Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-03156/USCOURTS-cand-4_06-cv-03156-1/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MTS SYSTEMS CORPORATION, a Minnesota

corporation,

Plaintiff,

v.

HYSITRON, INCORPORATED, a Minnesota

corporation,

Defendant.

 /

No. C 06-3156 CW

ORDER GRANTING

DEFENDANT'S

MOTION TO

TRANSFER VENUE TO

MINNESOTA

Defendant Hysitron, Inc., moves for a transfer of venue to the

District of Minnesota. Plaintiff MTS Systems Corporation opposes

the motion. The matter was taken under submission on the papers. 

Having considered all of the papers filed by the parties, the Court

GRANTS Defendant's motion for a transfer of venue. 

BACKGROUND

 This patent infringement case arises out of Plaintiff's

allegations that Defendant's use, sale or offer to sell nanotensile

measuring devices infringes a claim or claims asserted in U.S.

Patent No. 6,679,124B2 (the '124 patent), owned by Plaintiff. 

Complaint ¶¶ 6-7. Both parties are Minnesota corporations with

their principal place of business in Eden Prairie, Minnesota. Id.

¶ 5; Eggers Decl. ¶ 2. 

The named inventor of the '124 patent, Warren C. Oliver, lives

and works for MTS Nano Instruments (MTS Nano), a subsidiary of

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United States District Court

For the Northern District of California

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Plaintiff, in Oak Ridge, Tennessee. Hay Decl. ¶ 5. All MTS Nano

employees are located in Oak Ridge, with the exception of its sales

associates. Id. ¶¶ 6, 8. MTS Nano has no personnel in Minnesota. 

Id. ¶ 8. "Virtually all key documents, materials, equipment

relating to the development, testing, research, production,

marketing and sales decisions regarding the MTS Nano's

nanomeasurement devices are located in Tennessee." Id. Plaintiff

anticipates calling as witnesses four MTS Nano officials, including

Mr. Oliver, who are based in Oak Ridge, Tennessee, as well as its

two Field Account Managers, Neal Gustafson and Bruce Anderson, who

are based in Carlsbad, California and Gig Harbor, Washington,

respectively. Id. ¶ 11. Plaintiff also anticipates that two third

parties may be called as witnesses: Cheryl Hayashi, an Assistant

Professor at the University of California, Riverside and George

Pharr, Professor and Chair of the Material Science Department at

the University of Tennessee in Knoxville. Id. ¶ 12. Plaintiff

also asserts that there are three additional third parties who are

potential customers and who live in the Northern District of

California. 

According to Michael Eggers, Director of Finance, Defendant

"has 58 employees worldwide, of which 55 are based in Minnesota,

including all of the product development and company management

personnel." Eggers Decl. ¶ 2. Defendant "designs, develops, and

manufactures all of its products at its facility in Eden Prairie,

MN." Id. ¶ 3. According to Mr. Eggers, Defendant's products

include only one "nanotensile measure device," the nanoTensile

5000. All of the design and development work for the nanoTensile

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5000 has occurred in Eden Prairie. Id. ¶ 5. All personnel

involved in the design and development of the nanoTensile 5000, as

well as all documents, materials and equipment, including

prototypes, are located at Defendant's Eden Prairie facility. Id.

¶ 5. These persons include Dehua Yang, inventor of the nanoTensile

5000, Fred Tsuchiya, Project Manager for the nanoTensile 5000's

development, and five other Hysitron employees who have been

involved in its development. Id. ¶¶ 13-19. 

 Defendant has "one employee in California, a sales

representative who covers the West Coast of the United States,

working from his home." Eggers Decl. ¶ 9. Bill Coney, the sales

representative, has not been involved in the development of the

nanoTensile 5000. Id. He resides "just outside of Sacramento." 

Beckwith Decl., Ex. A, Burkstrand Dep. 10:6-7. However,

Plaintiff's evidence shows that Mr. Coney has been involved in the

promotion of the nanoTensile 5000 in the Northern District of

California. 

Defendant maintained a booth at the "Material Research

Society" industry conference and trade show in San Francisco,

California, in April, 2006. Eggers Decl. ¶ 5. Prior to the

conference, Defendant had sent an email to its customer base

stating that the nanoTensile 500 "would soon be available." Id.

¶ 11. Defendant provided "a few" conference attendees with

application notes and a preliminary product brochure for the

nanoTensile 5000. Id. ¶ 12. Defendant also engaged in additional

promotional and marketing activities described in detail in the

evidence filed under seal by Plaintiff. 

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LEGAL STANDARD

Title 28 U.S.C. § 1404(a) provides as follows: "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." The statute,

therefore, identifies three basic factors for district courts to

consider in determining whether a case should be transferred: 

(1) convenience of the parties; (2) convenience of the witnesses;

and (3) the interests of justice. 28 U.S.C. § 1404(a). The Ninth

Circuit has held that a fourth factor for the court to consider is

the plaintiff's choice of forum. See Securities Investor

Protection Corp. v. Vigman, 764 F.2d 1309, 1317 (9th Cir. 1985). 

The Securities Investor court held that, unless the balance of the

§ 1404(a) factors "is strongly in favor of the defendants, the

plaintiff's choice of forum should rarely be disturbed." Id.; see

also Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843

(9th Cir. 1986) ("defendant must make a strong showing . . . to

warrant upsetting the plaintiff's choice of forum"). The burden is

on the defendant to show that the convenience of parties and

witnesses and the interest of justice require transfer to another

district. See Commodity Futures Trading Comm'n v. Savage, 611 F.2d

270, 279 (9th Cir. 1979). 

A case may be transferred for convenience only to a venue in

which it could have originally been brought. In civil cases where

jurisdiction is based on a federal question, venue is proper in:

(1) a judicial district where any defendant resides, if all

defendants reside in the same State,

(2) a judicial district in which a substantial part of the

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events or omissions giving rise to the claim occurred, or a

substantial part of the property that is the subject of the

action is situated, or

(3) a judicial district in which any defendant may be found,

if there is no district in which the action may otherwise be

brought.

28 U.S.C. § 1391(b).

DISCUSSION

I. Convenience of the Parties

The large majority of Defendant's relevant personnel and

documents are located in Minnesota, while the large majority of

Plaintiff's relevant personnel and documents are located in

Tennessee. Although each party has sales personnel on the West

Coast, none lives in the Northern District of California, and thus

their sales personnel would have to travel at least somewhat to

testify regardless of where this case is tried. Transferring the

action to Minnesota would not, as Plaintiff suggests, merely shift

the convenience from Plaintiff to Defendant, because Minnesota is

no less convenient for Plaintiff's Tennessee-based MTS Nano

division than Northern California. Indeed, MTS Nano's parent

corporation is located in Minnesota. Therefore, the Court finds

that the factor of convenience of the parties weighs strongly in

favor of transferring this case to Minnesota. 

II. Convenience of the Witnesses

Of the non-party witnesses identified by Plaintiff, one lives

in Southern California, one lives in Tennessee, and three potential

customers live in the Northern District of California. Given the

stage at which Plaintiff filed this lawsuit, however, these

potential customers are unlikely to have particularly important or

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relevant testimony. The Court finds that this factor weighs

slightly in favor of keeping the case in the Northern District of

California. 

III. Interests of Justice

Neither party makes any showing that the interests of justice

will be affected by a transfer of venue to Minnesota, and therefore

the Court finds that this is not a relevant factor. 

IV. Plaintiff's Choice of Forum 

There are exceptions to the general rule that a plaintiff’s

choice of forum “should rarely be disturbed.” See Securities

Investor, 764 F.2d at 1317. “Ordinarily, where the forum lacks any

significant contact with the activities alleged in the complaint,

plaintiff’s choice of forum is given considerably less weight.” 

IBM Credit Corp. v. Definitive Computer Services, Inc., 1996 WL

101172, *2 (N.D. Cal. 1996). Here, the allegedly infringing

product was developed and tested in Minnesota. Plaintiff itself

does not reside in California. Plaintiff's assertion that a "large

part of the infringing activity took place in California"

overstates the evidence on which it relies. In fact, Plaintiff has

shown little conclusive evidence that Defendant, in Northern

California, made offers to sell that would have caused potential

customers to understand that acceptance would conclude a sale. 

Rotec Indus., Inc. v. Mitsubishi Corp., 215 F.3d 1246, 1257 (Fed.

Cir. 2000) (quoting Restatement (Second) of Contracts § 24 (1979)). 

Therefore, the Court gives Plaintiff's choice of forum less weight

than it would otherwise. See Williams v. Bowman, 157 F. Supp. 2d

1103, 1106 (N.D. Cal. 2001) (noting that the degree of deference

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according to the plaintiff's choice of forum is substantially

reduced where the plaintiff does not reside in the venue or where

the forum lacks a significant connection to the activities alleged

in the complaint) (quoting Fabus Corp. v. Asiana Exp. Corp., 2001

WL 253185, *1 (N.D. Cal. March 5, 2001)). 

On balance, the Court finds that the factors in this case

weigh in favor of transfer of venue. There is no dispute that the

District of Minnesota is an appropriate venue for this action,

because that is the district where both parties are located. 

Therefore, the Court grants Defendant's motion to transfer venue to

Minnesota. 

CONCLUSION

For the foregoing reasons, the Court GRANTS Defendant's motion

to transfer the case to the District of Minnesota (Docket No. 23). 

Venue of this case in its entirety is TRANSFERRED to the District

of Minnesota pursuant to 28 U.S.C. § 1404(a). The Clerk shall

transfer the file.

IT IS SO ORDERED.

Dated: 9/1/06 

CLAUDIA WILKEN

United States District Judge

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