Magnavox Co. v. APF Electronics, Inc.

• Decision Date: 15 May 1980
• Docket Number: No. 77 C 3159,78 C 4951 and 78 C 5041.,77 C 3159
• Citation: 496 F. Supp. 29
• Parties: The MAGNAVOX COMPANY, a corporation, and Sanders Associates, Inc., a corporation, Plaintiffs, v. APF ELECTRONICS, INC., a corporation, Unisonic Products Corp., a corporation, Executive Games, Inc., a corporation, Taito America Corporation, a corporation, Universal Research Laboratories, Incorporated, a corporation, Control Sales, Inc., a corporation, Venture Electronic International Ltd., a corporation, Jewel Companies, Inc., a corporation, Osco Drug, Inc., a corporation, Turn-Style, Inc., a corporation, Bennett Brothers, Inc., a corporation, and Jay-Kay Distributors, Inc., a corporation, Defendants. The MAGNAVOX COMPANY, a corporation, and Sanders Associates, Inc., a corporation, Plaintiffs, v. BALLY MANUFACTURING CORPORATION, a corporation, and Midway Manufacturing Co., a corporation, Defendants. The MAGNAVOX COMPANY, a corporation, and Sanders Associates, Inc., a corporation, Plaintiffs, v. FAIRCHILD CAMERA AND INSTRUMENT CORPORATION, a corporation, Montgomery Ward & Co., Incorporated, a corporation, and Sears, Roebuck & Co., a corporation, Defendants.
• Court: U.S. District Court — Northern District of Illinois

496 F. Supp. 29

The MAGNAVOX COMPANY, a corporation, and Sanders Associates, Inc., a corporation, Plaintiffs, v. APF ELECTRONICS, INC., a corporation, Unisonic Products Corp., a corporation, Executive Games, Inc., a corporation, Taito America Corporation, a corporation, Universal Research Laboratories, Incorporated, a corporation, Control Sales, Inc., a corporation, Venture Electronic International Ltd., a corporation, Jewel Companies, Inc., a corporation, Osco Drug, Inc., a corporation, Turn-Style, Inc., a corporation, Bennett Brothers, Inc., a corporation, and Jay-Kay Distributors, Inc., a corporation, Defendants.

The MAGNAVOX COMPANY, a corporation, and Sanders Associates, Inc., a corporation, Plaintiffs, v. BALLY MANUFACTURING CORPORATION, a corporation, and Midway Manufacturing Co., a corporation, Defendants.

The MAGNAVOX COMPANY, a corporation, and Sanders Associates, Inc., a corporation, Plaintiffs, v. FAIRCHILD CAMERA AND INSTRUMENT CORPORATION, a corporation, Montgomery Ward & Co., Incorporated, a corporation, and Sears, Roebuck & Co., a corporation, Defendants.

Nos. 77 C 3159, 78 C 4951 and 78 C 5041.

United States District Court, N. D. Illinois, E. D.

May 15, 1980.

COPYRIGHT MATERIAL OMITTED

Malcolm M. Gaynor, Schwartz, Cooper, Kolb & Gaynor, Howard S. Golden, Robbins, Coe, Rubinstein & Shafran, Marshall A. Burmeister, Burmeister, York, Palmatier, Hamby & Jones, Louis M. Rundio, Jr., McDermott, Will & Emery, Maurice P. Raizes, Robert Sternberg, Cohon, Raizes & Regal, Chicago, Ill., for defendants in No. 77 C 3159.

Theodore W. Anderson, James T. Williams, Neuman, Williams, Anderson & Olson, Chicago, Ill., for plaintiffs.

Donald L. Welsh, A. Sidney Katz, William K. Konrad, Fitch, Even & Tabin, Chicago, Ill., for defendants in No. 78 C 4951.

John H. Moore, Robert M. Ward, Granger Cook, Jr., Cook, Wetzel & Egan, Alan Brothers, Chicago, Ill., Gerald P. Grace, Oak Park, Ill., for defendants in No. 78 C 5041.

Charles F. Pigott, Jr., George H. Gerstman, Chicago, Ill., for defendants in Nos. 77 C 3159 and 78 C 5041.

MEMORANDUM OPINION AND ORDER

CROWLEY, District Judge.

Currently pending before the Court are three patent infringement actions, 77 C 3159, 78 C 4951 and 78 C 5041, involving United States Letters Patent 3,659,284 and Re. 28,507. In each of the actions, plaintiffs are The Magnavox Company (Magnavox) and its licensor, Sanders Associates, Inc. (Sanders). Defendants are fourteen corporations. Jurisdiction is invoked under 28 U.S.C. § 1338(a).

Plaintiffs charge all defendants with patent infringement by making, using, selling and offering for sale television gaming apparatus which incorporate the subject matter of Letters Patent 3,659,284 and Re. 28,507. In 78 C 4951 and 78 C 5041, the complaints also contain allegations of induced and contributory infringement. Further, plaintiffs make references to two distinct settlement agreements resulting from prior litigation of the same patent. One of the agreements involved Bally Manufacturing Corporation (Bally) and its subsidiary, Midway Manufacturing Company (Midway); the other was an agreement made with Sears, Roebuck & Co. (Sears) in a different action.

Several motions arising from the three cases are now before the Court. Plaintiffs moved to consolidate the actions under Fed. R.Civ.P. 42(a). Fairchild moved for a change of venue to the Northern District of California, 28 U.S.C. § 1404(a), to sever Sears, to strike paragraphs 10, 11 and 12 of the complaint in 78 C 5041 and to file more than twenty interrogatories. Sears made a motion to sever and stay.

Motion to Consolidate

The motion to consolidate is governed by Fed.R.Civ.P. 42(a) which provides:

When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delays.

The determination of whether consolidation is appropriate lies within the discretion of the trial court. Madigan, Inc. v. Goodman, 57 F.R.D. 512, 514 (N.D.Ill.1972); American Photocopy Equip. Co. v. The Fair, Inc., 35 F.R.D. 236, 237 (N.D.Ill.1963).

Defendants' major opposition to the motion to consolidate is that issues of validity and non-infringement require separate determinations because the challenged devices are distinct. Thus, they argue, the relationship between each device, the prior art and patent claims must be examined. In addition, defendants claim that consolidation will infringe certain defendants' right to a jury trial; that the consent judgments will prejudice the defendants that were not parties to the earlier litigation; and that confusion and prejudice may result. Bally and Midway also argue that their counterclaim for breach of contract involves different issues and that they will be prejudiced because of delayed discovery proceedings.

Defendants' arguments mainly address issues of whether the actions should be consolidated for trial. Rule 42(a), however, also contemplates consolidation for purposes of particular segments of the litigation, such as pretrial proceedings. See Fritsch v. District Council No. 9, 335 F.Supp. 854, 856 (S.D.N.Y.1971); 5 Moore's Federal Practice ¶ 42.02 (2d ed. 1979).

The existence of common questions of law and fact is a prerequisite for any consolidation. In these cases, each defendant is charged with infringing a valid patent. Thus, the validity of the patent is an issue relevant to each defendant. Although defendants contend that each device entails an individual determination of infringement, some of them are similar enough that those questions will be the same. Moreover, the resolution of the issues of validity and infringement require inquiries into the prior art, Electronic Assistance Corp. v. City of New York, 362 F.Supp. 755, 757 (S.D.N.Y.1973), which defendants assert as a defense.

Defendants' arguments concerning the right to a jury trial and the possibility of prejudice, although meritorious, are precipitous. Should a need arise to sever certain parties or issues at a later stage of the litigation, Fed.R.Civ.P. 42(b) provides an appropriate remedy.

There is no indication that any defendant will be prejudiced by pretrial consolidation. On the other hand, pretrial consolidation will prevent duplicative efforts by the Court and counsel. Since the same patent is at issue in each of the actions, it is probable that the same documents and technical drawings will be solicited from plaintiffs. It is also likely that defendants will want to depose the same persons. Thus, efficiency will be promoted by co-ordinating discovery. Common briefing and hearing schedules can be set which will facilitate the supervision of discovery, and eliminate the need to consider like arguments more than once.

The defendants in causes 78 C 4951 and 78 C 5041 will not be prejudiced by delayed discovery. The earliest suit was filed in 1977. However, discovery was largely confined to the issue of proper venue for two of the defendants. Thus, it was not until a few days before the later actions commenced that discovery on the substantive issues was ordered. Further, Bally and Midway, the proponents of this argument, have already been involved in litigation relating to this patent.

Consolidation for the purpose of pretrial proceedings will promote efficiency, and will not delay the trial or prejudice any of the parties. Accordingly, plaintiffs' motion to consolidate 77 C 3159, 78 C 4951 and 78 C 5041 is granted without prejudice to defendants to renew their objections before trial.

Fairchild's Motion for a Change of Venue and to Transfer

Fairchild Camera and Instrument Corp. (Fairchild) has moved for a change of venue and transfer to the Northern District of California under 28 U.S.C. § 1404(a).

Section 1404(a) presupposes proper venue in the district in which the action is pending, but permits the court, in its discretion, to transfer an action to any district where it could have been brought for the convenience of parties and witnesses and in the interest of justice.

Undisputedly, venue is proper here. See 28 U.S.C. § 1400(b). The propriety of transfer, then, depends on the plaintiff's choice of forum, access to sources of proof, availability of compulsory process, the expense of obtaining witnesses and the condition of the courts' calendars. Spound v. Action Industries, Inc., 369 F.Supp. 1066, 1068 (N.D.Ill.1974); Molex Products Co. v. AMP, Inc., 168 U.S.P.Q. 78 (N.D.Ill.1970). In addition, consideration must be given to society's interest in the efficient administration of justice. Butterick Co. v. Will, 316 F.2d 111, 113 (7th Cir. 1963); Admiral Corp. v. Columbia Broadcasting System, Inc., 161 U.S.P.Q. 123, 126 (N.D.Ill.1969); Briggs v. Gould-National Batteries, Inc., 272 F.Supp. 186, 187 (N.D.Ill.1967).

Fairchild argues that all of these factors weigh in its favor and that while transfer would cause only slight inconvenience to plaintiffs, it would greatly benefit Fairchild. Fairchild states, by affidavit, that all of its potential witnesses who have knowledge of the design and marketing of the television games reside in California where the corporate headquarters are located and where the accused products are assembled; that all records relevant to its video products are located there; that travel to Chicago would be expensive and inconvenient for the witnesses and disrupt the normal function of its business.

Although Magnavox and Sanders have their principal places of business in New York and New Hampshire, respectively, Magnavox's games involving the patent were designed and engineered at a plant in Fort Wayne, Indiana. The personnel connected with the engineering efforts are now located in Knoxville, Tennessee, a location somewhat closer to Chicago than to California. Similarly, the inventor of the patented device and his...