Pecorino v. Vutec Corp., 11-CV-6312 (ADS)(ARL)

• Court: United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
• Writing for the Court: ARTHUR D. SPATT
• Parties: PHILLIP A. PECORINO, ALDO MEDAGLIA, and SHEWARD & SON & SONS d/b/a VISIONART, Plaintiffs, v. VUTEC CORPORATION, and FARRALANE LIGHTING AUDIO AND VIDEO SYSTEMS, INC., Defendants.
• Docket Number: 11-CV-6312 (ADS)(ARL)
• Decision Date: 30 November 2012

PHILLIP A. PECORINO, ALDO MEDAGLIA, and SHEWARD & SON & SONS d/b/a VISIONART, Plaintiffs,
v.
VUTEC CORPORATION, and FARRALANE LIGHTING AUDIO AND VIDEO SYSTEMS, INC., Defendants.

11-CV-6312 (ADS)(ARL)

UNITED STATES DISTRICT COURT EASTER DISTRICT OF NEW YORK

Date: November 30, 2012

MEMORANDUM OF DECISION AND ORDER

APPEARANCES:

LEASON ELLIS LLP
Attorneys for the Plaintiffs
One Barker Avenue
By: Cameron Sean Reuber, Esq.
Jordan Grant Garner, Esq.
Melvin C. Garner, Esq., Of Counsel

HARRINGTON, OCKO & MONK, LLP
Attorneys for the Defendants
By: Kevin J. Harrington, Esq.
John Terrence A. Rosenthal, Esq., Of Counsel

SPATT, District Judge.

The Plaintiffs Philip A. Pecorino, Aldo Medaglia, and Sheward & Son & Sons, d/b/a Visionart ("Visionart") commenced this action for infringement of United States Patent No. 5,264,765 ("the '765 Patent") under the patent laws of the United States, 35 U.S.C. § 101 et seq. Presently before the Court are two motions filed by the Defendants to transfer venue to the

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Southern District of Florida pursuant to 28 U.S.C. § 1404(a) and/or to dismiss the complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Fed. R. Civ. P. 12(b)(6)" or "Rule 12(b)(6)"). For the reasons set forth below, the motion to transfer venue is denied and the motion to dismiss is granted in part and denied in part.

I. BACKGROUND

The Plaintiffs Philip A. Pecorino and Aldo Medaglia are residents of the State of New York and are the inventors and co-owners of the '765 Patent. The '765 Patent was issued on November 23, 1993, for an invention entitled "Video Display Screen Cover." (Compl. Ex. A.)

On October 17, 2005, Pecorino and Medaglia entered into a licensing agreement with Visionart, effective January 1, 2005. Visionart is a corporation organized and existing under the laws of the State of California, with its principal place of business in Cosa Mesa, California. Visionart is the exclusive licensee under the '765 Patent.

The Defendant Farralane Lighting Audio and Video Systems Inc. ("Farralane") is a corporation organized and existing under the laws of the State of New York, with its principal place of business in Farmingdale, New York. The Defendant Vutec Corporation ("Vutec") is a corporation organized and existing under the laws of the State of Florida, with its principal place of business in Pompano Beach, Florida. Vutec sells a variety of projection screen and related products, both nationwide and internationally. One such family of related products, which appears to be the basis for the instant litigation, is Vutec's ArtScreen™ line of products.

The complaint states that: (1) "Upon information and belief, Defendant Farralane has been distributing, offering for sale, leasing, and/or selling video display screen covers in this District, and throughout the United States, which the covers are made by Vutec." (Compl., at ¶ 17); (2) "Upon information and belief, the covers distributed, offered for sale, leased, sold,

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and/or offered for sale by Defendant Farralane are manufactured and supplied by Vutec." (Compl., at ¶ 18); (3) "Upon information and belief, Defendant Vutec has been manufacturing, distributing, offering for sale, licensing, leasing, and/or selling video display screen covers in this District, throughout the United States, and abroad. Such video display screens have been distributed and offered for sale and sold in this District through Defendant Farralane." (Compl., at ¶ 19); and (4) "Upon information and belief, Defendant Vutec's activities have been with knowledge of the '765 Patent and Plaintiffs' patent rights therein." (Compl., at ¶ 20.)

II. DISCUSSION

As set forth above, there are two pending motions to transfer pursuant to 28 U.S.C. § 1404(a) and/or to dismiss for failure to state a claim upon which relief may be granted pursuant to Rule 12(b)(6) filed by each of the Defendants. However, as the two Defendants are represented by the same attorney and have filed nearly identical motions, the Court will consider the merits of the two motions simultaneously.

A. As to the Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a)

1. Relevant Law

The Defendants' motions are made pursuant to 28 U.S.C. § 1404(a), which provides: "For 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." 28 U.S.C. § 1404(a); see generally Filmline (Cross-Country) Prods., Inc. v. United Artists, 865 F.2d 513, 520 (2d Cir. 1989). "[T]he purpose of the section is to prevent the waste 'of time, energy and money' and 'to protect litigants, witnesses and the public against unnecessary inconvenience and expense." Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S. Ct. 805, 809, 11 L. Ed. 2d 945

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(1964); Fuji Photo Film Co., Ltd. v. Lexar Media, Inc., 415 F. Supp. 2d 370, 372 (S.D.N.Y. 2006).

"In any motion to change venue, the movant bears the burden of establishing the propriety of transfer by clear and convincing evidence." Payless Shoesource, Inc. v. Avalon Funding Corp., 666 F. Supp. 2d 356, 362 (E.D.N.Y. 2009) (Spatt, J.); accord Ford Motor Co. v. Ryan, 182 F.2d 329, 300 (2d. Cir. 1950) cert. denied, 340 U.S. 851, 71 S. Ct. 79, 95 L. Ed. 624 (1950); Neil Bros. Ltd. v. World Wide Lines, Inc., 425 F. Supp. 2d 325, 327 (E.D.N.Y. 2006) (Spatt, J.); Excelsior Designs, Inc. v. Sheres, 291 F. Supp. 2d 181, 185 (E.D.N.Y. 2003) (Spatt, J.); Citibank, N.A. v. Affinity Processing Corp., 248 F. Supp. 2d 172, 176 (E.D.N.Y. 2003); Hernandez v. Blackbird Holdings, Inc., No. 01 Civ. 4561, 2002 WL 265130, at *1 (S.D.N.Y. Feb. 25, 2002). A motion to transfer venue requires a two-part inquiry: first, whether the action might have been brought in the transferee court; and second, whether transfer is appropriate considering the convenience of both the parties and the witnesses, and in the interest of justice. Fuji Photo Film, 415 F. Supp. 2d at 372; Berman v. Informix Corp., 30 F. Supp. 2d 653, 656 (S.D.N.Y. 1998).

In determining the latter part of this inquiry, courts apply nine factors: (1) the convenience of the parties; (2) the convenience of the witnesses; (3) the relative means of the parties; (4) the locus of operative facts and relative ease of access to sources of proof; (5) the availability of process to compel the attendance of witnesses; (6) the weight accorded to 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; and (9) trial efficiency and how best to serve the interests of justice, based on an assessment of the totality of material circumstances. N.Y. Marine and General Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d 102, 112 (2d Cir. 2010);

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Employers Ins. of Wausau v. Fox Entm't Group, Inc., 522 F.3d 271, 275 (2d Cir. 2008); D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 106-07 (2d Cir. 2006); Payless Shoesource, 666 F. Supp. 2d at 362-63; Laumann Mfg. Corp. v. Castings USA, Inc., 913 F. Supp. 712, 720 (E.D.N.Y. 1996). "Ultimately, '[t]he Court has broad discretion in balancing these factors." Payless Shoesource, 666 F. Supp. 2d at 363 (quoting Neil Bros. Ltd. v. World Wide Lines, Inc., 425 F. Supp. 2d 325, 328 (E.D.N.Y.2006) (Spatt, J.)); In re Cuyahoga Equip. Corp., 980 F.3d 110, 117 (2d Cir. 1992) ("Further, motions for transfer lie within the broad discretion of the district court and are determined upon notions of convenience and fairness on a case-by-case basis.").

2. Whether the Action Might Have Been Brought in the Transferee Court

The first relevant and necessary inquiry is whether the action might have been brought in the asserted transferee court, which in this case is the Southern District of Florida. See In re Hanger Orthopedic Group, Inc. Sec. Litig., 418 F. Supp. 2d 164, 168 n.3 (E.D.N.Y. 2006) ("A threshold inquiry is whether venue is proper in the transferee forum."). Venue in patent actions is governed by 28 U.S.C. § 1400(b), which provides 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." A corporate defendant such as Vutec or Farralane "reside[s] in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c).

Whether the district court in Florida has in personam jurisdiction over Vutec or Farralane depends on (1) whether jurisdiction exists under the law of Florida; and (2) whether a Florida court's exercise of personal jurisdiction over the two corporations comports with federal due

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process. See Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002).

Here, Vutec is a corporation organized and existing under the laws of the State of Florida, with its principal place of business in Pompano Beach, Florida. In addition, Vutec's other principal place of business is in Coral Springs, Florida, which is within...