UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
October 15, 1970
DUPLAN CORP., Plaintiff,
DEERING MILLIKEN, INC., Deering-Milliken Research Corp. and Moulinage et Retorderie de Chavanoz, Defendants
Edelstein, District Judge.
The opinion of the court was delivered by: EDELSTEIN
EDELSTEIN, District Judge.
This is a motion by defendants Deering Milliken, Inc. (DMI) and Deering Milliken Research Corporation (DMRC) to transfer this case to the District of South Carolina, Spartanburg Division, pursuant to 28 U.S.C. § 1404(a).
This action is one of several now pending between DMRC and its licensees under certain patent licenses. (The patents covered by the licenses relate to various processes for giving fibers a false twist, and are referred to as "FT patents," and "FT licenses.") A third defendant, Moulinage et Retorderie de Chavanoz ("Chavanoz") is named in the complaint. Chavanoz is a French Company and the owner of the FT patents.
It has granted to DMRC an exclusive license to use and sublicense its patents in the United States. Duplan asserts that the FT licenses are unenforceable. In its complaint it seeks in part declaratory judgment that the FT patents are invalid or are not infringed by plaintiff, and an injunction and treble damages based on alleged misuse of the FT patents. Some other licensees make similar claims in actions instituted in North Carolina. All of these licensees, including Duplan, are sued federally by DMRC in South Carolina.
In the case at bar the action should be transferred to the District of South Carolina. South Carolina is the district with the most substantial contacts with the issues in dispute and where related actions involving substantially identical issues and subject matter are pending.
The presence of related actions and issues in South Carolina is a persuasive reason for the decision to transfer. As noted there are several litigations between DMRC and FT licensees pending in the District of South Carolina. The District of South Carolina is where all such disputes about the validity and enforceability of the FT license agreements can be resolved. Transfer to South Carolina could expedite a final determination of the right of DMRC to enforce the FT licenses. It is only in the District of South Carolina that all the FT licensees who have challenged the validity of the agreements are present as defendants.
Trial in New York could track the South Carolina litigation, including the whole panoply of pretrial maneuvers. It is in the interests of justice to seek to minimize the number of forums where litigation is held. Schneider v. Sears, 265 F. Supp. 257, 266-267 (S.D.N.Y. 1967). It is also in the interests of the parties to keep litigation expenses to a minimum. In Schlusselberg v. Werly, 274 F. Supp. 758, 764 (S.D.N.Y. 1967), the court indicated that it "would be compelled" by the pendency in Boston of two similar actions to transfer the case.
Duplan argues, in favor of litigating this case in the Southern District of New York, that it brought an action here approximately three weeks before DMRC instituted its South Carolina action against Duplan. Duplan admits that the South Carolina action against it and the one here involve substantially the same issues. In Sweetheart Plastics, Inc. v. Illinois Tool Works, Inc., 267 F. Supp. 938 (S.D.N.Y. 1967) the dispute was also over whether certain patents were infringed. The alleged infringer, Sweetheart Plastics, brought a declaratory judgment action in the Southern District against the patentee, Illinois Tool Works. Two weeks later Illinois Tool sued Sweetheart in the Northern District of Illinois. Although Illinois Tool Works had a New York office, the case was transferred to Illinois. Judge Weinfeld observed that Illinois was a more convenient forum for Illinois Tool Works and that Sweetheart Plastics, a Massachusetts based corporation, would be little more inconvenienced by an Illinois trial than by a New York trial. Supra at 942. Duplan's attempts to distinguish the Sweetheart case by overemphasizing the significance Judge Weinfeld attached to the pendency of other actions in the Northern District of Illinois is unconvincing. Neither Duplan's priority in starting suit nor Duplan's choice of forum is entitled to determinative weight. Courts have held that minimal weight should be given to plaintiff's choice of forum where the plaintiff has chosen a district having no strong or substantial connection with the parties or the subject matter. Ross v. Tioga General Hospital, 293 F. Supp. 209, 211 (S.D.N.Y. 1968); Boggess v. Columbian Rope Co., 167 F. Supp. 854, 856 (S.D.N.Y. 1958).
Duplan has not shown that New York has a strong connection with the issues in question. Duplan, a Delaware corporation, while having a large sales and executive office in New York, has offices, warehouses, and manufacturing facilities in forty-six other states. It is Duplan's texturizing manufacturing facility in Dillon, South Carolina, which employs the "FT patents." DMRC is a South Carolina corporation whose facilities, records, offices and employees are in South Carolina. The license agreement, the subject matter of the dispute, was entered into in South Carolina and was to be performed there. It is in South Carolina where royalty payments were made, where reports were submitted, where services, testing and research activities and the furnishing of training and technical information were performed by DMRC for Duplan. If the patents were infringed then this occurred in South Carolina. The defendants' argument that it will be necessary to view the South Carolina machinery in operation has some persuasive value. It is remotely possible that the trier of the facts might be aided by a view of the machines in South Carolina.
The primary dispute in this case is between the sublicensor, DMRC, and the sublicensee, Duplan. DMI claims it has nothing to do with the license agreements in dispute since DMRC, although owned by DMI, is seen as an independent corporation. DMI does not manufacture under the FT patents in New York, nor does it have an agreement with Duplan which relates to the patents. DMI states that DMRC, based and operated solely from South Carolina, grants and is responsible for the administration of the licenses.
The court is satisfied that transfer to the District of South Carolina, Spartanburg Division, would best serve the convenience of the parties and the interests of justice.
Motion to transfer is granted.