United States District Court, N.D. Illinois, Eastern Division
June 13, 2005.
IP INNOVATION L.L.C., TECHNOLOGY LICENSING CORP., AV TECHNOLOGIES LLC and NEW MEDIUM LLC, Plaintiffs,
MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. and PANASONIC CORPORATION OF NORTH AMERICA, Defendants.
The opinion of the court was delivered by: SUZANNE CONLON, District Judge
MEMORANDUM OPINION AND ORDER
IP Innovation LLC, Technology Licensing Corporation, AV
Technologies LLC and New Medium LLC ("plaintiffs") sue Matsushita
Electric Industrial Co., Ltd. and Panasonic Corporation of North
America (collectively "Panasonic" or "defendants") for patent
infringement pursuant to 35 U.S.C. § 271 et seq. Plaintiffs
claim Panasonic infringed eight patents. Panasonic counterclaims
that the patents are not infringed, are invalid, and that it is
licensed to use six of the eight patents. Three of the plaintiffs
IP Innovation, AV Technologies, and New Medium assert
Illinois is their principal place of business. Defendants are
Japanese and Delaware corporations. Panasonic moves to transfer
venue to the Northern District of California, San Jose Division,
pursuant to 28 U.S.C. § 1404(a).
A court may transfer venue to any district or division where
the case may have been brought for the convenience of parties and
witnesses. 28 U.S.C. § 1404(a). To prevail on a motion to transfer under § 1404(a), the moving party must demonstrate: (1)
venue is proper in both the transferor and transferee court; (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). Venue is
appropriate here. The parties do not dispute that venue is
appropriate in the Northern District of California. Therefore,
the court considers the convenience of the parties and witnesses
and the interests of justice.
A. Convenience of the Parties
In determining the convenience of the parties and witnesses,
the court considers: (1) plaintiffs' 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, *3 (N.D. Ill. Jan. 20, 2000). Panasonic, as the moving
party, bears the burden of showing that the Northern District of
California is clearly more convenient than this district. 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). "Venue may not be transferred simply to shift
inconvenience from the defendant to the plaintiff." Id.
Plaintiffs' choice of forum is generally given substantial
weight under § 1404(a), particularly when it is plaintiffs' home
forum. See Pepsico, Inc. v. Marion Pepsi-Cola Bottling Co., No.
99 C 3939, 2000 WL 263973, *8 (N.D. Ill. Mar. 6, 2000). Three of
the plaintiffs purport to reside in Illinois. Panasonic contends
plaintiffs' choice of forum should be given no weight because the Illinois plaintiffs' are actually "shell corporations" that do
not have telephone listings in Illinois, are not registered to do
business in Illinois, and whose names do not appear on the door
of their office suites. Further, Panasonic asserts two of the
plaintiffs were suspiciously formed shortly before the
commencement of litigation. The legitimacy of plaintiffs'
representation that Illinois is their home forum was raised in
other litigation in IP Innovation v. Lexmark Int'l, Inc.,
289 F.Supp.2d 952, 954-55 (N.D. Ill. 2003) (Kocoras, J.). There, this
court found there was an apparent basis for an attack on the
legitimacy of plaintiffs' Illinois presence. However, the court
was "loath to conclude, with the attendant ramifications, that IP
Innovation not only manufactured venue but also included false
statements within their submissions to this court . . ."
Similarly, plaintiffs here represent that they are legitimate
companies, formed for legitimate reasons and that Illinois is
their principal place of business. The consequences for
manufacturing venue and making material misrepresentations to the
court are severe, and this serious conclusion is not supported by
the present record. The decision to file within this district
weighs in plaintiffs' favor and against transfer.
Panasonic contends California is the site of material events
because Genesis, a manufacturer of accused chips, designs the
chips in California and because the patent licenses were
negotiated in California. However, these events are not
particularly relevant in determining the site of material events
for an infringement action. Indeed, the second factor does not
favor either venue because "the material events of a patent
infringement case do not revolve around a particular situs."
Sitrick v. FreeHand Systems, Inc., No. 02 C 1568, 2003 WL
1581741, at *3 (N.D. Ill. Mar. 27, 2003). In other words, the
comparison involved in determining whether a patent has been
infringed does not implicate a specific location. Id., citing
Medi USA, L.P. v. Jobst Institute, Inc., 791 F. Supp. 208, 210
(N.D. Ill. 1992). While the infringement allegedly occurred
throughout the country, Panasonic admits the accused products were sold in this judicial district.
Mot. at 10. Therefore, this factor is neutral.
The relative ease of access to sources of proof is also
neutral. Panasonic concludes that access to sources of proof is
better in California because third party witnesses are in
California and certain products are manufactured there. Witness
convenience and the site of events are separate considerations in
the transfer analysis. Access to documents or other similar
evidence does not particularly favor one venue over the other.
Copying and shipping documents do not typically impose a
significant burden. All documents necessary to present both sides
of the case can easily be transported to either venue. Hanley v.
Omarc, Inc., 6 F. Supp. 2d 770, 775 (N.D. Ill. 1998).
The court must also consider witness convenience in determining
whether transfer is appropriate. Panasonic argues the following
material third party witnesses are located in California: (1)
Genesis a supplier of accused chips; (2) four of five patent
inventors (Loveless, Vojnovic, Stratton, Cooper); (3) Video
Processing Technology, the company that licensed certain patents
to Panasonic; (4) Pixel Instruments, the original assignee of
certain patents; and (5) Acacia owner of three of the four
plaintiffs. Panasonic contends it lacks compulsory process over
these third party witnesses if the case remains in Illinois.
However, even assuming all of the proffered witnesses are
actually necessary, Panasonic fails to provide evidence that
these witnesses will not appear voluntarily or that their
testimony cannot be offered through deposition. See Central
States v. Kurtz Gravel Co., No. 98 C 2174, 1998 WL 684216, at *2
(N.D. Ill. Sept. 18, 1998) (lack of compulsory process does not
compel transfer where there is no evidence that witnesses are
hostile or reluctant); see also Florsheim Group, Inc. v. Rosa
Andreau Vila, No. 01-3334, 2001 WL 1263358, *3 (N.D. Ill. Oct.
18, 2001) (same). Indeed, plaintiffs attach evidence that Cooper
and Pixel will voluntarily appear in Illinois. Resp. at Ex. C.
The court also considers the convenience of the parties in its
§ 1404(a) determination. Specifically, the parties' respective
residences and their ability to bear the costs of litigating in a
particular forum are considered. Avesta Sheffield v. Olympic
Continental Resources, L.L.C., No. 99 C 7647, 2000 WL 198462 at
*7 (N.D. Ill. Feb. 14, 2000). The parties do not proffer
arguments regarding their financial ability to litigate in either
forum. Three of the plaintiffs are located in Illinois; the
fourth plaintiff is a Nevada resident. The defendants are
Japanese and Delaware corporations. Although Panasonic challenges
the Illinois residency of three plaintiffs, the fact remains that
none of the parties reside in California. Panasonic contends the
Illinois plaintiffs are owned by Acacia a California
corporation. The fact that a California company owns the stock of
three of the plaintiffs does not affect the analysis. The
plaintiffs' Illinois residency weighs against transfer. Further,
plaintiffs are currently pursuing additional prosecutions of the
patents in this district. While it is feasible for plaintiffs to
litigate in multiple fora, it is obviously more convenient and
cost efficient for plaintiffs to litigate all of their cases
here. Because Panasonic bears the burden of making a strong
showing that transfer is warranted, consideration of witness and
party convenience favors keeping the case here.
B. Interests of Justice
The court must consider whether transfer is in the interests of
justice. This 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). Among the factors considered are the
speed cases proceed to trial and the public interest in having a
case resolved in a particular forum. See Celozzi v. Boot, No.
00 C 3285, 2000 WL 1141568, *8 (N.D. Ill. Aug. 11, 2000). Both districts are equally capable of resolving federal
patent litigation. However, this court has ensured a speedy trial
by scheduling trial in February 2006 approximately 12 months
from the filing of the complaint. Plaintiffs submit evidence
reflecting a 2004 median time from filing to trial in the
Northern District of California as 22.5 months. Resp. at Ex. G.
Based on this record, transfer is inappropriate. Panasonic has
not shown that California is clearly a more convenient venue.
For the foregoing reasons, Panasonic's motion to transfer venue
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