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Taylor v. Ishida Co., Ltd.

United States District Court, N.D. Texas, Dallas Division
May 31, 2002
Civil Action No. 3:02-CV-0402-D (N.D. Tex. May. 31, 2002)

Opinion

Civil Action No. 3:02-CV-0402-D

May 31, 2002


MEMORANDUM OPINION AND ORDER


In this patent infringement action, the court denies defendants' motions to dismiss, transfer, or stay the case. In doing so, however, the court advises the United States District Court for the Northern District of California — which has extensive prior knowledge and experience with the patent-in-suit, the technology, a related accused device, and the parties to this case — that it is willing to stay this case or transfer it for consolidation with a subsequently-filed suit that is now pending in that district.

I

Plaintiffs Alfred A. Taylor ("Taylor"), TNA North America, Inc. ("TNA-NA"), and TNA Australia Pty. Ltd. ("TNA-Australia") sue defendants Ishida Co., Ltd. ("Ishida") and Heat and Control, Inc. ("HC") alleging that they are liable for infringing U.S. Patent No. 4,663,917 (the `917 patent"), entitled "Packaging Apparatus." They maintain that defendants manufacture and/or distribute a vertical bag maker machine — the "Atlas" — that infringes the `917 patent. Plaintiffs filed this case on February 26, 2002. On April 4, 2002 Ishida and HC filed suit in the Northern District of California against Taylor and TNA-Australia seeking a declaratory judgment of non-infringement and invalidity (the "Second California Case"). Ishida moves to dismiss the instant suit under 28 U.S.C. § 1406 and Fed.R.Civ.P. 12(b)(3) for improper venue. As a component of its venue challenge, it maintains that the court lacks personal jurisdiction over it. Alternatively, Ishida moves to transfer this action to the Northern District of California under 28 U.S.C. § 1404 or to stay this litigation pending assignment of the Second California Case to Judge Jeremy Fogel, who presided over a 1998 declaratory judgment action involving Ishida and HC, as plaintiffs, and Taylor and TNA Australia as defendants (the "First California Case"). HC also moves to transfer the case under § 1404 or to stay it pending assignment of the Second California Case to Judge Fogel.

Ishida also moves under Rule 12(b)(5) to dismiss for insufficient service. In its reply brief, however, it concedes that it was served at least on May 7, 2002. See Ds. Rep. Br. at 7 n. 4. This motion therefore lacks merit and is denied.

The record reflects that the case was reassigned to Judge Fogel on May 1, 2002. See Ds. Rep. App. 1. To the extent that defendants seek a stay of this case only until the case is reassigned, that aspect of their motions is now moot. In their motions, however, they assert that the court should stay "this action pending the outcome of the California action." Ds. Br. at 23.

Ishida Co. v. Taylor, Civil Action No. C-98-20418-IF (N.D. Cal.),aff'd, 221 F.3d 1310 (Fed. Cir. 2000). Although there is an even earlier case between Ishida and Taylor, Ishida Co. v. Taylor, Civil Action No. C-96-4413 (N.D. Cal.), the court will refer to the 1998 lawsuit as the "First California Case."

Defendants have also filed a May 9, 2002 motion to strike and objections to evidence that plaintiffs have submitted, and plaintiffs have filed a May 10, 2002 motion for leave to file surreply. The court in deciding these motions either has not relied on evidence to which defendants object or has determined that the objections lack merit. Accordingly, the court denies the motion to strike and overrules the objections. Plaintiffs' May 10, 2002 motion for leave to file surreply is denied.

II A

Ishida first contends this case should be dismissed because venue is improper under 28 U.S.C. § 1400(b), which states that "[a]ny civil action for patent infringement 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." Plaintiffs have established, however, that this court has venue under § 1391(d). Ishida concedes that it is a Japanese corporation based in Kyoto, Japan. Ds. App. 6. "An alien may be sued in any district." 28 U.S.C. § 1391(d). This applies to foreign corporations in patent suits. See Brunette Mach. Works, Ltd v. Kockum Indus. Inc., 406 U.S. 706, 714 (1972) (holding in patent infringement suit against Canadian corporation that venue was governed by § 1391(d), not by § 1400(b)). The court denies Ishida's motion to the extent it is based on § 1400(b).

B

Ishida also asserts, however, that for venue to be proper under § 1400(b), as determined according to § 1391(c), Ishida must be subject to personal jurisdiction in the Northern District of Texas. See Ds. Br. at 8-10. Plaintiffs have in part responded to this argument as if it were a challenge to the court's personal jurisdiction over Ishida. See Ps. Br. at 10-12. Therefore, the court will decide whether it may exercise such jurisdiction.

Ishida also maintains that it was not properly served with process. The court rejects this contention for the reason stated supra at note 1.

1

Although Ishida cites the Federal Circuit's formulation for determining the existence of specific jurisdiction, see Ds. Br. at 9, both sides have briefed the personal jurisdiction issue based somewhat more extensively on Fifth Circuit jurisprudence, see Ds. Br. at 9; Ps. Br. at 10. This court applies Federal Circuit law, however, to determine whether personal jurisdiction can be exercised over an out-of-state defendant in a patent infringement case. See Hildebrand v. Steck Mfg. Co., 279 F.3d 1351, 1354 (Fed. Cir. 2002). "When analyzing personal jurisdiction for purposes of compliance with federal due process, Federal Circuit law applies." LSI Indus. Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1371 (Fed. Cir. 2000).

The determination whether a federal district court has personal jurisdiction over an out-of-state defendant is bipartite. The court first decides whether the defendant is amenable to process in the forum state. Id. If it is, the court then determines whether the exercise of personal jurisdiction complies "with the precepts of federal due process as delineated in [ International Shoe Co. v. Washington, 326 U.S. 310 (1945),] and its progeny." Id. Because the Texas long-arm statute extends to the limits of due process, the court need only consider whether exercising jurisdiction over Ishida would be consistent with the Due Process Clause of the Fifth Amendment. See Hollyanne Corp. v. TFT Inc., 199 F.3d 1304, 1307 (Fed. Cir. 1999) (holding that because Nebraska long-arm statute is coextensive with limits of due process, district court properly addressed whether assertion of jurisdiction over defendant was violation of due process under United States Constitution); Viam Corp. v. Iowa Export-Import Trading Co., 84 F.3d 424, 427 (Fed. Cir. 1996) (holding that because California long-arm statute extended reach of personal jurisdiction to limits of federal constitution, question presented was whether defendants had sufficient contacts to satisfy requirements of International Shoe).

The Due Process Clause at issue in this case is the Fifth Amendment. See Id. at 1375 n. 5 (citing Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1560 n. 1 (Fed. Cir. 1994)); but see Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1358 n.* (Fed. Cir. 1998) (noting that when federal court asserts personal jurisdiction based on state's long-arm statute, the Due Process Clause of the Fourteenth Amendment also comes into play). In the present case, plaintiffs effected service on Ishida via the Texas long-arm statute. See Compl. ¶ 13.

This prong of a personal jurisdiction analysis requires an inquiry into whether Ishida maintains sufficient minimum contacts with the forum state. LSI Indus., 232 F.3d at 1374. Ishida must have certain minimum contacts with Texas such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Id. at 1374-75. "In short, the Due Process Clause requires a court to determine whether a defendant `should reasonably anticipate being haled into court there.'" Id. at 1375 (footnote omitted) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).

"Under the `minimum contacts' test, a defendant may be subject to either specific jurisdiction or general jurisdiction. Specific jurisdiction `arises out of' or `relates to' the cause of action even if those contacts are "isolated and sporadic.'" Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73 (1985)). "General jurisdiction arises when a defendant maintains `continuous and systematic' contacts with the forum state even when the cause of action has no relation to those contacts." Id. (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984)). "`Random,' `fortuitous,' or `attenuated' contacts do not count in the minimum contacts calculus." Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1359 (Fed. Cir. 1998) (quoting Burger King, 471 U.S. at 475). "Similarly, contacts resulting from the `unilateral activity' of others do not count." Id. (quoting Burger King, 471 U.S. at 475 n. 17).

"Minimum contacts is a necessary, but not a sufficient, condition to finding personal jurisdiction." Viam, 84 F.3d at 429. "Once a plaintiff makes the required showing that there have been sufficient minimum contacts by the out-of-state defendant with the forum State, the defendant may still defeat jurisdiction by marshaling a compelling case against jurisdiction on the grounds that its exercise would be unreasonable, contrary to concepts of fair play and substantial justice." Id. "The inquiry under this test includes a balancing of (1) the burden on the defendant; (2) the interests of the forum state; (3) the plaintiff's interest in obtaining relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the interest of the states in furthering their social policies." Id. "[S]uch defeats of otherwise constitutional personal jurisdiction `are limited to the rare situation in which the plaintiff's interest and the state's interest in adjudicating the dispute in the forum are so attenuated that they are clearly outweighed by the burden of subjecting the defendant to litigation within the forum.'" Akro Corp. v. Luker, 45 F.3d 1541, 1549 (Fed. Cir. 1995) (quoting Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1568 (Fed. Cir. 1994)).

For purposes of determining jurisdiction, the court accepts as true the uncontroverted allegations of plaintiffs' complaint. See id. at 1543;Beverly Hills Fan, 21 F.3d at 1563 ("Since they are not controverted, plaintiff's factual allegations are taken as true for purposes of determining jurisdiction in the Virginia district court."). The court has located no case from the Federal Circuit that addresses how the evidence is to be assessed, and the burden of proof allocated, when the allegations are controverted. There is no reason to doubt, however, that the Federal Circuit would adopt a rule similar to that applied in the Fifth Circuit and hold that "[w]hen a court rules on a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, it must accept as true the uncontroverted allegations in the complaint and resolve in favor of the plaintiff any factual conflicts posed by the affidavits. Therefore, in a no-hearing situation, a plaintiff satisfies his burden by presenting a prima facie case for personal jurisdiction." Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999) (footnotes omitted).

For example, in Graphic Controls Corp. v. Utah Medical Products, Inc., 149 F.3d 1382 (Fed. Cir. 1998), the court pointed out in a footnote, with no apparent disapproval, that "[t]he district court noted that, because the parties had not conducted discovery on the jurisdictional issue, Graphic Controls only needed to make a prima facie showing that Utah Medical was subject to personal jurisdiction in New York." Id. at 1383 n. 1. It then stated in the succeeding footnote that, "[f]or purposes of the 12(b)(2) motion, the district court's task was to construe the pleadings and affidavits in the light most favorable to Graphic Controls." Id. at 1383 n. 2. In United States v. Ziegler Bolt and Parts Co., 111 F.3d 878 (Fed. Cir. 1997), which involved a challenge based on the procedural requirements for service of summons rather than on the absence of minimum contacts, the court held that, "[b]ecause the trial court decided Ziegler's motion without an evidentiary hearing, the Government had only to make a prima facie case of proper service in order to survive the motion." Id. at 880 (citing and quoting inter alia 2A James W. Moore, Moore's Federal Practice ¶ 12.07 [2.-2], at 12-70 (2d ed. 1996) ("If the district court chooses not to hold an evidentiary hearing, then the party asserting jurisdiction need only make a prima facie showing that jurisdiction exists . . . ."). And in J. Stephen Scherer, Inc. v. Ltee, 845 F.2d 1033 (Fed. Cir. 1988) (table), an unpublished opinion, the court assumed that the district court had correctly applied and followed Sixth Circuit procedure, which is similar to the Fifth Circuit. Before addressing its standard of review, the court recounted:

Under Sixth Circuit precedent, if the district court decides the issue of jurisdiction solely on the basis of written materials, the plaintiff should be required only to make a prima facie case of jurisdiction at that stage of the litigation. Under these circumstances the burden on the plaintiff is relatively slight and the pleadings and affidavits must be considered in the light most favorable to the plaintiff. In instances where the written submissions raise issues of credibility or disputed issues of fact which require resolution, the district court may conduct an evidentiary hearing. In such instances, the plaintiff must show by a preponderance of the evidence that jurisdiction exists. In the present case, the district judge concluded that the pleadings and affidavits raised no issues of material fact or credibility, and she decided the motion on the written submissions of the parties. Thus, plaintiffs were required only to make a prima facie showing of jurisdiction.
Id. at **1 (citations omitted).

2

With the relevant standards in mind, the court turns first to plaintiffs' complaint. They allege that defendants solicited business in the state of Texas, transacted business within the state, and/or derived financial benefit from the state directly related to the instant patent infringement cause of action and the infringing products. Compl. ¶ 13. They contend that defendants purposely availed themselves of the benefits and protections of Texas by establishing minimum contacts with this state. Id. at ¶ 14. Plaintiffs also allege, on information and belief, that defendants have offered for sale and are offering for sale in this district machines that infringe one or more claims of the `917 patent, id. at ¶ 15, and that defendants are involved in manufacturing, selling, importing, or distributing Atlas bag maker machines throughout the United States (including the Dallas/Fort Worth area) in competition with plaintiffs and are actively engaged in transacting such business in Texas and in the Northern District of Texas, id. at ¶¶ 26-29. They contend the Atlas bag maker machine infringes one or more claims of the `917 patent, id. at ¶ 28, and, on information and belief, that defendants have contracted for, sold, and/or shipped Atlas bag maker machines at various locations in the United States, including Hanover, Pennsylvania, that defendants have offered to sell and has sold the machines to customers in the United States, or have imported them into the United States, in violation of 35 U.S.C. § 271, and have shown the machine during at least one trade show in the United States, held in Chicago in February 2002, id. at ¶¶ 30, 34-36. Taken as true, these allegations establish that the court has personal jurisdiction over Ishida.

3

In response, Ishida has introduced evidence that controverts the material jurisdictional allegations of the complaint. An Ishida employee, Yasushi Yamaguchi ("Yamaguchi"), testified that Ishida has no offices in the United States and no contacts with the state of Texas (no accounts, not registered to do business, does not own property, does not employ anyone, does not pay taxes, does not manufacture products, does not directly sell products, and has not previously been involved in litigation). Ds. App. 6-7. It manufactures bag makers such as the Apex and Atlas in Shiga, Japan. Id. at 7. Its exclusive United States distributor, HC, purchases the bag makers from Ishida and imports them into the United States and resells them to customers in this country. Id. Ishida has not directed any allegedly infringing activities relating to the Atlas bag maker into the Northern District of Texas and has not brought an Atlas bag maker to this district. Id. at 7-8. No Ishida employee has made a visit on Ishida's behalf to the Northern District of Texas. Id. at 8. Tony Caridis ("Caridis"), the President of HC, testified that HC purchases Apex bag makers from Ishida, imports them from Japan, and resells them throughout the United States, and that the allegedly infringing Atlas bag makers have not been sold in Texas nor are any Atlas bag makers located in Texas. Id. at 2.

These denials are sufficient to controvert plaintiffs' pertinent jurisdictional allegations. The court must therefore turn to the record evidence to decide whether plaintiffs have presented a prima facie case of personal jurisdiction. Conflicts between their evidence and Ishida's, of course, are resolved in plaintiffs' favor.

4

Although the distinction between specific and general jurisdiction is helpful in some fact situations, the Federal Circuit has held that it is not useful when the court assesses personal jurisdiction under the stream of commerce theory. See Viam, 84 F.3d at 427. "The analytical tool useful in cases in which the defendant's contacts are the result of establishing a distribution network in the forum State for the sale of defendant's products is generally referred to as the `stream of commerce' theory." Id. Under this theory, "if the sale of a product of a manufacturer or distributor is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other states, it is not unreasonable to subject it to suit[.]" World-Wide Volkswagen, 444 U.S. at 297. "The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State." Id. at 297-98.

The relevant evidence in this case establishes the following. HC is Ishida's exclusive United States distributor of certain bag makers, including the Apex and the recently introduced accused device, the Atlas. Ds. App. 1-2. HC purchases bag makers from Ishida, imports them from Japan, and resells them throughout the United States. Id. at 2. Ishida itself conducts sales activities in the United States, and it supports HC's efforts to sell Ishida-manufactured products. Recently, in February 2002, Ishida and HC employees demonstrated the Atlas bag maker at the SNAXPO trade show in Chicago. See id. at 8. HC sells bag makers in Texas, and about 4% of its total U.S. sales volume of Apex bag makers was in the Northern District of Texas. Id. at 2. HC is preparing to purchase, import, and resell Ishida Atlas bag makers in the United States. Id. at 7. Frito-Lay, Inc. ("Frito-Lay"), headquartered in Texas, is by far the largest snack food supplier in the United States. Ps. App. 6. It owns almost 2,000 vertical form, fill, and seal machines. Companies that sell such machines to Frito-Lay North America must first obtain approval from its Texas headquarters and become a "qualified bag maker" before they can sell to Frito-Lay. Id.

This evidence, from the declaration of HC's President, appears, in the words of the Federal Circuit in Beverly Hills Fan, to be "craftily written." Beverly Hills Fan, 21 F.3d at 1563. Minimum contacts analysis is conducted according to contacts with the forum state, not the forum district court. Because there is record evidence of the significance of Frito-Lay's purchasing power in the bag maker market, and because Frito-Lay, Inc., although located near Dallas, is headquartered in the Eastern District of Texas, HC's evidentiary line drawing appears to be intended to reduce the extent of its Texas sales as a percentage of its volume of total United States sales. The court need not decide whether it is HC's purpose, however, because the evidence is otherwise sufficient for the court to exercise personal jurisdiction over Ishida.

In its reply brief, Ishida appears to ascribe significance to the fact that Frito-Lay is headquartered in the Eastern rather than the Northern District of Texas. See Ds. Rep. Br. at 5. But personal jurisdiction is based on minimum contacts with the state, not solely with a district within the state.

This evidence shows that Ishida placed its bag makers in the stream of commerce. It established a regular distribution channel via HC, its exclusive United States distributor, through which it purposefully directed its activities at Texas. These activities have been continuous and systematic. It is reasonably inferable that Ishida knew and intended that its exclusive United States distributor would sell Ishida bag makers in this state, where the largest snack food manufacturer has its headquarters. Four percent of HC's United States sales of one Ishida product — the Apex — were made, not merely in Texas, but in the Northern District of Texas. Sales of bag makers were not isolated occurrences, but arose from Ishida's efforts, through HC, to serve the Texas market. Additionally, HC's contacts with Texas on Ishida's behalf can be expected to continue in the immediate future with respect to the Atlas bag maker — the accused device. HC is preparing to purchase, import, and resell Ishida-made Atlas bag makers in the United States. The largest snack food supplier in the United States — who it can reasonably be inferred will be a principal potential customer — is located in Texas and makes its machine qualification decisions here. Ishida knows the likely destination of its products, and the conduct in which it and HC have engaged with this state have been such that Ishida should reasonably anticipate being brought into court here. These purposeful contacts with the state of Texas help ensure that Ishida had fair warning that its sales through HC might subject it to litigation in Texas. See Viam, 84 F.3d at 428-29; Beverly Hills Fan, 21 F.3d at 1565-66.

See discussion supra at notes 7 and 8.

These cases involve facts that distinguish them from the present case. In Beverly Hills Fan there was evidence that the accused device had arrived in the forum state through defendants' purposeful shipment.Beverly Hills Fan, 21 F.3d at 1565. In Viam the facts showed that the defendant-distributor advertised and sold in the forum state products that included the patent-in-suit held by the Italian manufacturer that it represented in the United States. Viam, 84 F.3d at 429. In the instant case, there is no evidence as yet that the Atlas bag maker has been sold in Texas. Nevertheless, the reasoning of these Federal Circuit stream of commerce decisions informs this court's disposition of Ishida's challenge to personal jurisdiction.

Accordingly, the court holds that it may constitutionally exercise personal jurisdiction over Ishida under stream of commerce principles.

Ishida does not contend that, despite the presence of minimum contacts, it would not comport with notions of fair play and substantial justice to exercise jurisdiction over it in this case. See Ds. Br. at 9-10; Ds. Rep. Br. at 6. Because Ishida has the burden of proof on this issue, see Akro, 45 F.3d at 1546 ("Where . . . the defendant argues that . . . the assertion of jurisdiction over his person fails to comport with notions of fair play and substantial justice, . . . the burden of proof is his."), the court need not address this component of the due process analysis.

III

Ishida moves in the alternative to transfer this case to the Northern District of California under § 1406(a). It contends the case should be transferred because the First California Case involves the same patent and substantially the same technology. Ishida argues that Judge Fogel, who presided in the First California Case and now has the Second California Case, is very familiar with the `917 patent and its prosecution history, has construed the claims of the patent, and has studied prior art references, and that transferring the case would eliminate the need for this court to familiarize itself with the same technology and issues and would best serve the interests of justice and judicial economy.

Section 1406(a) does not empower the court to grant the transfer that Ishida seeks. Section 1406(a) provides:

The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.

Because venue is not "wrong" in this district, § 1406(a) does not authorize this court to transfer the case to the Northern District of California.

IV

Defendants move (Ishida does so in the alternative) the court to transfer this case to the Northern District of California under § 1404(a) for the convenience of the parties and the witnesses. They argue that the first-to-file rule should be given no weight because plaintiffs improperly filed suit in Texas and that the convenience of the parties and witnesses favors a transfer.

The parties have presented extensive briefing and evidence concerning plaintiffs' alleged conduct at the February 2002 Chicago SNAXPO trade show that led them to assert that the Atlas bag maker infringes the `917 patent. The court need not address these arguments or this evidence.

A

Section 1404(a) provides that "[f]or 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." The decision to transfer is made to prevent waste of time, energy, and money and to protect litigants, witnesses, and the public against unnecessary inconvenience and expense. See Stabler v. N.Y. Times Co., 569 F. Supp. 1131, 1137 (S.D. Tex. 1983). The court considers several factors in their totality, including (1) plaintiff's choice of forum; (2) the availability of compulsory process for the attendance of unwilling witnesses; (3) the cost of obtaining the attendance of willing witnesses; (4) the accessibility and location of sources of proof, (5) the relative congestion of the courts' dockets; (6) the accessibility of the premises to jury view; (7) the relation of the community in which courts and the jurors are required to serve to the occurrence giving rise to the suit; and (8) the time, cost, and ease with which the trial can be conducted, and all other practical considerations relative to the trial and determination of the case. See Fletcher v. S. Pac. Transp. Co., 648 F. Supp. 1400, 1401 (E.D. Tex. 1986); Greiner v. Am. Motor Sales Corp., 645 F. Supp. 277, 278 (E.D. Tex. 1986).

The moving parties bear the burden of proving by a preponderance of the evidence that transfer is appropriate. See Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966). This requires a particularized showing regarding why transfer is necessary, including identification of key witnesses and the general content of their testimony. See Young v. Armstrong World Indus., Inc., 601 F. Supp. 399, 40 1-02 (N.D. Tex. 1984) (Sanders, J.). Plaintiff's choice of forum is entitled to substantial weight and should be highly esteemed. See Enserch Int'l Exploration, Inc. v. Attock Oil Co.,

656 F. Supp. 1162, 1167 n. 15 (N.D. Tex. 1987) (Fitzwater, J.).

Having considered the relevant factors, the court concludes that defendants have not demonstrated sufficient reasons to transfer this action based on § 1404(a). In particular, defendants have not shown that it is more convenient for both sides to litigate in California. TNA-NA is located here and Taylor and TNA-Australia would not find it materially more convenient to travel from Australia to the Northern District of California than from Australia to this district. And although it might be more convenient for Ishida and HC to litigate in California, the court may not transfer venue where the result will be merely to shift the burden of the trial from one side to the other. See id. Defendants have not demonstrated, as they contend, that the "overwhelming majority" of business records, documents, employees, and witnesses are located at the situs of HC's distribution facility in California. The accused device is manufactured in Japan by a Japanese company. Because this case is not transferable to Japan, the Northern District of California is not materially more convenient than is this forum. Nor is the court persuaded that the disruption of the daily activities of HC's key officers is sufficient to warrant the relief requested. The court therefore declines to transfer the case under § 1404(a). The court also denies defendants' alternative request that the court stay this case in deference to the Second California Case.

B

In denying defendants' motion, however, the court indicates its willingness to stay the present case, or to transfer it to the Northern District of California for consolidation with the Second California Case, if Judge Fogel determines that the litigation before him should go forward. This court can defer to a second-filed action when, as here, the judge in the subsequent case has extensive prior experience concerning the patent-in-suit. See Capitol Records, Inc. v. Optical Recording Corp., 810 F. Supp. 1350, 1354 (S.D.N.Y. 1992) ("To conduct such a trial the court must be educated on both the technology in general and the particular patents in suit. Judge Farnan's knowledge gained in the earlier Time Warner suit will allow a significant conservation of scarce judicial resources. In addition, his experience and familiarity with the patents reduces the possibility of a mistake at trial, and the consequent use of additional judicial resources to correct the problem."). The interests of justice strongly favor such a course when the judge who will preside over the case presided over another action that involves the same parties and the same patents and has developed a familiarity with the relevant technology. See id. at 1355. The record in the present case amply demonstrates that Judge Fogel has considerably more familiarity with the patent-in-suit, the technology, a related accused device, and these parties than does this court. The First California Case was litigated over a period of several years, Judge Fogel interpreted the `917 patent via a Markman hearing, and the Federal Circuit affirmed his judgment. Under such circumstances, there are compelling reasons for this court to yield to him.

Although the court recognizes that, as the court in which the first-filed case is pending, it could transfer the case based on the grounds described here, it will show respect for a coordinate court by making known its grounds for deferring to that court, but not transferring or staying this case without the coordinate court's consent.

The First California Case pertained to Ishida's Apex bag maker. The instant case, as noted, concerns Ishida's Atlas bag maker.

Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), aff'g Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc).

* * *

Accordingly, the court denies defendants' April 4, 2002 motions to dismiss, transfer, or stay, but advises the Northern District of California of its willingness to stay or transfer this case in deference to the case now pending there.


Summaries of

Taylor v. Ishida Co., Ltd.

United States District Court, N.D. Texas, Dallas Division
May 31, 2002
Civil Action No. 3:02-CV-0402-D (N.D. Tex. May. 31, 2002)
Case details for

Taylor v. Ishida Co., Ltd.

Case Details

Full title:ALFRED A. TAYLOR, et al., Plaintiffs, v. ISHIDA CO., LTD., et al.…

Court:United States District Court, N.D. Texas, Dallas Division

Date published: May 31, 2002

Citations

Civil Action No. 3:02-CV-0402-D (N.D. Tex. May. 31, 2002)

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