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R.E. DAVIS CHEMICAL CORP. v. INT'L CRYSTAL LABORATORIES

September 24, 2004.

R.E. DAVIS CHEMICAL CORPORATION, Plaintiff,
v.
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.

BACKGROUND

  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.

  DISCUSSION

  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. Cir. 1990).

  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 ...


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