the Northern District of I]inois but 8.1 months in the Western District of Texas. The median
time from filing to trial of a civil case, on the other hand, is 13.2 months in the Western District
of Texas but 26.3 months in the Northern District of Illinois. Administrative Office of the
United States Courts, Federal Court Management Statistics 2001: District Courts,
http://www.uscourts.gov/cgi-bin/emsd2001.pl. This suggests that Safe Bed and KCI USA are
slightly more likely to have their litigation disposed of earlier in this district but significantly
more likely to receive a speedier trial in Texas. See H.B. Sherman Mfg., 979 F. Supp. at 632
(facing the same situation). Overall, this factor points to Texas, to some degree. See Hernandez
v. Graebel Van Lines, 761 F. Supp. 983, 991 (E.D.N.Y. 1991) (giving this factor "some weight").

Texas and Illinois both have an interest in resolving the litigation between Safe Bed and
KCI USA, considering that both states presumably want to encourage business and discourage
the sale of infringing products within their boundaries. See Abbott Labs., 1995 WL 117984, at
*6. [llinois also has an interest in adjudicating this litigation because it involves an alleged injury
to a citizen's intellectual property rights. See Coo/Savings.com, Inc., 53 F. Supp. 2d at 1106-07;
of. Ricoh Co., 817 F. Supp. at 481, 486-87. Likewise, Texas has an interest in adjudicating this
litigation because it involves a citizen's rights. Thus, this factor favors neither party.

Finally, Safe Bed asserts that this litigation should remain in Illinois because this Court
has developed familiarity with the '939 patent by conducting a successful settlement conference
in Safe Bed Technologies Co. v. Hill-Rom Co. Although some general familiarity has been
developed, the level of familiarity we have with the '939 patent is insignificant, especially
compared to the level of familiarity obtained by the judges in the cases cited by Safe Bed. (See

Pl.'s Mem. Opp'n Defs.' Mot. Sever at 14 (citing Regents of the Univ. of Cal. v. Eli Lilly & Co.,

-13-


transfer of the remaining claims is warranted under § 1404(a). Indianapolis Motor Speedway
Corp., 2000 WL 777874, at *2.

Here, Safe Bed does not dispute that the claims against Loyola University Health System,
Rush System for Health, Swedish Covenant Hospital, and Sherman Hospital are peripheral to the
claims against KCI USA and that adjudication of the claims against KCI USA will potentially
dispose of all the claims in this case. (P1.'s Mem. Opp'n Defs.' Mot. Sever at 15.) Both points
seem well settled by the courts. KCI USA designs and manufactures the purported infringing
product, while Loyola University Health System, Rush System for Health, Swedish Covenant
Hospital, and Sherman Hospital merely use KCI USA's product pursuant to lease agreements and
are liable to Safe Bed only if KCI USA is deemed to be infringing on Safe Bed's product. Under
similar facts, courts have held that the plaintiff's claims against the party who uses the product
are peripheral. See LG Elecs. Inc., 138 F. Supp. 2d at 585 (severing claims brought against a
reseller of an alleged infringing product); Indianapolis Motor Speedway Corp., 2000 WL
777874, at *2-3 (severing claims brought against a distributor of an alleged infringing product);
Corry, 16 F. Supp. 2d at 665-66 (same); Siemens Aktiengesellschaft, 370 F. Supp. at 972 (same).
We find no reason to depart from the reasoning of those courts here.' Likewise, we follow the
reasoning of the aforementioned courts with respect to whether the resolution of Safe Bed's
claims against KCI USA in Texas, KCI USA's proffered forum, will likely dispose of Safe Bed's

claims against Loyola University Health System, Rush System for Health, Swedish Covenant

' The fact that KCI USA is funding the defense to Safe Bed's claims tends to show the
peripheral nature of Safe Bed's claims against Loyola University Health System, Rush System for
Health, Swedish Covenant Hospital, and Sherman Hospital. See Corry, 16 F. Supp. 2d at 666
n.12 (citing to Mobil Oil Corp. v. W.R. Grace & Co., 334 F. Supp. 117, 123 (S.D. Tex. 1971)).

-4-


any KCI USA witness where he or she is located prior to trial. More importantly, KCI USA
presents no evidence that a single one of its twenty-three potential witnesses would be unwilling
to testify at trial in Illinois if asked. This fact militates against KCI USA's position. See
Sub-Micron Sys., Inc., 1993 WL 524273, at *10 ("[S]ince neither party suggests that any of its
witnesses are likely to be unwilling to testify, we do not weigh the availability of compulsory
process for unwilling witnesses.").

Safe Bed lists Potthast, Ring, and thirteen others as potential witnesses. (Pl.'s Mem.
Opp'n Defs.' Mot. Sever Ex. A at 3-5.) All of the potential witnesses reside in Illinois. (/d.)
Potthast and Ring, as the inventors and prosecutors of the '939 patent, are, of course, critical to
this litigation. Of the thirteen other individuals, four are from Loyola University Health System,
Rush System for Health, Swedish Covenant Hospital, and Sherman Hospital, and are expected to
have information that Safe Bed may use to support its claims and undermine KCI USA's
defenses. Seven are expected to have information relevant to "the inventorship" of the '939
patent. One, Jim Ring, is expected to have information relevant to undermining KCI USA's
defenses. And finally, the last potential witness, Kevin Morrey, is expected to have information
relevant to the inventorship of the '939 patent and the willful nature of KCI USA's infringement.

In its opposition brief, Safe Bed elaborates on the importance of Morrey. Safe Bed
claims that it intends to have Morrey testify on KCI USA's knowledge of the '939 patent since
January 1998, KCI USA's creation of a 1998 affidavit containing false statements about the
inventorship of the '939 patent, and CCI USA's payment of money in 1998 to Morrey to secure
his signature on the false affidavit. (Pl.'s Mem. Opp'n Defs.' Mot. Sever at 9.) As a result, the

importance of Morrey to Safe Bed's claim of willful infringement is understood. At oral

-9-


KCI USA's first hurdle is easily overcome. Safe Bed raises no objection to KCI USA's
assertion that the claims against it could have been brought in the Western District of Texas.
Venue is proper in the district where the defendant resides or where the defendant has committed
acts of infringement and has a regular and established place of business. 28 U.S.C. § 1400(b).
Given that KCI USA has its principal place of business and corporate headquarters in the
Western District of Texas, it is clear that Safe Bed could have filed its claims there.

In comparing the convenience of having a plaintiff's claims litigated in the transferee
district versus the transferor district, courts consider a variety of factors. Falling within the
"convenience of the parties and witnesses" language of § 1404(a) are the following factors: the
location of the plaintiff and defendant, the location of the events giving rise to the claims, the
location of key witnesses and the ability of the court in either district to compel their appearance
if necessary, the location of key documents and similar sources of proof, and the ability of the
plaintiff and defendant to bear the expense and inconvenience of litigating in either district.
CoolSavings.com, Inc., 53 F. Supp. 2d at 1005-06; #.B. Sherman Mfg. v. Rain Bird Nat'l Sales
Corp., 979 F. Supp. 627, 629-31 (N.D. Ill. 1997); Applied Web Sys., Inc., 1991 WL 70893, at
*3-6. Falling within the "interest of justice" language of § 1404(a) are the following factors: the
ability of the court in either district to quickly resolve the litigation, the interest in resolving the
litigation in either district, and the familiarity of the court in either district with the litigation.
DIRECTY, Inc. v. EQ Stuff, Inc., No. CV0200292DDPVBKX, 2002 WL 1448321, at *5 (C.D.
Cal. May 8, 2002); Dark Horse Trading Co. v. Walt Disney Co., No. 98 C 5251, 1999 WL
33100013, at *3 (N.D. Ill. May 14, 1999); Sub-Micron Sys., Inc. v. Sub-Micron Surfacing, Inc.,

No. 93 C 3295, 1993 WL 524273, at *10 (N.D. Ill. Dec. 10, 1993). "The analysis under §

-6-


Hospital, and Sherman Hospital in Ilinois. See LG Elecs. Inc., 138 F. Supp. 2d at 585-86;
Indianapolis Motor Speedway Corp., 2000 WL 777874, at *3; Corry, 16 F. Supp. 2d at 665-66;
Siemens Aktiengesellschaft, 370 F. Supp. at 972. On this point, we note that Loyola University
Health System, Rush System for Health, Swedish Covenant Hospital, and Sherman Hospital have
all agreed to be bound by the decision of the district court in Texas. See LG Elecs. Inc., 138
F. Supp. 2d at 585-86; Corry, 16 F. Supp. 2d at 665 n.9.

Moving on, we address the critical question raised by Defendants' motion: whether Safe
Bed's claims against KCI USA should be transferred from the Northern District of Illinois to the
Western District of Texas under § 1404(a). In this regard, KCI USA bears the burden of showing
that Safe Bed's claims against KCI USA could have been brought in the Western District of
Texas, and that the Western District of Texas is "clearly more convenient" than the Northern
District of Illinois. See Coffey v. Van Dorn Iron Works, 796 F.2d 217, 220-21 (7th Cir. 1986);
CoolSavings.com, Inc. v. 1Q.Commerce Corp., 53 F. Supp. 2d 1000, 1005 (N.D. Ill. 1999);
Easypower Corp. v. ICC Innovative Concepts Corp., No. 98 C 3189, 1999 WL 66576, at *5
(N.D. Il. Feb. 8, 1999); Abbott Labs. v. Zenith Labs., Inc., No. 94 C 6792, 1995 WL 117984, at
*3 (N.D. Ill. Mar. 16, 1995); Applied Web Sys., Inc. v. Catalytic Combustion Corp., No. 90 C
4411, 1991 WL 70893, at *3 (N.D. IIL. Apr. 29, 1991); Rose v. Franchetti, 713 F. Supp. 1203,
1214 (N.D. IIL. 1989); Walker v. Carnival Cruise Lines, Inc., 681 F. Supp. 470, 477 (N.D. Ul.
1987); Charles Alan Wright et al., Federal Practice and Procedure § 3848, at 383 (2d ed. 1986)
(The "various forms of words on the weight to be given plaintiff's choice of forum are an attempt
to verbalize the burden that defendant must carry in order to persuade the court that transfer

should be granted.").


Illinois—where Potthast and Ring conceived the inventions disclosed and claimed in the '939
patent, and where Potthast and Ring reduced the inventions to practice. Thus, KCI USA's
assertion of its counterclaim and nine affirmative defenses reinforces this litigation's connection
to Illinois. See Abbott Labs., 1995 WL 117984, at *4; Aptargroup, Inc., 1994 WL 589540, at *2.
As to this factor, we have a draw.

In an exhibit, KCI USA lists thirteen employees and ten nonemployees that it anticipates
calling as witnesses at trial. (Defs.' Mem. Supp. Mot. Sever Ex. B at 2-4.) All of the potential
witnesses reside in Texas. Nine of the potential witnesses have knowledge of "[m]atters
pertaining to the design and development of [the therapeutic beds]," two have knowledge of
“{mlJatters pertaining to the design, development, and manufacture of [the therapeutic beds]," two
have knowledge of "[a]ccounting matters pertaining to the development and commercialization
of [the therapeutic beds],” six have knowledge of "[m]atters pertaining to the design,
development, and commercialization of [the therapeutic beds]," one has knowledge of "[mJatters
pertaining to the research, development, and commercialization of [the therapeutic beds]," and
three have knowledge of "[m]Jatters pertaining to executive management of the design and
development of [the therapeutic beds]." (/d.) This is all good, but KCI USA has failed to inform
this Court about the positions these witnesses hold or why so many witnesses are needed to
testify on the same topic. Such information would certainly be helpful in assessing the quality
and nature of their potential testimony. See Sub-Micron Sys., Inc., 1993 WL 524273, at *9;
Vandeveld, 877 F. Supp. at 1168; Rose, 713 F. Supp. at 1214.

KCI USA presents no specifics on the inconveniences that its potential witnesses would

likely experience if they were required to testify at trial in Illinois. Safe Bed has agreed to depose

-8-


«
‘Minute Order Form (06/97) a

United States District Court, Northern District of Hlinois

Name of Assigned Judge Sitting Judge if Other arti
or Magione Tndge Charles R. Norgle than Assigned Judge Martin C. Ashman
CASE NUMBER 02 C97 DATE 7130/2002
CASE Safe Bed Technologies Company vs. KCI USA, Inc., et al.
TITLE

of the motion being presented.]

[in the folowing box (a) indicate the party filing the motion, e.g, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION:

DOCKET ENTRY:

qd) Oo Filed motion of [ use listing in “Motion” box above.]

(2) oOo Brief in support of motion due

@) ao Answer brief to motion due___._ Reply to answer brief due

(4) o Ruling/Hearingon____—_setfor_— at,

(5) Oo Status hearing[held/continued to] [set for/re-set for]on__—ssetfor_ ss at_—

(6) im Pretrial conference[held/continued to] [set for/re-set for]on__—setfor__—s ss at_—

(7) a Trial{set for/re-set for]on___—_at.

(8) Oo [Bench/Jury trial] [Hearing] held/continued to at

(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) (General Rule21 OFRCP41(a)(1) CO FRCP41(a)(2).

ao) [Other docket entry] | Enter memorandum opinion and order. For the reasons stated, defendants’

(1) [For further detail see order attached to the original minute order.]

motion to sever and transfer is denied. The entire case shall remain in Illinois for further proceedings.

No notices required, advised in open court,
3

No notices required, number of notices

VY | Notices mailed by judge’s staff. WL 31 2002

Notified counsel by telephone.

date docketed

Docketing to mail notices. pew

Mail AO 450 form.
vo |} Copy to judgeénagisteate judge.

docketing deputy initials

‘73012002

vi oma late mailed noti
courtroom 84 He thes yor date muiled notice
Is deputy’s OOHY

nn is
initials GK

; “Date/time received in
central Clerk's Office teniling deputy initials



The evidence presented on this factor, then, favors Safe Bed's position. KCI USA sets
forth no potential witness who is unwilling to testify at trial in Illinois. Safe Bed, in contrast, has
provided a list of eight people who refuse to testify in Texas, of which one is Morrey, with whom
Safe Bed intends to prove its claim of willful infringement. Admittedly KCI USA's witnesses
will be inconvenienced when they travel to Illinois to testify at trial, but so too would Safe Bed's
witnesses (not taking into account the unwilling eight) if they were to travel to Texas to testify.
Safe Bed's potential witnesses from Loyola University Health System, Rush System for Health,
Swedish Covenant Hospital, and Sherman Hospital fall outside the equation for the reasons
stated above.

Key documents and similar sources of proof are located in Texas and Illinois. As KCI
USA designs and manufactures its therapeutic beds in Texas, and stores virtually all of its
information on these subjects in Texas, it is clear that the evidence Safe Bed needs to prove its
infringement claim is located there. See Habitat Wallpaper & Blinds, Inc. v. K.T. Scott Ltd.
P'ship, 807 F. Supp. 470, 474 (N.D. Ill. 1992) ("[T]he location of the infringer's principal place
of business is often the critical and controlling consideration [on a motion to transfer]."). KCl
USA's service centers in Elmhurst and Peoria, it seems, harbor few documents pertinent to Safe
Bed's infringement claim. See S.C. Johnson & Son, Inc. v. Gillette Co., 571 F. Supp. 1185, 1188
(N.D. IIL. 1983) (discounting the importance of evidence located in Illinois where "only some
very limited sales activity occurred"). Contrary to Safe Bed's assertion, the fact that KCI USA's
therapeutic beds are located in Illinois is unremarkable. (See Pl.'s Mem. Opp'n Defs.' Mot. Sever

at 5.) We are confident that plenty of KCI USA's therapeutic beds are located in Texas as well.

-ll-


argument, Safe Bed explained that the phrase "the inventorship of the '939 patent" means "the
validity of the '939 patent." Yet it is still not apparent who the seven individuals are, what
information they possess, and why seven of them are needed to testify. The importance of
obtaining testimony from the unspecified individuals at Loyola University Health System, Rush
System for Health, Swedish Covenant Hospital, and Sherman Hospital is also unclear. Users of
KCI USA's therapeutic beds are located throughout the United States; presumably, Safe Bed
could obtain the information it desires from any of them.

Unlike KCI USA, Safe Bed has produced declarations from four of the thirteen "others"
indicating that they are unwilling to travel to Texas to testify. (Pl.'s Mem. Opp'n Defs.' Mot.
Sever Exs. 7(A)-(D).) Some of these individuals cite to general financial concerns, while others
cite to familial concerns. According to a declaration by Safe Bed's counsel, four more, of which
one is Morrey, indicated that they are unwilling to travel to Texas; these four individuals refused
to sign declarations indicating the same. (PI.'s Mem. Opp'n Defs.' Mot. Sever Ex. 6.) It is
uncontested that all eight of these individuals are beyond the subpoena power of the district court
in Texas. Hence, this case would need to stay in Illinois to obtain their live testimony at trial.
See Applied Web Sys., Inc., 1991 WL 70893, at *5 ("[T]he live testimony of material non-party
witnesses is preferred.").

Potthast and Ring claim that they will experience significant financial hardship if they are
forced to testify in Texas. Potthast is a sole practitioner in Illinois. Ring is a partner at a law
firm in Illinois. Each lawyer wants to avoid the burden that traveling to Texas will place on his

practice.

-10-


1404(a) is flexible and must be made on the unique facts of each case." Ricoh Co. v. Honeywell,
Inc., 817 F. Supp. 473, 479 (D.N.J. 1993). It involves a large degree of subtlety and latitude, and
therefore is committed to the sound discretion of the trial judge. Coffey, 796 F.2d at 219.
Generally speaking, Safe Bed's connection to Illinois is substantial. In fact, there is no
doubt that Illinois is Safe Bed's "home forum." Safe Bed is an Illinois corporation with its
principal place of business in Chicago. Safe Bed has no offices or representatives outside of
Illinois. See Vandeveld v. Christoph, 877 F. Supp. 1160, 1167 (N.D. Ill. 1995) (The fact that the
plaintiff brings his claims in his home forum weighs against transfer.) Likewise, KCI USA's
connection to Texas is substantial. KCI USA has its principal place of business and corporate
headquarters in San Antonio, and it designs and manufactures therapeutic beds there. Texas is
properly considered KCI USA's base; however, KCI USA is connected to Illinois in an important
way through its service centers in Elmhurst and Peoria. CCI USA derives four percent of its total
revenue from the commercialization of its therapeutic beds in Illinois. See Aptargroup, Inc. v.
Summit Packaging Sys., Inc., No. 94 C 2304, 1994 WL 589540, at *2 (N.D. Ill. Oct. 25, 1994).
Overall, this factor favors retention of the litigation between Safe Bed and KCI USA in Illinois.
The events giving rise to Safe Bed's claims against KCI USA have occurred throughout
the United States, wherever KCI USA's products have been sold or leased. Chiefly, the events
giving rise to Safe Bed's claims against KCI USA have occurred in Texas where KCI USA has
been designing and manufacturing its therapeutic beds. See LG Elecs. Inc., 138 F. Supp. 2d at
590 ("The center of gravity of the allegedly infringing activity has occurred [where the product's
development, testing, research, and production took place]."). In contrast, the events giving rise

to KCI USA's counterclaim and nine affirmative defenses appear to have occurred chiefly in

-7-


nine affirmative defenses. At the same time, Defendants filed the instant motion. Since then the

parties have engaged in limited discovery and have fully briefed the pertinent issues.

I. Discussion

A district court may transfer a case under 28 U.S.C. § 1404(a) to any other district or
division where it might have been brought for the convenience of the parties and witnesses and in
the interest of justice. As so defined by the courts, § 1404(a)'s purpose is to avoid "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 (1964) (quoting Cont’
Grain Co. v. Barge FBL-585, 364 U.S. 19, 26-27 (1960)). To prevent a plaintiff from thwarting
this purpose by joining a defendant whose connection to the case is peripheral and whose
connection to an otherwise suitable transferee forum is insufficient to establish personal
jurisdiction or venue, courts are authorized to sever the claims against the peripheral defendant,
transfer to the transferee forum the claims against the defendant who is directly connected to the
case, and stay proceedings against the peripheral defendant. LG Elecs. Inc. v. First Int'l
Computer, Inc., 138 F. Supp. 2d 574, 584 (D.N.J. 2001); Indianapolis Motor Speedway Corp. v.
Polaris Indus., No. 1P99-1190-C-B/S, 2000 WL 777874, at *2 (S.D. Ind. June 15, 2000); Corry
v. CFM Majestic Inc., 16 F. Supp. 2d 660, 664-65 (E.D. Va. 1998); Siemens Aktiengesellschaft v.
Sonotone Corp., 370 F. Supp. 970, 972 (N.D. Ill. 1973). For this to happen, the moving party
must demonstrate that the claims to be severed are in fact peripheral to the remaining claims, that

adjudication of the remaining claims is potentially dispositive of the severed claims, and that


119 F.3d 1559 (Fed. Cir. 1997), and CEM Corp. v. Grillo, No. 5:97-CV-614-BR2, 1998 U.S.
Dist. LEXIS 8082 (E.D.N.C. Apr. 22, 1998).) Simply put, the level of familiarity we have with
the '939 patent could be easily acquired by another district court and therefore the judicial
economy gained by our role in Safe Bed Technologies Co. v. Hill-Rom Co. is minimal. This
factor favors neither party.

In sum, after considering all of the factors mentioned above, we find that the claims
against KCI USA should not be transferred to the Western District of Texas pursuant to
§ 1404(a), and therefore Defendants' Motion to Sever and Transfer is denied. As a whole, two
factors favor keeping Safe Bed's claims against KCI USA in Illinois, five factors favor neither
district, and one factor favors transferring the claims to Texas. This is a close case, and under
such circumstances Safe Bed's choice of where to bring its claims should not be disturbed. After
all, it was KCI USA's burden to prove that the Western District of Texas would be clearly more
convenient than the Northern District of Hlinois.

We have given much consideration to the analysis of the court in RWM Kinetics
Enterprises, Inc. v. Kinetic Concepts, Inc., No. 95 C 5376, 1996 WL 238753 (N.D. Ill. May 7,
1996)—a case involving a similar patent, similar parties, and similar facts. On many points, we
agree. With respect to the convenience of the witnesses, this litigation is distinguishable from
RWM Kinetics Enterprises, Inc. because here the importance of all twenty-three of KCI USA's
potential witnesses is not apparent. Cf id. at *3. Moreover, here KCI USA has not alleged that
any of its potential witnesses are unwilling to testify at trial in Illinois. Cf id. at *4. Although
we agree with the statement relied on by the court in RWM Kinetics Enterprises, Inc. that

“[i]ntellectual property infringement suits often focus on the activities of the alleged infringer, its

-14-


Copies have been mailed to:

JAMES D. RYNDAK, Esq.
MARK K. SURL, Esq.
Ryndak & Suri

30 North LaSalle Street
Suite 2630

Chicago, IL 60602

ANTHONY C. VALIULIS, Esq.

JOHN H. WARD, Esq.

Much Shelist Freed Denenberg Ament
& Rubenstein, P.C.

200 North LaSalle Street

Suite 2100

Chicago, IL 60601

Attorneys for Plaintiff

RAYMOND P. NIRO, Esq.
ROBERT A. VITALE, JR., Esq.
DOUGLAS M. HALL, Esq.
Niro, Scavone, Haller and Niro
181 West Madison Street

Suite 4600

Chicago, IL 60602

Attorneys for Defendants


patent relates to a rotational therapy hospital bed. Potthast and Ring, the two shareholders of
Safe Bed, are the inventors of the inventions disclosed and claimed in the '939 patent. They
conceived the inventions disclosed and claimed in the '939 patent in Chicago and reduced the
inventions to practice in Chicago. Potthast and Ring, as patent attorneys, prosecuted the
application that matured into the '939 patent. All documents relating to the '939 patent and its
prosecution are located in Chicago.

Defendant KCI USA is a Delaware corporation with its principal place of business and
corporate headquarters in San Antonio, Texas. KCI USA is the wholly owned subsidiary of
Kinetic Concepts, Inc., a Texas corporation. KCI USA designs and manufactures therapeutic
beds in San Antonio, Texas. Through service centers located in most of the fifty states, KCI
USA distributes, leases, and services its therapeutic beds. Two service centers are located in
Illinois—one in Elmhurst and one in Peoria.

Defendants Loyola University Health System, Rush System for Health, Swedish
Covenant Hospital, and Sherman Hospital lease therapeutic beds from KCI USA in Illinois.
Each of these parties is an Illinois nonprofit corporation with its principal place of business in
filinois. Under contract, KCI USA and Kinetic Concepts are bound to defend and indemnify
these parties against patent infringement lawsuits relating to their use of KCI USA's therapeutic
beds.

On January 4, 2002, Safe Bed filed suit against Defendants for patent infringement. For
relief, Safe Bed sought damages and whatever justice required. On February 12, 2002,

Defendants filed their answer to Safe Bed's complaint in which they set forth a counterclaim and


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SAFE BED TECHNOLOGIES COMPANY,

Plaintiff, Case No. 02 C 97

v. Judge Charles R. Norgle
KCI USA, INC.; LOYOLA UNIVERSITY
HEALTH SYSTEM; RUSH SYSTEM FOR
HEALTH; SWEDISH COVENANT
HOSPITAL; and SHERMAN HOSPITAL,

Magistrate Judge
Martin C, Ashman

DOCKETED

JUL 8 1 2002

Se SS SS HS YH SH YS SD

Defendants.

MEMORANDUM OPINION AND ORDER

Before this Court is Defendants’ motion to sever claims against Loyola University Health
System, Rush System for Health, Swedish Covenant Hospital, and Sherman Hospital, and to
transfer the remaining claims against KCI USA, Inc. to the Western District of Texas, San

Antonio Division. For the following reasons, Defendants' motion is denied.

I. Background

Plaintiff Safe Bed Technologies Company is an Illinois corporation with its principal
place of business in Chicago. Safe Bed has a single office located in Chicago, and all of Safe
Bed's assets are located in Chicago. Safe Bed does not manufacture or sell products; rather it
owns patents and, understandably, enforces its rights under them.

At some point in time Safe Bed acquired the rights to U.S. patent number 4,998,939 (the

939 patent") from James Potthast and Tom Ring through an assignment agreement. The '939


We agree with Safe Bed that KCI USA's counterclaim and affirmative defenses reinforce
this litigation's connection to Illinois. See Abbott Labs., 1995 WL 117984, at *4; Aptargroup,
Inc., 1994 WL 589540, at *2. KCI USA raises affirmative defenses of invalidity, inequitable
conduct by Potthast and Ring during the prosecution of the '939 patent, laches and equitable
estoppel, unclean hands, and implied license. The evidence that KCI USA needs to prove any of
these affirmative defenses is located in Illinois where Safe Bed maintains all information relating
to the '939 patent. Accordingly, this factor favors neither Safe Bed nor KCI USA; we have a
draw.

There is no doubt that KCI USA will sustain additional expenses and inconveniences by
having to continue this litigation in Illinois. Similarly there is no doubt that Safe Bed would have
to sustain additional expenses and inconveniences if this litigation were transferred to Texas.
Either way, someone ends up with the short end of the stick. KCI USA, with over $350 million
per year in revenue and nearly 1300 employees, appears capable of continuing this litigation in
Illinois. Based on the evidence presented, we assume that Safe Bed could continue this litigation
in Texas. Though it portrays itself as "a small Illinois corporation," the size of its checkbook
remains unknown. See WM. Wrigley Jr. Co. v. Computer Integrated Mgmt., Inc., No. 90 C 4209,
1990 WL 186047, at *4 (N.D. ILL. Nov. 8, 1990) ("That CIM is smaller than Wrigley, without
more, is not a sufficient reason to transfer this case to CIM's preferred district."), As a result, the
weighing of this factor ends in a draw.

The first point of contention over the interest of justice factors concerns the congestion of
the dockets in the Northern District of Illinois and the Western District of Texas. According to

the most recent data, the median time from filing to disposition of a civil case is 5.6 months in

-12-


employees, and its documents,” and therefore, "the location of the infringer's principal place of
business is often the critical and controlling consideration,” id. (quoting Habitat Wallpaper &
Blinds, Inc., 807 F. Supp. at 474), reliance on this statement is misplaced where the alleged
infringer has raised affirmative defenses of invalidity, inequitable conduct, laches and equitable
estoppel, unclean hands, implied license, etc. In this situation, the location of the patent holder
takes on importance equal to the location of the alleged infringer. For the battle is fought on two
fronts, instead of one. Lastly, we disagree with the court's conclusion in RWM Kinetics
Enterprises, Inc. that it would be "easier and more efficient for a San Antonio-based judge to
supervise . .. discovery." Jd. In our opinion, a judge in Illinois could supervise discovery and
rule on motions to compel, etc., just as easily as a judge in Texas regardless of whether more or
less discoverable information is located in Illinois as compared to Texas. At oral argument, KCI

USA's counsel failed to convince us otherwise.

iH. Conclusion
For the reasons stated, Defendants' Motion to Sever and Transfer is denied. The entire

case shall remain in Illinois for further proceedings.

ENTER ORDER:
iy een
¢ A C
MARTIN C. ASHMAN
Dated: July 30, 2002. United States Magistrate Judge

-15-