United States District Court, S.D. New York
August 6, 2004.
I CREATE INTERNATIONAL, INC., Plaintiff,
MATTEL, INC. AND FISHER PRICE, INC., Defendants.
The opinion of the court was delivered by: JOHN KEENAN, Senior District Judge
OPINION and ORDER
Plaintiff brings claims for patent infringement, breach of
contract, and unfair competition. Before the Court is defendants'
motion to transfer this action, pursuant to 28 U.S.C. § 1404(a),
to the Western District of New York.
A. The Parties
Plaintiff is a New Jersey corporation that consists of
president/director/sole shareholder Steven Campanella and
vice-president Donna Campanella, Steven Campanella's wife.
Declaration of Steve Campanella ¶¶ 1-2. Plaintiff's only place of
business is at Steven Campanella's home in Middletown, New
Jersey. Id. ¶ 2.
Defendant Mattel, Inc. ("Mattel") is a Delaware corporation
with its principal place of business in El Segunda, California.
Affidavit of Jeffrey Miller ("Miller Aff.") ¶ 7. Defendant
Fisher-Price, Inc. ("Fisher-Price"), a wholly-owned subsidiary of
Mattel, is a Delaware corporation with its principal place of
business in East Aurora, New York. Id. ¶¶ 5-6.
B. The Suit and the Instant Motion
John Campanella, the brother of Steven Campanella, is the
inventor of an "Interactive Children's Game" that has been
designated U.S. Patent No. 5,829,985. Declaration of John
Campanella ¶¶ 2-3 John Campanella assigned this patent to plaintiff. Id. ¶ 2. Plaintiff alleges that, through the product
development firm PDQ Product Development LLC ("PDQ"), plaintiff
obtained non-disclosure agreements from, and presented drawings
and a prototype of a toy based on the patent to, several toy
companies, including defendants. Complaint ("Cplt.") ¶¶ 8-12.
According to plaintiff, defendants have manufactured and sold a
product, the Magna Doodle Doodle Talker ("the Talker"), that
infringes plaintiff's patent. Id. ¶ 19. Such infringement,
plaintiff contends, violates the non-disclosure agreement and
constitutes unfair competition. Id. ¶¶ 25, 33.
Arguing that all decisions concerning the marketing, design,
product development, and consumer relations relative to the
Talker were made and continue to be made in East Aurora, New
York, that all relevant documents are maintained at Fisher-Price
headquarters in East Aurora, New York, and that all employees
involved with marketing, design, product development, and
consumer relations regarding the Talker are located in East
Aurora, New York, defendants have moved to transfer venue to the
Western District of New York, in which district East Aurora is
located. Defendants' Memorandum of Law at 2-3; see Miller Aff.
¶¶ 9-14; Affidavit of Vladimir Buzga ¶¶ 9-13. Mattel consents to
venue in the Western District of New York. Defendants' Reply
Memorandum of Law at 5 n. 1.
Plaintiff contends that, because it does not generate any significant income, a change of venue to the Western District of
New York would make continuance of this litigation financially
impossible. Plaintiff's Memorandum of Law ("Pl. Mem.") at 3.
Indeed, plaintiff claims to have selected the Southern District
of New York as the least expensive, most easily accessible court
for plaintiff and plaintiff's potential witnesses. Id. at 2.
These witnesses include representatives and employees of PDQ, the
offices of which are in New Jersey and in New York City, and a
former employee of PDQ who resides in New Jersey. Id. at 3-4.
Plaintiff also argues that all documents related to the patent
are located at plaintiff's place of business in New Jersey or at
the office of plaintiff's attorney in New York City. Id. at 5.
In addition, based on three listings for job openings in New York
City that were posted on Fisher-Price's website, plaintiff
contends that the Talker must have been designed, at least in
part, in the Southern District of New York. Plaintiff's
Supplemental Memorandum of Law at 2-4. Finally, plaintiff
contends that even if defendants had designed, developed and
marketed the Talker in East Aurora, New York, the non-disclosure
agreement was signed and the breach of contract occurred in the
Southern District of New York. Pl. Mem. at 8-9.
"Venue refers to locality; it concerns the forum where a
lawsuit may be brought and judicial authority exercised."
Rocket Jewelry Box, Inc. v. Noble Gift Packaging, Inc., 869 F. Supp. 152,
154 (S.D.N.Y. 1994) (citing 15 Wright, Miller & Cooper,
Federal Practice & Procedure: Jurisdiction 2d § 3801). Unlike
subject matter jurisdiction, venue is a "personal privilege"
that a party may waive. Leroy v. Great W. United Corp.,
443 U.S. 173, 180 (1979); see RC Entertainment, Inc. v.
Rodriguez, No. 98 Civ. 8585 (BSJ), 1999 WL 777903 at *2
(S.D.N.Y. Sept. 29, 1999). In addition, a court may transfer a
case from one district court to another, even if venue in the
original location is proper: "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. § 1404(a). On a motion to
transfer venue, a court must decide whether the action could have
been brought in the transferee forum, and whether the convenience
of the parties and the interests of justice warrant transfer.
See Millennium, L.P. v. Hyland Software, Inc., No. 03 Civ.
3900 (DC), 2003 WL 22928644 at *2 (S.D.N.Y. Dec. 10, 2003);
Savoy Owners Assocs., Inc. v. The Ins. Corp., No. 02 Civ. 6145
(JFK), 2003 WL 941098 at *1 (S.D.N.Y. Mar. 6, 2003).
Courts weigh a number of factors in determining whether a
transfer serves the convenience of the parties and the interests
of justice. These factors include (1) the locus of operative
facts, (2) the convenience of witnesses, (3) the convenience of parties, (4) the location of relevant documents and ease of
access to sources of proof, (5) the availability of process to
compel attendance of unwilling witnesses, (6) the relative means
of the parties, (7) the transferee forum's familiarity with
governing law, (8) the weight accorded plaintiff's choice of
forum, and (9) trial efficiency and the interests of justice,
based on the totality of the circumstances. See 800-Flowers,
Inc. v. Intercont'l Florist, Inc., 860 F. Supp. 128, 133
(S.D.N.Y. 1994); see also Hyland, 2003 WL 22928644 at *2;
Savoy Owners, 2003 WL 941098 at *1. No single factor is
determinative, and a court's discretion will not be overturned on
appeal absent a clear showing of abuse. Hyland, 2003 WL
22928644 at *3 (citing, inter alia, In re Cuyahoga Equip.
Corp., 980 F.2d 110, 117 (2d Cir. 1992)); see Bristol-Myers
Squibb Co. v. Andrx Pharmaceuticals, LLC, No. 03 Civ. 2503
(SHS), 2003 WL 22888804 at *1 (S.D.N.Y. Dec. 5, 2003); Savoy
Owners, 2003 WL 941098 at *2. The moving party bears the burden
of making a "clear and convincing showing" that the balance of
convenience tips in its favor. Berman v. Informix Corp.,
30 F. Supp.2d 653, 656 (S.D.N.Y. 1998) (citations omitted).
A. The Action Could Have Been Brought in the Western District of
Under 28 U.S.C. § 1400(b), which governs patent infringement
cases, an infringement action "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." A corporation "reside[s] 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
(Fed. Cir. 1990) (holding that the definition of "reside" in
28 U.S.C. § 1391 (c) applies in patent infringement cases);
Wechsler v. Macke Int'l Trade, Inc., No. 99 Civ. 5725 (AGS),
1999 WL 1261251 at *3 (S.D.N.Y. Dec. 27, 1999) (applying the §
1391(c) definition of "resides" to § 1400(b)).
Where state law claims, such as breach of contract and unfair
competition, arise from the same nucleus of operative fact as a
federal claim, the doctrine of "pendent venue" comes into play.
See Hsin Ten Enter. USA v. Clark Enters., 138 F. Supp.2d 449,
462 (S.D.N.Y. 2000). Under this doctrine, a federal court
may hear a claim related to a properly venued federal claim even
if the related claim would not otherwise fulfill venue
Because Fisher-Price has its principal place of business in
East Aurora, New York, it is subject to personal jurisdiction
there and can be said to reside in the Western District of New
York. Whether venue is proper as to Mattel is an issue this Court
need not decide, as Mattel has consented to venue in the Western District of New York. Therefore, venue on the patent
claim is proper in the Western District of New York.
Plaintiff specifically brought its state law claims of breach
of contract and unfair competition before this court because
those claims were "raised with the substantial and related claim
under the Patent Laws." Cplt. ¶ 23, 31. Accordingly, these claims
arise out of defendants' alleged infringement of plaintiff's
patent. Because venue is proper on the patent claim in the
Western District of New York, the exercise of venue over the
state law claims in the Western District of New York is also
B. Transfer Is Warranted
1. Locus of operative facts
Of the nine factors listed above, the locus of operative facts
carries significant weight. Hyland, 2003 WL 22928644 at *5
("primary factor"); Lighting World, Inc. v. Birchwood Lighting,
Inc., No. 01 Civ. 4751 (BSJ), 2001 WL 1242277 at *3 (S.D.N.Y.
Oct. 16, 2001) ("most important" because it "informs the court's
analysis of several other factors"). In patent infringement
cases, the locus of operative facts is where the design,
development, and production of an allegedly infringing product
took place. Hyland, 2003 WL 22928644 at *5; Wechsler, 1999 WL
1261251 at *4. For a breach of contract claim, the place of
negotiation, execution, performance, and breach of the alleged contract are considered. PI, Inc. v. Quality Prods., Inc.,
907 F. Supp. 752, 757-58 (S.D.N.Y. 1995). Finally, the locus of
operative facts for an unfair competition claim "is in the
initial forum if the acts of infringement, dilution, or unfair
competition occur in that forum," but this factor only "weakly
favors" retaining a case when no other important events occurred
in the forum. Nabisco, Inc. v. Brach's Confections, Inc., No.
00 Civ. 5875 (AGS), 2000 WL 1677935 at *3 (S.D.N.Y. Nov. 8,
In this case, the Western District of New York is the locus of
operative facts because the Talker was allegedly designed,
developed, and marketed at the Fisher-Price headquarters in East
Aurora, because any breach of the alleged contract would have
occurred in East Aurora, and because, considering the foregoing,
the sale of the Talker in the Southern District of New York is
only a weak link between this forum and the unfair competition
claim. For all three of plaintiff's claims this factor strongly
2. Convenience of witnesses
"A party seeking to rely on the convenience of the witnesses
factor must identify the material witnesses and supply a general
description of what their testimony will cover." Mattel, Inc. v.
Procount Business Servs., No. 03 Civ. 7234 (RWS), 2004 WL 502190
at *4 (S.D.N.Y. Mar. 10, 2004) (citing Wechsler, 1999 WL
1261251 at *6). The significance of each witness's testimony is
more important than the number of witnesses in each district.
Hyland, 2003 WL 22928644 at *3. Greater weight is given to the
convenience of a non-party witness than a party witness, and
little weight is given to the convenience of witnesses outside
both the transferor and transferee districts. Royal Ins. Co. v.
Tower Records, Inc., No. 02 Civ. 2612 (PKL), 2002 WL 31385815 at
*5 (S.D.N.Y. Oct. 22, 2002) (citing Wechsler, 1999 WL 1261251
Neither party has provided a list of specific witnesses.
Defendants have indicated that all their witnesses are
Fisher-Price employees, who are thus party witnesses and who
reside and/or work in East Aurora. Plaintiff's witnesses include
non-party witnesses John Campanella and current and former PDQ
employees, and party witness Steven Campanella. It is unclear
where the current PDQ employees reside and at which PDQ office
they work. The former PDQ employee and John and Steven Campanella
all reside in New Jersey. Given this mixture of party and
non-party witnesses both within and without the contested
districts, this factor does not favor either party.
3. Convenience of the parties
To the extent that a transfer causes a mere shift of
inconvenience from one party to the other, this factor is
neutral. See Millennium, L.P. v. Dakota Imaging, Inc., No. 03
Civ. 1838 (RWS), 2003 WL 22940488 at *7 (S.D.N.Y. Dec. 15, 2003). Both parties here claim that the other party's favored forum will
cause some degree of inconvenience. This factor does not weigh in
favor of either party.
4. Location of relevant documents and ease of access to sources of
"[M]odern photocopying technology deprives this issue of legal
and practical significance." Savoy Owners, 2003 WL 941098 at
*3. However, the location of relevant documents is often the
locus of operative facts. See Dakota, 2003 WL 22940488 at *7.
This is especially true in patent cases, where the bulk of
evidence usually comes from the alleged infringer. Hyland, 2003
WL 22928644 at *4. Convenience to counsel, and consequently the
location of relevant documents at counsel's office, is not
considered. Bionx Implants, Inc. v. Biomet, Inc., No. 99 Civ.
740 (WHP), 1999 WL 342306 at *4 (S.D.N.Y. May 27, 1999).
In one view, this factor comes out neutral because neither
party would be significantly inconvenienced, in this age of fax
machines and Federal Express, to transport its documents to
either forum. Alternatively, this factor favors defendants
because all documents regarding the alleged infringement are in
the Western District of New York and only some of plaintiff's
documents are in the Southern District of New York, at the office
of plaintiff's counsel.
5. Availability of process to compel attendance of unwilling witnesses
The existence of non-party witnesses who can be compelled to
appear at trial in one district but not in the other is an
important consideration. See Berman, 30 F. Supp.2d at 658.
Plaintiff wishes to call non-party witnesses who reside in New
Jersey and who could be compelled to appear in this district but
not in the Western District of New York. Defendant's witnesses,
on the other hand, are employees of defendant who can be
compelled to testify in this district. However, plaintiff has not
shown that any of its non-party witnesses would refuse to appear
in the Western District of New York. Even if the witnesses were
to refuse, their testimony could be offered through depositions.
This factor therefore only slightly favors plaintiff.
6. Relative means of the parties
A "disparity of means" between the parties, when it exists, is
a consideration in determining venue. Hyland, 2003 WL 22928644
at *6. However, courts place less weight on this factor when both
parties are corporations. Royal Ins., 2002 WL 31385815 at *7;
About.com, Inc. v. Aptimus, Inc., No. 01 Civ. 2106 (AGS), 2001
WL 503251 at *3 (S.D.N.Y. May 11, 2001). Furthermore, even when
significant disparity of means does exist, courts exercise
considerable discretionary power over the location of depositions
and other matters that impact the financial burden a party must bear. Mill-Run Tours, Inc. v. Khashoggi, 124 F.R.D. 547, 550
(S.D.N.Y. 1989); see Fed. Deposit Ins. Co. v. La Antillana,
S.A., No. 88 Civ. 2670 (JFK), 1990 WL 155727 at *2 (S.D.N.Y.
Oct. 5, 1990). For example, the general presumptions that a
plaintiff is usually deposed in the district where plaintiff
initiated the action, and that a defendant is usually deposed in
defendant's district of residence may be overcome by affidavits
demonstrating in detail that the exigencies of a particular case
warrant a departure from the general presumptions. See 2
Michael C. Silberberg, Civil Practice in the Southern District
of New York § 17. 11-17.12 (2d ed. 2003) (citing cases).
Plaintiff, a corporation, represents itself as having limited
financial means and as being unable to pursue this action should
transfer to the Western District of New York be granted.
Defendants, on the other hand, are large multi-national
corporations. Should plaintiff find it difficult to go forward
with the litigation in the Western District of New York because
of the expense of litigating there, plaintiff may seek relief
from the transferee court by, for example, submitting a request
to hold depositions at the office of plaintiff's attorney.
7. Transferee forum's familiarity with governing law
"Patent law is federal law and `any district court may handle a
patent case with equal skill.'" Bristol-Myers, 2003 WL 22888804
at *4 (quoting Bionx, 1999 WL 342306 at *5). This factor is neutral.
8. Weight accorded plaintiff's choice of forum
"[U]nless the balance is strongly in favor of the defendant,
the plaintiff's choice of forum should rarely be disturbed."
Bristol-Myers, 2003 WL 22888804 at *4 (citations omitted).
However, that choice's importance is diminished when the Southern
District of New York "has only a tenuous connection to the
operative facts of the litigation." Id. at *5; see Hyland,
2003 WL 22928644 at *6; Lighting World, 2001 WL 1242277 at *4;
Berman, 30 F. Supp.2d at 659.
As established above, the locus of operative facts in this case
is the Western District of New York, and the connection between
the Southern District of New York and this case is tenuous at
best. Plaintiff's choice of forum, therefore, is not entitled to
9. Trial efficiency and the interests of justice
Docket conditions are not a particularly relevant
consideration, and, in any event, neither party has alleged that
either court would be burdened by this litigation. While the
Southern District of New York has little connection with this
action, the connection between this case and the Western District
of New York is strong. Trial efficiency and the interests of
justice therefore weigh in favor of transfer. IV. Conclusion
For the reasons set forth above, defendants' motion to transfer
venue is granted. The Clerk of the Court is directed to transfer
this case to the Western District of New York.
© 1992-2004 VersusLaw Inc.