesses, as well as the interests of justice, were best served by transferring the case to the N.D. Cal.

*  Click here for a copy of the case.

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Jewel Am., Inc. v. Combine Int’l., Inc., No. 07 C 3596, 2007 WL 4300589 (N.D. Ill. Nov. 30, 2007) (Guzman, J.).

Judge Guzman denied defendants’ 28 U.S.C. § 1404(a) motion to transfer this copyright case to the Eastern District of Michigan. Plaintiff argued that its choice of forum should be given deference because its relevant subsidiary was an Illinois entity with its place of business and all of its operations in Illinois. But the Court looked to the residence of the named plaintiff, not the plaintiff’s subsidiary. Because the named plaintiff was a New York entity, plaintiff’s chosen forum was not given deference. Further, the situs of material events was Michigan. Defendants were Michigan entities and the alleged infringement and related planning occurred in Michigan. The Court discounted the location of documents because, “[i]n this age of faxing, scanning and overnight courier services, however, the location of documentary evidence is largely irrelevant.”

No party identified a third party witness that would be required to testify. And convenience of the parties tipped slightly to plaintiff whose subsidiary’s business would be disrupted if its main employees and key witnesses had to travel from Illinois to Michigan for court proceedings and depositions. Based upon these factors, the Court held that defendants had not shown that the Eastern District of Michigan was clearly more convenient and denied the motion.

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Abbott Labs. V. Church & Dwight, Inc., No. 07 C 3428, 2007 WL 3120007 (N.D. Ill. Oct. 23, 2007) (Kennelly, J.).

Judge Kennelly denied defendant Church & Dwight’s (“C&D”) 28 U.S.C. Section 1404(a) motion to transfer this patent case to the District of New Jersey, where a related case between the parties was pending, and granted C&D’s motion to dismiss a claim that the New Jersey Court previously dismissed for lack of standing. In New Jersey, C&D sued plaintiff Abbott Laboratories (“Abbott”) alleging infringement of patents covering lateral flow immunology devices, and pregnancy and ovulation testing methods. Abbott counterclaimed alleging infringement of three patents, including U.S. Patent No. 6,534,320 (the “’320 patent”). The New Jersey Court ultimately dismissed Abbott’s counterclaim, holding that Abbott was a nonexclusive licensee of the ‘320 patent and, therefore, lacked standing. The New Jersey Court also held that standing could not be cured by Abbott’s effort to involuntarily join its licensor Inverness pursuant to Fed. R. Civ. P. 19.  Based upon the New Jersey Court’s ruling, this Court held that issue preclusion prevented Abbott from re-litigating its standing to sue. Unless Abbott revised its license agreement with Inverness, giving Abbott additional rights, the New Jersey Court’s ruling was preclusive. The Court, therefore, dismissed Abbott’s ‘320 patent infringement claim.

The Court denied C&D’s motion to transfer the case to New Jersey. The Court gave Abbott’s choice of forum deference. And the Court gave little weight to the parties’ ongoing New Jersey patent suit because the New Jersey Court dismissed Abbott’s counterclaims before making any substantive rulings. The New Jersey Court, therefore, would not have been in a better position to decide any issues in the case. 

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Timebase Pty Ltd. v. Thomson Corp., No. 07 C 460, 2007 WL 772946 (N.D. Ill. Mar. 9, 2007) (Lindberg, Sen. J.).

Judge Lindberg transferred this patent case to the District of Minnesota because all of the relevant documents and witnesses reside within that district or its subpoena power, while the dispute has no apparent unique connection to Illinois.  The software at issue, Westlaw's PastStat Locator, was researched, designed and developed in Minnesota and the related documents were still there.  Additionally, although the PastStat Locator can be accessed in any state, including Illinois, the hardware and software necessary to operate it are located in Minnesota.  Finally, 24 of the 25 witnesses identified as related to defendant are within the D. Minn. or its subpoena power.  And plaintiff's witnesses are in Australia, so whether they flew to Illinois or Minnesota was a minor difference to them at most.

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