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MARSHALL GOBUTY INT'L USA, INC. v. NIKE

November 10, 2004.

MARSHALL GOBUTY INT'L USA, INC., Plaintiff,
v.
NIKE, INC, Defendant.



The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge

MEMORANDUM OPINION AND ORDER

Marshall Gobuty International USA, Inc. ("MGI") brings this suit against Nike, Inc. ("Nike"), alleging infringement of its patented cuff and sleeve design,*fn1 which MGI markets under the trade name "Handcuffs."*fn2 Nike and MGI exchanged letters*fn3 regarding Nike's proposed motion for a change of venue to the Central District of California.*fn4 Following a conference with the parties in which Nike made clear its intent to make the motion, I am treating these letters as if Nike has formally moved to transfer this action. For the following reasons, the motion to transfer is granted.

  I. LEGAL STANDARD

  Section 1404 provides: "For the convenience of the parties and witnesses, in the interests of justice, a district court may transfer any civil action to any other district or division where it might have been brought."*fn5 The defendant must make a "convincing showing" that the action would be better litigated elsewhere.*fn6 Relevant factors include the: (1) deference accorded to plaintiff's choice of forum; (2) convenience to witnesses and parties; (3) situs of operative facts; (4) interests of justice and judicial economy; (5) relative ease of access to sources of proof; (6) availability of process to compel unwilling witnesses; (7) relative means of the parties; and (8) forum's familiarity with the governing law.*fn7 Of these factors, plaintiff's choice of forum is usually given the greatest weight, but when the plaintiff is a nonresident and the operative facts bear little connection to the chosen forum, plaintiff's choice is shown less deference.*fn8

  II. DISCUSSION

  Because of Nike's extensive business activities in California,*fn9 MGI could have brought this action in the Central District of California.*fn10 For the reasons that follow, Nike has made a sufficiently convincing showing to justify transfer to that venue.

  A. Deference Accorded to Plaintiff's Choice of Forum

  Generally, a court should not disturb a plaintiff's choice of forum "unless the balance of the factors weighs strongly in favor of transfer."*fn11 However, where the "plaintiff sues in a forum which is neither its home nor has any ties to the controversy, plaintiff's choice is to be accorded less weight than would ordinarily be the case."*fn12 There is no dispute that MGI is a California corporation.*fn13 While MGI alleges that its principal place of business is in New York City,*fn14 Nike contends that "[a]ll of the evidence" indicates that MGI's principal place of business is in fact in Los Angeles, California.*fn15

  To support its argument, Nike offered the following exhibits: (1) a recent Dunn & Bradstreet report indicating that MGI has been based in Los Angeles since its inception; (2) a recent California Secretary of State search revealing that MGI's current mailing address and agent for service of process are in Los Angeles; (3) an excerpt from MGI's website — bearing a 2004 copyright — that calls MGI a "New Innovative LA-based Company"; and (4) two complaints — one from 2000 and the other from 2001 — in which MGI alleges that its principal place of business is Los Angeles.*fn16

  MGI's response to this evidence is unconvincing. MGI contends that it closed its California office in 1999 and no longer has employees there.*fn17 According to MGI, its mailing address in Los Angeles is merely that of its accountant.*fn18 This argument does not address the fact that since 1999 MGI has continued to hold itself out as a Los Angeles-based company both to consumers and the courts. In any case, by its own admission, MGI's principal place of business is certainly not New York. MGI contends that its managing shareholder, Marshall Gobuty, now resides in Israel, where he runs MGI's day-to-day operations.*fn19 MGI also represents that a large part of its business is run out of Toronto, Canada, where the company's books and corporate records are kept.*fn20 In light of these admissions, Mr. Gobuty's assertion that he maintains a business address for MGI in New York City is irrelevant.*fn21 While such contacts with New York City might make MGI a resident of New York for purposes of defending a law suit, they are insufficient to make the Southern District of New York MGI's home forum.*fn22

  Moreover, the Southern District of New York has no greater ties to the controversy than any other jurisdiction where Nike's allegedly infringing products are sold. While MGI's attorneys are located in New York City, the location of counsel is "not a consideration in the transfer analysis."*fn23 Therefore, MGI's choice of forum is entitled to very little weight.

  B. Convenience of the Witnesses

  In light of the diminished deference to be accorded MGI's choice of forum, the convenience of party and non-party witnesses becomes the most important consideration.*fn24 This factor favors transfer to the Central District of California. MGI intends to call only two witnesses, other than experts: Marshall Gobuty, who resides in Israel, and Patrick Lo, MGI's Vice President of Finance, who works and resides in Toronto.*fn25 Nike, on the other hand, asserts that it is "highly likely" that all of its own employee witnesses are located at its company headquarters in Portland, Oregon.*fn26 While New York is obviously more convenient to MGI's witnesses than Los Angeles, the distance they would already have to travel were the case to remain in New York suggests that a transfer to Los Angeles only modestly increases the inconvenience to them. Likewise, any Nike employee who testifies would have to resort to air travel, regardless of whether the action is located in New York or Los Angeles. The inconvenience to party witnesses of one forum or the other is, therefore, roughly the same.

  Nike has pointed out, however, that Los Angeles would be far more convenient for two potential non-party witnesses — the inventors of the patents-in-suit — who reside in Fresno, California. While the Court recognizes that Fresno is by no means next door to Los Angeles, the two cities are nonetheless within driving distance of one another. Testifying in Los Angeles would be considerably less burdensome for these witnesses. Moreover, as discussed in Part II.G infra, these ...


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