United States District Court, N.D. Illinois, Eastern Division
September 24, 2004.
R.E. DAVIS CHEMICAL CORPORATION, Plaintiff,
INTERNATIONAL CRYSTAL LABORATORIES, INC., JOHN DOE CUSTOMERS #1-1000, Defendants.
The opinion of the court was delivered by: RONALD GUZMAN, District Judge
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendant International
Crystal Laboratories, Inc.'s ("ICL") Motion to Transfer Venue
Pursuant to 28 U.S.C § 1406(a) or § 1404(a) and ICL's Motion for
Costs and Fees Pursuant to 28 U.S.C. § 1927. For the reasons that
follow, ICL's motion to transfer pursuant to § 1404(a) is
granted, and the motion for costs and fees is denied.
On October 15, 2003, Plaintiff R.E. Davis Chemical Corp.
("Davis"), an Illinois resident, filed a complaint alleging ICL
infringed Davis's Patent 5,290,705 (the '705 patent) by selling
and/or offering for sale analytic specimen supports, including
certain IR sampling cards containing polytetrafluoroethylene
("PTFE") and other IR sampling cards containing
polyethylene.*fn1 On October 27, 2003, ICL filed a declaratory judgment action against Davis
in the District of New Jersey, seeking a declaration of
noninfringement of the '705 patent.
On November 3, 2003, ICL filed the present motion to transfer
this case to the District of New Jersey. On November 18, 2003,
Plaintiff filed a motion seeking to enjoin ICL from proceeding
with the New Jersey litigation, claiming that New Jersey lacks
jurisdiction over Davis.
ICL seeks to transfer this action to the District of New Jersey
pursuant to either 28 U.S.C. § 1404(a) or § 1406(a).
28 U.S.C. § 1404(a) provides: "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." 28 U.S.C. § 1406(a) provides: "The district
court of a district in which is filed a case laying venue in the
wrong division or district shall dismiss, or if it be in the
interest of justice, transfer such case to any district or
division in which it could have been brought."
Thus, under either section, a preliminary issue is whether
venue properly lies in both this district and the transferee
district. Venue in patent cases is governed by
28 U.S.C. § 1400(b), which provides: "Any civil action for patent
infringement may be brought in the judicial district where the
defendant resides, or where the defendant has committed acts of
infringement and has a regular and established place of
business." For purposes of § 1400(b), a non-resident corporate
defendant "shall be deemed to reside in any judicial district in
which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c); see VE Holding
Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1583-84 (Fed.
A. Venue in the Transferee District
In this case, jurisdiction (and therefore venue) is clearly
proper in the District of New Jersey. ICL is a resident of New
Jersey, the state in which it is incorporated and has its
principal place of business. Contrary to Davis's argument, New
Jersey's alleged lack of jurisdiction over Davis is not relevant
and certainly does not render the § 1404(a) analysis "moot."
Davis is the plaintiff here, and its residence is not a factor in
the jurisdiction/venue determination.*fn2
B. Venue in the Transferor District
The Court now turns to the question of whether venue is proper
in the Northern District of Illinois.*fn3 The law of the
Federal Circuit governs the issue of personal jurisdiction over
ICL in this patent case. See Deprenyl Animal Health, Inc. v.
Univ. of Toronto Innovations Found., 297 F.3d 1343, 1348 (Fed.
Cir. 2002); Hildebrand v. Steck Mfg. Co., Inc., 279 F.3d 1351,
1354 (Fed. Cir. 2002). The Federal Circuit has explained that
before exercising personal jurisdiction over a defendant, "the court must determine whether an applicable
statute potentially confers jurisdiction by authorizing service
of process on the defendant, and whether the exercise of
jurisdiction would satisfy the requirements of due process."
Deprenyl Animal Health, 297 F.3d at 1349. The relevant statute
in this case is the Illinois long arm statute, which confers
jurisdiction over causes of action arising from several
enumerated acts as well as "on any other basis now or hereafter
permitted by the Illinois Constitution and the Constitution of
the United States." 735 ILL. COMP. STAT. 5/2-209(a), (c); see
Deprenyl, 297 F.3d at 1349 (noting that Federal Rule of Civil
Procedure 4(k)(1)(A) "allows a plaintiff to rely on the state
long arm statute . . . to obtain statutory authorization for the
exercise of personal jurisdiction").
1. Jurisdiction Under the Illinois Long Arm Statute
In this case, it is not disputed that an allegedly infringing
article was offered for sale and was sold to Plaintiff in
Illinois. ICL argues that its single sale to Illinois does not
constitute "[t]he transaction of any business" in Illinois, one
of the enumerated acts conferring jurisdiction under the Illinois
long arm statute. See 735 ILL. COMP. STAT. 5/2-209(a)(1).
However, the Federal Circuit has expressly stated that patent
infringement cases are creatures of federal law, and therefore
state law cannot "defin[e] its contours." See North Am. Philips
Corp. v. Am. Vending Sales, Inc., 35 F.3d 1576, 1579 (Fed. Cir.
[The Illinois long arm statute] is not the source of
the substantive right [in patent infringement cases]
and does not purport to affect its scope or nature.
So, while the federal choice of law rule concerning
personal jurisdiction requires us to look to state
law in the first instance, the character of the
particular tort alleged here requires a look back to
federal law on the conceptualization of the tort and
"[A]s a matter of uniform federal patent law . . . patent
infringement occurs where the allegedly infringing sales are
made." Id. at 1578-79. Illinois has an interest in regulating
the importation of infringing articles into the state, and "to
sell an infringing article to a buyer in Illinois is to commit a
tort there (though not necessarily only there). To hold otherwise
would exalt form over substance in an area where the Supreme
Court generally has cautioned against such an approach." Id. at
1579-80 (citations omitted). Thus, it does not matter where ICL
performed the sales contract:
Regardless where the transactions are deemed to be
situated under the tort or the `transacting business'
provisions, [the] defendants were nonetheless parties
to the importation into the forum state. Surely the
reasonable market participant in the modern
commercial world has to expect to be haled into the
courts of that state, however distant, to answer for
any liability based at least in part on that
Id. at 1580.
Similarly, it is irrelevant that the sale was FOB New Jersey.
See id. at 1579 (holding that the place where legal title
passes has no "controlling significance").
In any event, because the Illinois long arm statute reaches any
defendant that due process will allow, "the two-step inquiry
folds into one: whether an exercise of personal jurisdiction over
[the defendant] would offend [d]ue [p]rocess." Red Wing Shoe
Co., Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1358
(Fed. Cir. 1998). 2. Due Process
Because the Illinois long arm statute does purport to confer
jurisdiction over ICL, the Court must next determine whether the
exercise of jurisdiction satisfies due process. "Where a forum
seeks to assert specific jurisdiction over an out-of-state
defendant who has not consented to suit there, [the Due Process
Clause's] `fair warning' requirement is satisfied if the
defendant has `purposefully directed' his activities at residents
of the forum, . . . and the litigation results from alleged
injuries that `arise out of or relate to' those activities,"
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)
(citations omitted). Therefore, due process is satisfied if a
state "`asserts personal jurisdiction over a corporation that
delivers its products into the stream of commerce with the
expectation that they will be purchased by consumers in the forum
State' and those products subsequently injure forum consumers."
Id. at 473.
In spite of several stray comments suggesting otherwise, Davis
does not claim that this Court has general jurisdiction over ICL.
Rather, Davis argues that ICL's one-time sale of PTFE IR sampling
cards to Davis*fn4 provides a sufficient minimum contact to
confer specific jurisdiction consistent with the Due Process
The Federal Circuit, in Akro Corp. v. Luker, 45 F.3d 1541
(Fed. Cir. 1995), summarized the various Supreme Court cases
governing the due process inquiry and "outlined a three-prong
minimum contacts test for determining if specific jurisdiction
existed: (1) whether the defendant purposefully directed its activities at residents of the forum,
(2) whether the claim arises out of or relates to those
activities, and (3) whether assertion of personal jurisdiction is
reasonable and fair." 3D Sys., Inc. v. Aarotech Labs., Inc.,
160 F.3d 1373, 1378 (Fed. Cir. 1998) (citing Akro,
45 F.3d at 1545-46) (commenting that the Federal Circuit has "followed this
test consistently"); see also Burger King, 471 U.S. at 475
(quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)) ("`[I]t
is essential in each case that there be some act by which the
defendant purposefully avails itself of the privilege of
conducting activities within the forum State, thus invoking the
benefits and protections of its laws.'").
a. Minimum Contacts
In this case, the first two prongs of the Akro test are
satisfied because ICL purposefully directed its activities to
Illinois, and the patent infringement claim arises from those
activities. ICL does not dispute that Davis ordered the allegedly
infringing article from an unsolicited brochure sent by ICL to
Davis in Illinois. See 3D Sys., 160 F.3d at 1378 (holding that
the first prong of the Akro test is satisfied where the
defendant sends promotional letters, solicits orders, and issues
price quotations to citizens of the forum state); see also
Burger King, 471 U.S. at 475 ("Jurisdiction is proper . . .
where the contacts proximately result from actions by the
defendant himself that create a `substantial connection' with
the forum State.") (emphasis in original). Moreover, the offer to
sell resulted in an actual sale to an Illinois resident, and ICL
knowingly shipped the product to the Illinois forum. See
Worldtronics Int'l, Inc. v. Ever Splendor Enter. Co., Inc.,
969 F. Supp. 1136, 1140 (N.D. Ill. 1997) (quoting Beverly Hills Fan
Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564-65))
(explaining that due process is satisfied "where the
uncontroverted allegations `are that defendants purposefully shipped the accused [product] into [the forum state]
through an established distribution channel'") (alteration in
The second prong of the Akro test is also satisfied here
because the "patent infringement claim obviously `arises out of
or relates to' [the defendant's] allegedly infringing activities
in this forum." Berol Corp. v. BIC Corp., No. 02 C 559, 2002 WL
1466829, at *3 (N.D.Ill. July 8, 2002); see 3D Sys.,
160 F.3d at 1378 (holding that a defendant's sending price quotation
letters into the forum state constituted an "offer to sell" under
35 U.S.C. § 271, thus satisfying the second prong of the Akro
Furthermore, it does not matter that there was only one alleged
contact with Illinois, see Burger King, 471 U.S. at 475 n. 18
("So long as it creates a `substantial connection' with the
forum, even a single act can support jurisdiction."), or that ICL
never entered the Illinois forum, id. at 476 ("So long as a
commercial actor's efforts are `purposefully directed' toward
residents of another State, we have consistently rejected the
notion that an absence of physical contacts can defeat personal
Because the first two Akro factors have been met, "the burden
shifts to defendants to prove that personal jurisdiction in this
forum is not `reasonable and fair.'" Berol, 2002 WL 1466829, at
*3 (citing Akro, 45 F.3d at 1545-46); see Burger King,
471 U.S. at 476 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310,
320 (1945)). "[W]here a defendant who purposefully has directed
his activities at forum residents seeks to defeat jurisdiction,
he must present a compelling case that the presence of some other
considerations would render jurisdiction unreasonable." Burger
King, 471 U.S. at 477; see Berol, 2002 WL 1466829, at *3 (explaining that
a defendant faces "an exceedingly high standard" in demonstrating
jurisdiction is unreasonable or unfair). ICL has not attempted to
present a compelling case to defeat jurisdiction on the grounds
of unfairness. Instead, it raises only issues of convenience,
which will be addressed below. See Burger King, 471 U.S. at 477
(noting that many considerations of unfairness can be dealt with
through, among other things, a change of venue, rather than a
finding of no jurisdiction).
The Court therefore finds that ICL is subject to personal
jurisdiction in Illinois and that the exercise of jurisdiction
comports with due process. As a result, ICL's motion must be
denied to the extent it seeks transfer under § 1406(a).
C. Convenience of Parties and Witnesses, and Interests of
Having found that both the transferor and transferee districts
are proper venues, the Court now turns to the issue of whether
transfer is warranted for the convenience of parties and the
interest of justice. See 28 U.S.C. § 1404(a).
Because determining whether transfer is appropriate is made on
a case-by-case basis and "involves a large degree of subtlety and
latitude," it is "committed to the sound discretion of the trial
judge." Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th
Cir. 1986). In analyzing whether transfer is convenient under §
1404(a), courts are directed to consider both private and public
interests. Private interests, i.e., the interests of the
parties, include: "(1) the plaintiff's choice of forum, (2) the
situs of the material events, (3) the relative ease of access to
sources of proof, (4) the convenience of the parties, and (5) the
convenience of the witnesses." Amoco Oil Co. v. Mobil Oil
Corp., 90 F. Supp. 2d 958, 960 (N.D. Ill. 2000). The analysis of
public interests "`focuses on the efficient administration of the court system, rather than the
private considerations of the litigants.'" Id. at 961. Public
interests "include such considerations as the speed at which
the case will proceed to trial, the court's familiarity with the
applicable law, the relation of the community to the occurrence
at issue, and the desirability of resolving controversies in
their locale." Id. at 961-62. The movant has the burden of
proving that "the transferee forum is clearly more convenient."
Coffey, 796 F.2d at 219-20.
1. Private Interests
a. Plaintiff's Choice of Forum and Situs of Material Events
The plaintiff's choice of forum is generally given substantial
weight, and the presumption in favor of the plaintiff's choice
"`may be overcome only when the private and public interest
factors clearly point toward trial in the alternative forum.'"
Sec. & Exch. Comm'n v. Barzilay, No. 99 C 5023, 2001 WL 127667,
at *2 (N.D. Ill. Feb. 14, 2001) (quoting Macedo v. Boeing Co.,
693 F.2d 683, 688 (7th Cir. 1982)); see also In re Nat'l Presto
Indus., Inc., 347 F.3d 662, 664 (7th Cir. 2003) (quoting Gulf
Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)) ("`[U]nless the
balance is strongly in favor of the defendant, the plaintiff's
choice of forum should rarely be disturbed. . . . Rarely,
however, is not never.'"). Deference to the plaintiff's choice of
forum is minimized where it is not the plaintiff's home forum or
the situs of material events. See Coleman v. Buchheit, Inc.,
No. 03 C 7495, 2004 WL 609369, at *1 (N.D. Ill. Mar. 22, 2004);
see also Sitrick v. Freehand Sys., Inc., No. 02 C 1568, 2003 WL
1581741, at *2 (N.D. Ill. Mar. 27, 2003) (noting that less
deference is given to the plaintiff's choice of forum "when it
lacks any significant contact with the underlying forum"). In this case, Davis's home forum is Illinois, and an allegedly
infringing article was sold to Davis in Illinois. The majority of
material events, however, occurred in New Jersey, which is where
the alleged infringing products were manufactured, and from where
the alleged infringing products are sold. See Berol, 2002 WL
1466829, at *4 (explaining that "courts have often focused on the
location of the allegedly infringing sales, or the alleged
infringer's place of business"). Moreover, Davis alleges ICL has
infringed its patent "in Illinois and elsewhere," (Am. Compl. ¶
8), so Illinois is not the only location of alleged infringement.
See Berol, 2002 WL 1466829, at *4 (holding that the connection
to the forum state is not strong where "the alleged infringement
is presumably occurring in several fora across the country").
Because Illinois is not the situs of material events, Davis's
choice of forum need not be given significant weight. Most
material events occurred in New Jersey, which strongly weighs in
favor of transfer.
a. Access to Proof and Convenience of Witnesses and Parties
The convenience of witnesses has often been described as the
most important factor in the § 1404(a) analysis. See, e.g.,
Coleman, 2004 WL 609369, at *2. Neither party, however, has
identified any third-party witnesses who would be inconvenienced
by litigating this case in either Illinois or New Jersey. All of
the witnesses are apparently agents or employees of the parties,
and their convenience does not weigh for or against transfer.
See Applied Web Systems, Inc. v. Catalytic Combustion Corp.,
No. 90 C 4411, 1991 WL 70893, at *5 (N.D. Ill. Apr. 29, 1991)
("In weighing the relative inconvenience of witnesses, the Court
generally assigns little weight to the location of
employee-witnesses."). Similarly, the convenience of the parties is essentially equal.
First, while ICL would have to transport numerous witnesses to
the Illinois forum if the case is not transferred, it has not
established that doing so would be a hardship. See Sitrick,
2003 WL 1581741, at *4 (stating that the parties' financial
abilities can be relevant to the issue of the convenience of the
parties). Second, although the Court is sensitive to the concerns
of Mr. Davis, Plaintiff's principal, about his health and his
inability to travel, he may appear by deposition in Illinois no
matter where the litigation is centered. See, e.g., Paramount
Pictures Corp. v. Behnke, No. 94 C 6878, 1995 WL 399494, at *4
(N.D. Ill. June 29, 1995).
The next factor to be considered is the location of relevant
documents and sources of proof. ICL's manufacturing equipment and
materials, as well as the related documents needed for the
litigation, are all located in New Jersey. See Berol, 2002 WL
1466829, at *5 ("[P]atent infringement suits usually focus on the
activities of the alleged infringer, its employees, and its
documents rather than upon those of the plaintiffs."). There is
apparently little, if any, evidence located in the Northern
District of Illinois. Therefore, access to proof weighs heavily
in favor of transfer to District of New Jersey.
2. Public Factors
The interest of justice is analyzed separately from private
factors "and may be determinative in a particular case, even if
the convenience of the parties and witnesses might call for a
different result." Coffey, 796 F.2d at 220. As stated above,
the interest of justice includes: (1) the speed at which the case
will proceed to trial; (2) the court's familiarity with
applicable law; (3) the desire to resolve the case in each forum; and (4) the relation of each
community forum to the issue of the case. See Coleman, 2004 WL
609369, at *3.
First, this Court and the District of New Jersey are equally
familiar with patent law. Second, the "community interest" factor
militates neither for nor against transfer. While Illinois has an
interest in redressing alleged infringement occurring in the
state, this interest is not unique to Illinois. The other states
in which the product is sold have an equal interest in redressing
the alleged infringement. See Berol, 2002 WL 1466829, at *5.
Finally, New Jersey is the situs of material events, and "the
administration of justice is served more efficiently when the
action is brought before a court that is closer to the action."
Berol, 2002 WL 1466829, at *5 (internal quotations and citation
omitted). The Court therefore finds that the private and public
interests weigh strongly in favor of transferring the case to the
District of New Jersey.
D. Motion for Costs and Fees
ICL's motion for costs and fees seeks recovery of expenses
incurred in bringing the motions to transfer venue and for costs
and fees, discovery on jurisdiction and venue, and opposing the
motion for preliminary injunction pursuant to 28 U.S.C. § 1927.
ICL argues that Davis brought this infringement action when it
should have known three of six accused products did not infringe
and that Davis's reasons for asserting personal jurisdiction over
ICL in the Northern District of Illinois are insufficient.
Excess costs, expenses, and attorneys' fees may be recovered
from "[a]ny attorney . . . who so multiplies the proceedings in
any case unreasonably and vexatiously." 28 U.S.C. § 1927.
"`Vexatious' conduct involves either subjective or objective bad
faith." Pacific Dunlop Holdings, Inc. v. Barosh, 22 F.3d 113, 120 (7th Cir. 1994). Because this
Court does have subject matter jurisdiction over ICL, Davis's
actions in defending against the motion to transfer venue were
clearly not vexatious or unreasonable. Defendant's motion for
costs and fees therefore must be denied.
Defendant ICL's Motion to Transfer Venue Pursuant to
28 U.S.C. § 1406(a) or § 1404(a) is granted. Defendant's Motion for Costs
and Fees [doc. no. 43-1] is denied. All other pending motions,
including Plaintiff's Motion for Preliminary Injunction, are
denied as moot. The case is hereby transferred to the District of