Neil Bros. Ltd. v. World Wide Lines, Inc.

• Decision Date: 04 April 2006
• Docket Number: No. 05-CV-1198 (ADS)(ATK).,05-CV-1198 (ADS)(ATK).
• Citation: 425 F.Supp.2d 325
• Parties: NEIL BROTHERS LIMITED, Plaintiff, v. WORLD WIDE LINES, INC., Aps Promotional Solutions, Inc. and John Does I-III, Defendants.
• Court: U.S. District Court — Eastern District of New York

425 F.Supp.2d 325

NEIL BROTHERS LIMITED, Plaintiff, v. WORLD WIDE LINES, INC., Aps Promotional Solutions, Inc. and John Does I-III, Defendants.

No. 05-CV-1198 (ADS)(ATK).

United States District Court, E.D. New York.

April 4, 2006.

Galgano & Burke, LLP, Hauppauge, NY (Daniel P. Burke, Thomas M. Galgano, Georgia Damoulakis, of Counsel) for the Plaintiff.

Pitney Hardin LLP, New York, NY (Marc A. Lieberstein, Liza Montalvo, Esq., of Counsel), for the Defendant World Wide Lines, Inc.

Berenato, White & Stavish, LLC, Bethesda, MD (Matthew Stavish, Esq., of Counsel), for the Defendant World Wide Lines, Inc.

Defendant APS Promotional Solutions, Inc., No Appearance.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

This case involves a patent dispute that arose between Neil Brothers Limited ("Neil Brothers" or the "plaintiff"), World Wide Lines, Inc. ("World Wide" or the "defendant"), and APS Promotional Solutions, Inc. ("APS") regarding the manufacture and sale of novelty drinking mugs that change in appearance when a hot liquid is poured into them. On January 21, 2006, the Court entered a default judgment against APS and referred the matter to United States Magistrate Judge James Orenstein to determine the amount of damages, including reasonable attorney's fees and costs.

Presently there are three motions before the Court: (1) the plaintiff's motion pursuant to Rule 15(a) of the Federal Rules of Civil Procedure ("Fed. R. Civ.P.") for leave to amend the amended complaint to add Photo USA Corp. as an additional plaintiff; (2) World Wide's motion pursuant to 28 U.S.C. § 1404(a) for an Order transferring this action to the Western District of Tennessee; and (3) World Wide's motion pursuant to Fed.R.Civ.P. 15(a) for leave to amend its answer to add an affirmative defense of inequitable conduct and a counterclaim for breach of contract.

I. BACKGROUND

This action was commenced on March 3, 2005. The facts of this case are fully set forth in the Court's prior Memorandum of Decision and Order which determined World Wide's motion pursuant to Fed. R.Civ.P. 12(b)(1) to dismiss for lack of subject matter jurisdiction. See Neil Bros. Ltd. v. World Wide Lines, Inc., 396 F.Supp.2d 340 (E.D.N.Y.2005). Familiarity with the allegations, facts, and defenses as set forth in that Memorandum of Decision and Order is presumed.

In sum, the plaintiff is the owner of two United States Patents. These are Patent No. 6,759,099 B2 (the '099 patent"), which is entitled "Decoration Method Using Thermochromic Ink," and was issued by the United States Patent and Trademark Office ("USPTO") on July 6, 2004. Also there is Patent No. 6,902,775 (the '775 patent") entitled "Decoration Method," which was issued by the USPTO on June 7, 2005. World Wide is the owner of United States Patent No. 6,281,165 (the "'165 patent") entitled "Thermochromatic Ink Covered Article Having Image Disposed Thereon and Method of Making the Same." The '165 patent was issued on August 28, 2001. Each of these patents describes a method for manufacturing a product that changes its appearance when heated.

The plaintiff alleges that the defendants are infringing the '099 and '775 patents by manufacturing and selling "color change mugs." In additional to seeking damages for the infringement of their patents, the plaintiff seeks a declaration that World Wide's '165 patent is invalid.

II. DISCUSSION

A. World Wide's Motion for a Change of Venue

A district court may transfer venue, in the interest of justice, "for the convenience of parties and witnesses." 28 U.S.C. § 1404(a). The movant bears the burden of establishing the propriety of transfer by clear and convincing evidence. Excelsior Designs, Inc. v. Sheres, 291 F.Supp.2d 181, 185 (E.D.N.Y.2003) (citing Ford Motor Co. v. Ryan, 182 F.2d 329, 330 (2d Cir.1950)); see also Hernandez v. Blackbird Holdings, Inc., No. 01 Civ. 4561, 2002 WL 265130, at *1 (S.D.N.Y. Feb.25, 2002). Furthermore, the movant must support its motion with a detailed factual affidavit. See Kiss My Face Corp. v. Bunting, No. 02 Civ. 2645, 2003 WL 22244587, *1 (S.D.N.Y. Sept. 30, 2003); Student Advantage, Inc. v. Int'l Student Exch. Cards, Inc., No. 00 Civ.1971, 2000 WL 1290585, *6 (S.D.N.Y. Sept.13, 2000).

In considering whether to grant a venue transfer, courts engage in a two-part test. The first question is whether the action "might have been brought" in the proposed transferee forum. Second, the Court must determine whether the transfer promotes convenience and justice. See Schertenleib v. Traum, 589 F.2d 1156, 1161 (2d Cir.1978); Invivo Research, Inc. v. Magnetic Resonance Equip. Corp., 119 F.Supp.2d 433, 436 (S.D.N.Y.2000). The parties do not dispute that this action could have been brought in the Western District of Tennessee. Thus, the sole inquiry before the Court with respect to this motion is whether convenience and the interests of justice support the transfer.

In making this determination, the Court is to consider the following factors: (1) convenience of the parties; (2) convenience of witness; (3) relative means of the parties; (4) locus of operative facts and relative ease of access to sources of proof; (5) attendance of witnesses; (6) the weight accorded the plaintiff's choice of forum; (7) calendar congestion; (8) the desirability of having the case tried by the forum familiar with the substantive law to be applied; (9) practical difficulties; and (10) how best to serve the interest of justice, based on an assessment of the totality of material circumstances. See, e.g., Kroll v. Lieberman, 244 F.Supp.2d 100, 102 (E.D.N.Y.2003); HD Brous & Co., Inc. v. Synthesys Secure Techs., Inc., 229 F.Supp.2d 191, 198 (E.D.N.Y.2002); Wine Markets Int'l Inc. v. Bass, 939 F.Supp. 178, 181 (E.D.N.Y. 1996); Modern Computer Corp. v. Ma, 862 F.Supp. 938, 948 (E.D.N.Y.1994). The Court has broad discretion in balancing these factors. See In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir.1992); Filmline (Cross-Country) Prods., Inc. v. United Artists Corp., 865 F.2d 513, 520-21 (2d Cir.1989).

The Court gives little weight to the alleged forum selection clause appearing in a patent license agreement signed by the parties in 1998, indicating that Tennessee courts are the "convenient venue." The defendants cite the following language from the license agreement in support of their argument that the case should be transferred to the Western District of Tennessee:

The parties hereby agree that the only proper and convenient venue and/or jurisdiction for any litigation between them, or any cause of action, claim, suit, or demand allegedly arising from or related to this Agreement or the relationship of the parties as evidenced by this Agreement, shall be in the Circuit Court of Tipton County, Tennessee, the Chancery Court of Tipton County, Tennessee, or the United States District Court for the Western District of Tennessee, West Division, sitting in Shelby County, Tennessee.

Although this language is sufficient to constitute a mandatory forum selection clause, see, e.g., Cronin v. Family Educ. Co., 105 F.Supp.2d 136 (E.D.N.Y.2000); GMAC Commercial Credit, LLC v. Dillard Dep't Stores, Inc., 198 F.R.D. 402, 404 (S.D.N.Y. 2001), World Wide admits that this agreement was terminated in 1998 shortly after it was executed. Therefore, this purported forum selection clause is not binding on the parties with regard to the current dispute.

1. The Convenience of the Parties

The logical relevant starting point in determining the convenience of the parties is their residence. In this regard, a transfer of venue should not merely shift the burden of inconvenience from one party to another. See, e.g., Merkur v. Wyndham In'tl, Inc., No. 00 CV 5843, 2001 WL 477268, at *4 (E.D.N.Y.2001) (citing Schieffelin & Co. v. Jack Co. of Boca, Inc., 725 F.Supp. 1314, 1322 (S.D.N.Y.1989)); Hernandez v. Graebel Van Lines, 761 F.Supp. 983, 988 (E.D.N.Y.1991). The plaintiff will be obligated to travel a great distance whether this action is heard in the Eastern District of New York or the Western District of Tennessee. The plaintiff is a British company with its principal place of business in Birmingham, Great Britain. World Wide is a Tennessee corporation with its principal place of business in Covington, Tennessee. Obviously, Tennessee is more convenient to the defendants. The remaining defendant, APS, is identified as a Florida corporation with its principal place of business in Jacksonville, Florida. However, APS is currently in default. Thus, if the action remains in New York, all remaining parties will be required to travel. World Wide will be relieved of this burden if the action is transferred to Tennessee. Accordingly, this factor weighs in favor of transferring this action to the Western District of Tennessee.

2. The Convenience of the Witnesses

The convenience of the witnesses is probably the single most important factor in the transfer analysis. See Intria Corp. v. Intira Corp., No. 00 Civ. 7198, 2000 WL 1745043, *2 (S.D.N.Y. Nov.27, 2000); Invivo Research, Inc. v. Magnetic Resonance Equip., 119 F.Supp.2d 433, 436 (S.D.N.Y. 2000). Because of the importance of this factor, the party seeking transfer "must clearly specify the key witnesses to be called and must make a general statement of what their testimony will cover." Royal & Sunalliance v. British Airways, 167 F.Supp.2d 573, 577 (S.D.N.Y.2001) (internal quotations and citation omitted). In considering the convenience of the witnesses, the Court should "not merely tally the number of witnesses who reside in the current forum in comparison to the number located in the proposed transferee forum. Instead, the Court must qualitatively evaluate the materiality of the testimony that the witnesses may provide." Herbert Ltd. P'ship v. Elec. Arts Inc., 325 F.Supp.2d 282, 286 (S.D.N.Y.2004); see also Millennium, L.P. v. Hyland Software, Inc., No. 03 Civ. 3900, 2003 WL 22928644, *3 (S.D.N.Y. Dec. 10, 2003).

The parties...