United States District Court, S.D. New York
[Copyrighted Material Omitted]
Gloria Tsui-Yip, Howard Charles Miskin, Miskin & Tsui-Yip LLP, New York, NY, for Plaintiff.
Brian Roy Socolow, Loeb & Loeb LLP, New York, NY, Ivy Mara Choderker, Lewis Anten, Lewis Anten, A Professional Corporation, Encino, CA, for Defendants.
ALISON J. NATHAN, District Judge.
Plaintiff CYI, Inc. (" CYI" ) filed this action on March 26, 2012 against Defendants Ja-Ru, Inc. (" Ja-Ru US" ), Michaels Stores, Inc. (" Michaels" ), and Michaels Stores Procurement Company, Inc. (" MSPC" ). On June 4, 2012, Defendants moved to transfer this action to the United States District Court for the United States District Court for the Middle District of Florida. On August 13, 2012, CYI amended its Complaint to, inter alia, add an additional Defendant, Ja-Ru (HK), Ltd. (" Ja-Ru HK" ), and to accuse an additional design of the packaging of infringement. The Court allowed the parties to submit supplemental letter briefing to address the impact of the amendment on the motion to transfer. For the reasons stated herein the Court GRANTS the Motion to Transfer.
The Amended Complaint alleges that in 2010 and in 2011, CYI developed and began marketing two toy rockets with distinctive appearance and packaging. (Am. Compl. ¶¶ 15-25). CYI brings a number of claims against the Defendants connected with the Defendants marketing of two rocket toys beginning in approximately March 2012 that CYI, in essence, contends are confusingly similar to the toys that it has marketed. (Am. Compl. ¶¶ 33-40, 48-56). CYI asserts claims for infringement of trade dress (Counts I & II); indirect and contributory infringement of trade dress (Counts III & IV); federal unfair competition grounded in passing-off and unprivileged imitation (Counts V & VI); and state law claims for unfair competition, intent to deceive, deceptive acts and practices, and tortious interference with business relationships (Counts VII, VIII, IX).
A motion to transfer involves two inquiries: (1) whether the action could have been brought in the proposed transferee district, in this case the Middle District of Florida, and (2) whether transfer is warranted for the convenience of the parties and witnesses, in the interest of justice. See 28 U.S.C. § 1404(a); New York Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d 102, 112 (2d Cir.2010); Herbert v. Elec. Arts, Inc., 325 F.Supp.2d 282, 285 (S.D.N.Y.2004). The party seeking to transfer a case carriers the burden of making out a strong case for transfer, and courts evaluate such motions under a clear and convincing evidence standard in determining whether to exercise discretion to grant a transfer motion. New York Marine & Gen. Ins. Co., 599 F.3d at 113-14.
Here, the parties do not dispute that this case could have been brought in the
Middle District of Florida (Def. Mot. at 9-10; Pls. Opp. at 8). The question before the Court is, therefore, whether transfer is appropriate under the circumstances. Courts considering this question have examined a number of factors including (1) the plaintiff's choice of forum, (2) the convenience of witnesses, (3) the location of relevant documents and relative ease of access to sources of proof, (4) the convenience of parties, (5) the locus of operative facts, (6) the availability of process to compel the attendance of unwilling witnesses, and (7) the relative means of the parties; (8) the comparative familiarity of each district with the governing law; and (9) judicial economic and the interests of justice. Id. at 112; Tomjai Enters., Corp. v. Laboratorie Pharmaplus U.S.A., Inc., 2012 WL 3104891, at *5-7, 2012 U.S. Dist. LEXIS 107033, at *12-20 (S.D.N.Y. July 29, 2012).
A. Locus of Operative Facts
" The locus of operative facts is a primary factor in determining whether to transfer venue." Tomjai Enters., 2012 WL 3104891, at *6, 2012 U.S. Dist. LEXIS 107033, at *17 (quotation marks omitted); Am. S.S. Owners Mut. Prot. & Indem. Ass'n v. Lafarge N. Am., Inc., 474 F.Supp.2d 474, 485 (S.D.N.Y.2007) (looking to the location of the " center of gravity" in the case in assessing this factor).
An oft-repeated rule in cases of trademark infringement, dilution, or unfair competition, is that the locus of operative facts is the initially chosen forum if acts of infringement, dilution, or unfair competition occurred in that forum. Tomjai Enters., 2012 WL 3104891, at *6, 2012 U.S. Dist. LEXIS 107033, at *17; ESPN, Inc. v. Quiksilver, Inc., 581 F.Supp.2d 542, 549 (S.D.N.Y.2008) (collecting cases and noting that " an argument regarding where alleged infringing trademarks were developed, designed, marketed or sold is simply not germane in regard to the locus of operative facts" ); NBA Props., Inc. v. Salvino, Inc., 2000 WL 323257, at *3-4, 2000 U.S. Dist. LEXIS 3799, at *9-11 (S.D.N.Y. Mar. 27, 2000). Courts following this rule have suggested that the location of consumer confusion is reflective of the locus of operative facts in such cases. See Ontel Prods. v. Project Strategies Corp., 899 F.Supp. 1144, 1154 (S.D.N.Y.1995); cf. French Transit v. Modern Coupon Sys., 858 F.Supp. 22, 25 (S.D.N.Y.1994) (" In trademark infringement claims, the actionable wrong takes place both where infringing labels are affixed to the goods and where confusion of purchasers is likely to occur." ). Here, Defendants concede there have been sales in New York and CYI has purchased at least one accused product in this district. (Selevan Aug. 23 Decl. ¶ 9; see also Tsui-Tip Decl. ¶¶ 2-9).
Defendants urge the Court that the claims in this action are, at core, for infringement of trade dress and that the above rule is wholly inapplicable. (Mot. at 16). Instead, they argue, infringement of trade dress is more akin to infringement of a design patent or a copyright, in which the operative facts relate to the design, development, and production of an infringing product. (Mot. at 16); cf. AEC One Stop Group, Inc. v. CD Listening Bar, Inc., 326 F.Supp.2d 525, 530 (S.D.N.Y.2004) (explaining, in copyright case, that " [t]he operative facts in infringement cases usually relate to the design, development and production of an infringing product" but also that for unfair competition, the locus of operative facts is the initial forum if that is where the acts of unfair competition occur); Invivo Research v. Magnetic Resonance Equip. Corp., 119 ...