The opinion of the court was delivered by: Honorable Richard J. Arcara Chief Judge
Currently before the Court is an appeal by defendant Target Technology Company, LLC ("Target"), from an order by Magistrate Judge Jeremiah J. McCarthy transferring venue to the Southern District of California. For the reasons stated, the appeal is granted, Magistrate Judge McCarthy's order is reversed and the motion to transfer venue is denied.
There are currently two related lawsuits pending simultaneously in two different district courts -- this action in the Western District of New York ("New York action") and an action in the Central District of California ("California action"). The issue before this Court is whether this New York action should be transferred to California. In order to address that issue, some background into the relationships of the parties and the procedural history of each case is required.
The key parties to both the New York action and the California action are identical. Williams Advanced Materials, Inc. ("Williams") is the plaintiff in the New York action and the primary defendant in the California action. Williams is a New York State corporation with its principal place of business in Buffalo, New York. Williams is a producer and supplier of metals and metal alloys, including "sputtering targets." Williams sells its "sputtering targets" to its customers who use them to manufacture Digital Video Discs ("DVDs").
Target is the primary defendant in the New York action and the plaintiff in the California action. Target is a Delaware corporation with its principal place of business in Irvine, California. Target is the owner of several patents which are directed to the use of silver-based alloys in the semi-reflective layer of DVDs.
The remaining parties to the lawsuits are the DVD manufacturers who purchase sputtering targets from Williams. Thirteen of those DVD manufacturers are being sued by Target in this action, and all of them (except one)*fn1 are also being sued by Target in the California action.*fn2
Prior to the commencement of litigation proceedings, Target had licensed three of its patents to Williams: United States Patent Nos. 6,007,889 ("'889 patent"), 6,280,811 ("'811 patent") and 6,451,402 ("'402 patent"). Pursuant to that license agreement, Williams produced silver-based sputtering targets and sold those sputtering targets to its customers (DVD manufacturers). Those DVD manufacturers then used the sputtering targets to create a silver-based semi-reflective layer of a DVD.
While the license agreement was still in effect, Target learned that Williams had developed a new product, "Sil-X". Target believed that "Sil-X" infringed on its existing patents. Target contacted Williams's customers and threatened suit if those customers used Sil-X in the manufacture of DVDs.
In response to those threats of litigation, Williams brought suit in the Western District of New York in April 2003. Williams sought a declaratory judgment against Target declaring the three licensed patents and a fourth patent, U.S. Patent No. 6,544,616 ("'616 patent"), invalid and unenforceable. Williams alleged that Target's patents were anticipated or made obvious by the prior art. Williams also asserted that Target had engaged in inequitable conduct before the Patent Trademark Office ("PTO") and alleged unfair competition under the Lanham Act and New York's General Business Law. Target brought counterclaims against Williams for patent infringement and breach of the license agreement.
Fearing that Target's threats of infringement would harm its business, Williams also moved for a preliminary injunction to enjoin Target from bringing suit against its customers. On August 12, 2004, this Court denied Williams's motion for a preliminary injunction.*fn3 The case was then ...