United States District Court, N.D. Illinois, Eastern Division
June 21, 2004.
MATWELD, INC., Plaintiff,
PORTACO, INC., Defendant.
The opinion of the court was delivered by: SUZANNE CONLON, District Judge
MEMORANDUM OPINION AND ORDER
Matweld, a Kentucky corporation, sues Portaco, a corporation
based in Moorhead, Minnesota for patent infringement in violation
of 35 U.S.C. § 271 (Count I), and unfair competition under the
Lanham Act, 15 U.S.C. § 1125(a). Portaco counterclaims for a
declaration of non-infringement and invalidity. Portaco moves to
transfer venue to the District of Minnesota pursuant to
28 U.S.C. § 1404(a).
Matweld designs and manufactures rail grinding machines. It
owns United States Letters Patent No. 6,663476 (`476 patent) for
an invention entitled "Portable Multipurpose Rail Grinding
Machine." The patent was issued on December 16, 2003, Application
No. 10/118,820. Compl. Ex. A. The machine is used to grind field
welds, switch points and frogs on train rails. Id. Portaco also
manufactures railroad grinding machine technology. Matweld
alleges two Portaco grinders infringe on the '476 patent: an
adjustable (Item #GW-10-89-1) and a non-adjustable grinder (Item
# GW-10-89-0). Wilson Decl. ¶¶ 7-8. Portaco sold five non-adjustable grinders in
Illinois and no adjustable grinders. Id.
Portaco contends Matweld's lawsuit is tenuously related to the
Northern District of Illinois. It asserts the convenience of the
parties and the interests of justice favor transfer to the
District of Minnesota because the vast majority of documentary
evidence and witnesses reside in Minnesota. To prevail on a
motion to transfer under § 1404(a), Portaco must demonstrate: (1)
venue is proper in both Illinois and Minnesota; (2) transfer is
for the convenience of the parties and witnesses; and (3)
transfer is in the interests of justice. Pasulka v. Sykes,
131 F. Supp.2d 988, 994 (N.D. Ill. 2001), quoting TruServ Corp. v.
Neff, 6 F. Supp.2d 790, 793 (N.D. Ill. 1998). Portaco has
consented to the jurisdiction of this court, and the parties
agree venue is proper both here and in the District of Minnesota.
See Fed.R.Civ.P. 12(h)(1) (Portaco withdrew 12(b)(2)
objection); Milwaukee Concrete Studios, Ltd. v. Fjeld
Manufacturing Co., Inc., 8 F.3d 441, 446 (7th Cir. 1993) (venue
proper under 28 U.S.C. § 1400 wherever defendant is amenable to
personal jurisdiction). Therefore, Portaco's motion turns on
whether litigation in the District of Minnesota would be more
convenient and in the interests of justice.
1. Convenience of the Parties
In determining the convenience of the parties and witnesses,
the court considers: (1) the plaintiff's choice of forum; (2) the
site of material events; (3) the availability of evidence in each
forum; and (4) the convenience to the witnesses and parties of
litigating in the respective forums. Confederation Des
Brasseries de Belgique v. Coors Brewing Co., No. 99 C 7526, 2000
WL 88847, at *3 (N.D. Ill. Jan. 20, 2000). Portaco, as the moving
party, bears the burden of showing that the District of Minnesota is clearly more convenient than the
Northern District of Illinois. Source Services Corp. v.
Technisource, Inc., No. 95 C 1420, 1995 WL 493499, at *2 (N.D.
Ill. Aug. 9, 1995). Venue should be transferred only if there is
a clear balance of inconvenience in the transferor district over
the transferee district. Tsaparikos v. Ford Motor Co., No. 02 C
6899, 2002 WL 31844949 (N.D. Ill. Dec. 18, 2002).
A plaintiff's choice of forum is generally given substantial
weight under § 1404(a). Vandeveld v. Christoph, 877 F. Supp. 1160,
1167 (N.D. Ill. 1995). However, because the Northern
District of Illinois is not Matweld's resident forum, Matweld's
choice warrants less deference. Pinpoint, Inc. v. Amazon.com,
No. 03 C 4954, 2003 WL 22175514, at *2 (N.D. Ill. Sept. 19,
2003). Indeed, Matweld does not claim it has an office or a
continuing business presence in Chicago. See id. at *3.
Accordingly, Matweld's forum preference does not predominate and
is only one of many factors the court considers. Id.
Portaco contends transfer is proper because most of the
material events giving rise to Matweld's claims occurred in
Minnesota where the allegedly infringing grinders were designed.
Portaco has sold no more than five purportedly infringing items
in Illinois, and in southern Illinois at that. Matweld responds
that Portaco's assertion of limited sales is supported by
adequate proof, and that Portaco's sale of grinders constitutes
infringement giving rise to the suit. However, intellectual
property suits generally focus on the activities of the alleged
infringer, its employees, and its documents. Wen Products, Inc.
v. Master Leather, Inc., 899 F. Supp. 384, 386 (N.D. Ill. 1995);
Habitat Wallpaper and Blinds, Inc. v. K.T. Scott Ltd.
Partnership, 807 F. Supp. 470, 474 (N.D. Ill. 1992). Portaco's
research, development and manufacturing centers are located in
Minnesota. These factors strongly favor transfer because
documents and witnesses regarding Portaco's activities are factual elements central to Matweld's patent and copyright
claims. Habitat Wallpaper and Blinds, 807 F. Supp. at 474; cf.
Pinpoint, 2003 WL 22175514 at *2 (where scope of sales and
infringing activity was nationwide, location of defendant's
business given minimal consideration); see also Milwaukee
Concrete Studios, 8 F.3d at 446 (patent and copyright venue
statute favors litigation where defendant resides or has a
regular and established place of business). Matweld argues the
benefits gained by litigating the '476 patent in Minnesota are
insignificant because the documentary evidence may be shipped and
depositions may substitute for oral testimony. See Hanely v.
Omarc, Inc., 6 F. Supp.2d 770, 775 (N.D. Ill. 1998). However,
virtually all the acts underlying Portaco's alleged infringement
of the '476 patent took place in Moorhead including the design
and manufacture of the rail grinders. Both the location of
material events and ease of access to proof favor transfer to
Minnesota. See Sitrick v. Dreamworks, L.L.C., No. 02 C 8403,
2003 WL 211478898, at *3-4 (N.D. Ill. May 14, 2003).
The court must also consider witness convenience in determining
whether transfer is appropriate. In this case, witness
convenience slightly favors transfer. Portaco identifies eight
employee-witnesses who will be called to testify about its
development, manufacture and sale of rail grinders. Wilson Decl.
at ¶ 19. While the location of employee witnesses is generally
afforded little weight in the convenience analysis, their
location is important in an intellectual property infringement
case. Compare Pinpoint, 2003 WL 22175514 at *2 (employee
witnesses given no deference), with Habitat Wallpaper and
Blinds, 807 F. Supp. at 474. Employee conduct and testimony is
critical to determine whether Portaco violated the '476 patent.
Litigating the matter in Chicago would require Portaco employees
to travel more than 500 miles. Wilson Decl. ¶¶ 15-20. In
contrast, Matweld fails to identify the number or import of its
potential employee witnesses, who are located in Paducah, Kentucky. Nor does Matweld explain why
litigation in Chicago would be less burdensome in light of the
fact that Matweld's employees would travel substantial distances
in either case. Accordingly, the proximity of employee-witnesses
to the District of Minnesota favors transfer. Habitat Wallpaper
and Blinds, 807 F. Supp. at 474.
The convenience of third-party witnesses also favors litigation
in Minnesota. Three third-party witnesses live in North Dakota.
Two of the witnesses, Ron Grotham and Ron Nerby, live just over
the border in Fargo, North Dakota, less than 60 miles away from
the United States District Courthouse in Fergus Falls, Minnesota.
The United States District Court in Minneapolis is 239 miles
away. This is considerably more convenient than traveling over
600 miles from Fargo to Chicago. Matweld fails to identify any
third-party witnesses who would be convenienced by testifying in
Chicago.*fn1 Although the ease of modern travel
significantly reduces burdens imposed by distance, litigation in
Minnesota would facilitate necessary third-party testimony.
Finally, the court must consider the convenience of the
parties. Pinpoint, 2003 WL 22175514 at *3. The parties'
respective residences and the costs associated with litigating in
a particular forum are relevant factors. Id. Transfer is
inappropriate if it would merely shift costs from one party to
another. Avesta Sheffield v. Olympic Continental Resources,
L.L.C., No. 99 C 7647, 2000 WL 198462, at *7 (N.D. Ill. Feb. 14,
2000). Matweld argues that Chicago is a superior forum because
its patent attorney is located here, and that it has a
long-standing relationship with a thirdparty manufacturer in the Chicagoland area. However, Matweld's
relationship with its Chicago attorney, without more, cannot
defeat transfer. Matweld fails to identify any witness, document,
or physical evidence located in Chicago. Indeed, evidence in
Matweld's possession is located in Kentucky. Whether the matter
is litigated in Minnesota or Chicago, Matweld's attorney will be
required to travel to conduct discovery and to ship documents.
Cf. Pinpoint, 2003 WL 22175514 at *3 (transfer inappropriate
where plaintiff maintained both Chicago office and Chicago
attorney). Although Matweld may incur additional expense
litigating the matter in Minnesota, this inconvenience is
outweighed by the significant efficiencies gained by transfer.
2. Interests of Justice
Finally, the court must consider whether transfer is in the
interest of justice. The interest of justice analysis focuses on
efficient functioning of the courts, rather than the private
interests of the litigants. TIG Ins. Co. v. Brightly Galvanized
Products, Inc., 911 F. Supp. 344, 346 (N.D. Ill. 1996). In
determining the interest of justice, the court considers
traditional notions of judicial economy, such as (1) relations of
the community to the issues; (2) ensuring a speedy trial; and (3)
the respective court's familiarity with the applicable law.
Avesta Sheffield, 2000 WL 198462, at *7. Although both
districts are equally capable of applying federal law, this
litigation does not arise out of events occurring in the Northern
District of Illinois, nor are the parties Illinois residents.
This case has no discernible relationship with Illinois public
policy interests. Litigation in the District of Minnesota would
enhance the availability of oral testimony and is more convenient
for third-party witnesses. Furthermore, injunctive and monetary
relief against Portaco, if granted, would require enforcement in
Minnesota. See Habitat Wallpaper and Blinds, 807 F. Supp. at
475. Matweld argues the District of Minnesota is an inferior forum
because it would delay resolution of the case. This court has
placed the case on the January 2005 trial calendar. A review of
case management statistics suggests the case may conclude up to
13 months earlier if it proceeds to trial in this court. Judicial
Caseload Profile at
Although proceeding in the Northern District of Illinois may
speed resolution of the parties' dispute, transferring venue to
Minnesota would afford convenience to Portaco, the witnesses and
the court, without placing undue burden on Matweld. Therefore,
the requested transfer is in the interest of justice and judicial
Portaco's motion to transfer this case to the United States
District Court for the District of Minnesota is granted.