convenience, the Court considers the factors applicable to a motion for a change of venue pursuant to 28 U.S.C. § 1404(a). See 800- Flowers, Inc. v. Intercontinental Florist, Inc., 860 F. Supp. 128, 133 (S.D.N.Y. 1994).
These factors include (1) the convenience of witnesses; (2) the location of relevant documents and the relative ease of access to sources of proof; (3) the convenience of the parties; (4) the locus of the operative facts; (5) the availability of process to compel attendance of unwilling witnesses; (6) the relative means of the parties; (7) a forum's familiarity with the governing law; (8) the weight accorded a plaintiff's choice of forum; and (9) trial efficiency and the interests of justice, based on the totality of the circumstances. Id.
The first factor, convenience of witnesses, does not favor New York. While the witnesses Lyons expects to call are located in New York, Connecticut and England, Declaration of Joseph T. Murray, Lyons' counsel, dated February 28, 1995 ("Murray Decl. for Lyons v. Barrows"), at PP 4 - 9, Republic's witnesses are predominately located in California, Letter from Crittenden dated February 21, 1994, Lipton's witnesses are all or mostly in New Jersey, Declaration of Lawrence E. Hicks, Lipton's counsel, dated February 15, 1995 ("Hicks Decl."), at P 2, and Barrows' witnesses are located in Massachusetts, New York City and England. Barrows Aff. at PP 7, 9. Because any forum will be inconvenient to either plaintiff or defendants, this factor does not overcome the presumption in favor of the first-filed forum.
The second factor likewise does not favor New York. All of Republic's business records are maintained in California, Rosenzweig Decl. at P 2, all of Lipton's documents and records concerning the design, development, and marketing of Lipton Rounds family size tea products are located in New Jersey, Young Decl. at P 7, and all of Barrows' business records are located in Massachusetts. Barrows Aff. at P 8. Although Lyons has identified some New York witnesses, Lyons has not asserted that its business records are located in New York. Murray Decl. for Lyons v. Lipton at PP 1-14.
The third factor, the convenience of the parties, favors the defendants. In each case, the defendant filed in the district where the company had its primary place of business and, in the case of Republic and Barrows, where they were incorporated. On the other hand, Lyons is neither incorporated in New York, nor does it have its primary place of business in New York. The only real connection Lyons has to New York is that New York is where Lyons' attorneys are located.
The fourth factor, locus of the operative facts, favors the forum of the first-filed action. While Lyons correctly asserts that claims for trademark infringement or unfair competition may be brought "where the passing off occurs," that does not necessarily favor one such location over another. Schieffelin & Co. v. The Jack Co. of Boca, Inc., 725 F.Supp 1314, 1319-21 (S.D.N.Y. 1989). See also French Transit, Ltd., v. Modern Coupon Systems, Inc., 858 F. Supp. 22, 25 (S.D.N.Y. 1994). In Schieffelin, for example, the court found that the defendant sold the majority of its products in New York. Schieffelin, 725 F.2d at 1321. Here, the actions could be brought in any of the four jurisdictions. While Lyons and Lipton sell their products nationwide, Barrows' and Republic's sales are concentrated in Massachusetts and California.
The fifth factor, availability of process to compel attendance of unwilling witnesses, is not determinative since each district will be faced with this dilemma and none has a significant advantage over the other. The sixth factor, the relative means of the parties, favors the forum of the first-filed actions, at least in the case of Barrows and Republic. Both these companies are significantly smaller than either Lipton or Lyons and would bear a significant and disproportionate economic burden if forced to litigate in New York.
The seventh factor, the forum's familiarity with the governing law, does not favor any party. While Lyons asserts that it would be at a disadvantage if the cases are heard outside New York as a result of alleging violations of New York law, the other parties are also bringing state law claims.
The eighth factor, the weight accorded a plaintiff's choice of forum, is accorded less weight when the plaintiff has filed neither in his home state nor where the cause of action arose. See 800- Flowers, 860 F.Supp at 135. Here, Lyons has not filed in the state where it is incorporated or where its principal place of business is located. Also, as discussed above, the operative facts are not closely linked to New York.
Finally, trial efficiency and the interests of justice, based on the totality of the circumstances, dictate that the forums of the first-filed suits are the more convenient forums. The litigation of trademark infringement and unfair competition involve two key issues, likelihood of confusion and first use. The evidence on these issues is tied to the region of the sales. Discovery will be required in each of the areas where Barrows and Republic has its primary market. Furthermore, the issue of confusion depends on the product sold. Lipton, for example, sells a large round tea bag while Republic and Barrows sell individual sized tea bags. Also, likelihood of confusion will entail different evaluations as Barrows and Republic sell specialty teas as opposed to the type of tea sold by Lipton and Lyons. Therefore, it is inefficient to keep these actions in New York.
C. THE ISSUE OF TRADEMARK REGISTRATION VALIDITY SHOULD NOT BE BIFURCATED
Plaintiff has proposed that the validity of the trademark should be resolved in one district to minimize expenses and to avoid litigation of the same issue in three different districts. In this Circuit, the plaintiff must prove a prima facie case of infringement prior to any consideration of affirmative defenses such as the functionality of the design. See Black & Decker, Inc. v. Hoover Service Center, 886 F.2d 1285, 1292 (Fed. Cir. 1989); Stormy Clime Ltd. v. Progroup, Inc., 809 F.2d 971, 974 (2d Cir. 1987); J. Thomas McCarthy, McCarthy on Trademarks § 7.26[a] (1992). Thus, while functionality might be a defense which the defendants will raise in every jurisdiction, the court must first determine "secondary meaning" and "likelihood of confusion". As discussed above, the forums of the first-filed actions are better suited to determine these issues. Therefore, this Court will not bifurcate the issue of functionality.
The first-to-file rule, which places a strong presumption in favor of the first-filed suit, dictates that the New York actions be dismissed in favor of the forums of the first-filed actions. This is especially the case where, as in the instant case, there are no special circumstances which justify allowing the second-filed suit to proceed, and where there is no balance of convenience which suggests that this Court allow the second-filed actions to proceed. Accordingly, the Court grants the motions to dismiss. Lyons may file its claims as compulsory counterclaims in the respective districts of the first-filed actions.
Shira A. Scheindlin
Dated: New York, New York
April 6, 1995