resolve the case in each forum; and (4) the relation of each community forum to the issue of the case.
See Coleman, 2004 WL 609369, at *3.

First, this Court and the District of New Jersey are equally familiar with patent law. Second,
the “community interest” factor militates neither for nor against transfer. While Illinois has an
interest in redressing alleged infringement occurring in the state, this interest is not unique to Illinois.
The other states in which the product is sold have an equal interest in redressing the alleged
infringement. See Berol, 2002 WL 1466829, at *5. Finally, New Jersey is the situs of material
events, and “the administration of justice is served more efficiently when the action is brought before
a court that is closer to the action.” Berol, 2002 WL 1466829, at *5 (internal quotations and citation
omitted). The Court therefore finds that the private and public interests weigh strongly in favor of
transferring the case to the District of New Jersey.

D. Motion for Costs and Fees

ICL’s motion for costs and fees seeks recovery of expenses incurred in bringing the motions
to transfer venue and for costs and fees, discovery on jurisdiction and venue, and opposing the
motion for preliminary injunction pursuant to 28 U.S.C. § 1927. ICL argues that Davis brought this
infringement action when it should have known three of six accused products did not infringe and
that Davis’s reasons for asserting personal jurisdiction over ICL in the Northern District of Illinois
are insufficient.

Excess costs, expenses, and attorneys’ fees may be recovered from “[a]ny attorney... who
so multiplies the proceedings in any case unreasonably and vexatiously.” 28 U.S.C. § 1927.

“Vexatious’ conduct involves either subjective or objective bad faith.” Pacific Dunlop Holdings,

13



defendant, “the court must determine whether an applicable statute potentially confers jurisdiction
by authorizing service of process on the defendant, and whether the exercise of jurisdiction would
satisfy the requirements of due process.” Deprenyl Animal Health, 297 F.3d at 1349, The relevant
statute in this case is the Illinois long arm statute, which confers jurisdiction over causes of action
arising from several enumerated acts as well as “on any other basis now or hereafter permitted by
the Illinois Constitution and the Constitution of the United States.” 735 ILL. Comp. STAT. 5/2-
209(a), (c); see Deprenyl, 297 F.3d at 1349 (noting that Federal Rule of Civil Procedure 4(k)(1)(A)
“allows a plaintiff to rely on the state long arm statute . . . to obtain statutory authorization for the
exercise of personal jurisdiction”).

1. Jurisdiction Under the Hlinois Long Arm Statute

Inthis case, it is not disputed that an allegedly infringing article was offered for sale and was
sold to Plaintiff in Illinois. ICL argues that its single sale to Illinois does not constitute “[t]he
transaction of any business” in Illinois, one of the enumerated acts conferring jurisdiction under the
Illinois long arm statute. See 735 ILL. Comp. STAT. 5/2-209(a)(1). However, the Federal Circuit has
expressly stated that patent infringement cases are creatures of federal law, and therefore state law
cannot “defin[e] its contours.” See North Am. Philips Corp. v. Am. Vending Sales, Inc,, 35 F.3d
1576, 1579 (Fed. Cir. 1994).

[The Illinois long arm statute] is not the source of the substantive
right [in patent infringement cases] and does not purport to affect its
scope or nature. So, while the federal choice of law rule concerning
personal jurisdiction requires us to look to state law in the first
instance, the character of the particular tort alleged here requires a

look back to federal law on the conceptualization of the tort and its
situs.


USS. at 477; see Berol, 2002 WL 1466829, at *3 (explaining that a defendant faces “an exceedingly
high standard” in demonstrating jurisdiction is unreasonable or unfair). ICL has not attempted to
present a compelling case to defeat jurisdiction on the grounds of unfairness. Instead, it raises only
issues of convenience, which will be addressed below. See Burger King, 47) U.S. at 477 (noting
that many considerations of unfairness can be dealt with through, among other things, a change of
venue, rather than a finding of no jurisdiction).

The Court therefore finds that ICL is subject to personal jurisdiction in Illinois and that the
exercise of jurisdiction comports with due process. Asaresult, ICL’s motion must be denied to the
extent it seeks transfer under § 1406(a).

Cc. Convenience of Parties and Witnesses, and Interests of Justice

Having found that both the transferor and transferee districts are proper venues, the Court
now turns to the issue of whether transfer is warranted for the convenience of parties and the interest
of justice. See 28 U.S.C. § 1404(a).

Because determining whether transfer is appropriate is made on a case-by-case basis and
“involves a large degree of subtlety and latitude,” it is “committed to the sound discretion of the trial
judge.” Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986). In analyzing whether
transfer is convenient under § 1404(a), courts are directed to consider both private and public
interests. Private interests, ie., the interests of the parties, include: “(1) the plaintiff's choice of
forum, (2) the situs of the material events, (3) the relative ease of access to sources of proof, (4) the
convenience of the parties, and (5) the convenience of the witnesses.” Amoco Oil Co. v. Mobil Oil

Corp., 90 F. Supp. 2d 958, 960 (N.D. Ill. 2000). The analysis of public interests “focuses on the



2. Due Process

Because the Illinois long arm statute does purport to confer jurisdiction over ICL, the Court
must next determine whether the exercise of jurisdiction satisfies due process. “Where a forum
seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit
there, [the Due Process Clause’s] ‘fair warning’ requirement is satisfied if the defendant has
‘purposefully directed’ his activities at residents of the forum, . . . and the litigation results from
alleged injuries that ‘arise out of or relate to’ those activities.” Burger King Corp. v. Rudzewicz, 471
U.S. 462, 472 (1985) (citations omitted). Therefore, due process is satisfied if a state “‘asserts
personal jurisdiction over a corporation that delivers its products into the stream of commerce with
the expectation that they will be purchased by consumers in the forum State’ and those products
subsequently injure forum consumers.” Jd. at 473.

Inspite of several stray comments suggesting otherwise, Davis does not claim that this Court
has general jurisdiction over ICL. Rather, Davis argues that ICL’s one-time sale of PTFE IR
sampling cards to Davis‘ provides a sufficient minimum contact to confer specific jurisdiction
consistent with the Due Process Clause.

The Federal Circuit, in Akro Corp. v. Luker, 45 F.3d 1541 (Fed. Cir. 1995), summarized the
various Supreme Court cases governing the due process inquiry and “outlined a three-prong

minimum contacts test for determining if specific jurisdiction existed: (1) whether the defendant

* Davis maintains that ICL’s sales to three other Illinois customers should also be
considered. The Court, however, agrees with ICL that they are not relevant to the jurisdictional
inquiry. The three other sales were of polyethylene IR sampling cards, and only PTFE sampling
cards are alleged to be infringing in the amended complaint. The single alleged sale of PTFE
sampling cards in Illinois was to Davis.



Id.

“[A]s a matter of uniform federal patent law .. . patent infringement occurs where the
allegedly infringing sales are made.” Jd. at 1578-79. Illinois has an interest in regulating the
importation of infringing articles into the state, and “to sell an infringing article to a buyer in Illinois
is to commit a tort there (though not necessarily only there). To hold otherwise would exalt form
over substance in an area where the Supreme Court generally has cautioned against such an
approach.” Jd, at 1579-80 (citations omitted). Thus, it does not matter where ICL performed the
sales contract:

Regardless where the transactions are deemed to be situated under the

tort or the ‘transacting business’ provisions, [the] defendants were

nonetheless parties to the importation into the forum state. Surely the

reasonable market participant in the modern commercial world has to

expect to be haled into the courts of that state, however distant, to

answer for any liability based at least in part on that importation.
Id, at 1580.

Similarly, it is irrelevant that the sale was FOB New Jersey. See id. at 1579 (holding that
the place where legal title passes has no “controlling significance”).

Inany event, because the Illinois long arm statute reaches any defendant that due process will
allow, “the two-step inquiry folds into one: whether an exercise of personal jurisdiction over [the

defendant] would offend [dJue [p]rocess.” Red Wing Shoe Co., Inc. v. Hockerson-Halberstadt, Inc.,

148 F.3d 1355, 1358 (Fed. Cir. 1998).



purposefully shipped the accused [product] into [the forum state] through an established distribution
channel’”) (alteration in original).

The second prong of the Afro test is also satisfied here because the “patent infringement
claim obviously ‘arises out of or relates to’ [the defendant’s] allegedly infringing activities in this
forum.” Berol Corp. v. BIC Corp., No. 02 C 559, 2002 WL 1466829, at *3 (N.D. Ill. July 8, 2002);
see 3D Sys., 160 F.3d at 1378 (holding that a defendant’s sending price quotation letters into the
forum state constituted an “offer to sell” under 35 U.S.C. § 271, thus satisfying the second prong of
the Akro test).

Furthermore, it does not matter that there was only one alleged contact with Illinois, see
Burger King, 471 U.S. at 475 n.18 (“So long as it creates a ‘substantial connection’ with the forum,
even a single act can support jurisdiction.”), or that ICL never entered the Illinois forum, id. at 476
(“So long as a commercial actor’s efforts are ‘purposefully directed’ toward residents of another
State, we have consistently rejected the notion that an absence of physical contacts can defeat
personal jurisdiction.”).

b. Reasonableness

Because the first two Akro factors have been met, “the burden shifts to defendants to prove
that personal jurisdiction in this forum is not ‘reasonable and fair.”” Berol, 2002 WL 1466829, at _
*3 (citing Akro, 45 F.3d at 1545-46); see Burger King, 471 U.S, at 476 (citing Int’? Shoe Co. v.
Washington, 326 U.S. 310, 320 (1945)). “[W]here a defendant who purposefully has directed his
activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the

presence of some other considerations would render jurisdiction unreasonable.” Burger King, 471



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United States District Court, Northern District of Illinois

Name ctor’ W@\] Ronald A. Guzman Se ae
CASE NUMB 03 C 7288 DATE 9/24/2004

. fe) RE. DAVIS CHEMICAL CORPORATION vs, INTERNATIONAL CRYSTAL LAB
TITLE

- [in the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
OTION: of the motion being presented.)
DOCKET ENTRY:
qd) a Filed motion of [ use listing in “Motion” box above.]
(2) oO Brief in support of motion due
(3) Oo Answer brief to motion due. . Reply to answer brief due.
(4) im} Ruling/Hearing on set for at
(5) a Status hearing[held/continued to] [set for/re-set for] on set for at
(6) oO Pretrial conference[held/continued to] (set for/re-set for] on set for at :
Q) a Trial[set for/re-set for] on at
(8) a [Bench/Jury trial] [Hearing] held/continued to at
(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) CO Local Rule 41.1 COFRCP41(a)(1) OFRCP41(a)(2).
go ow [Other docket entry) _ ENTER MEMORANDUM OPINION AND ORDER: Defendant ICL’s
Motion to Transfer Venue Pursuant to 28 U.S.C. §1406(a) or §1404(a) is granted. Defendant’s Motion
for Costs and Fees [doc. no. 43-1] is denied. All other pending motions, including Plaintiff's Motion for
Preliminary Injunction, are denied as moot. The case is hereby transferred to the District of New Jersey.
Any pending motions or schedules are stricken as moot.
ab @ (For further detail see order attached to the original minute order.]
No notices required, advised in open court.
No notices required. ures of votes
Notices mailed by judge's staff. SEP 2 200F

Notified counsel by telephone.

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Docketing to mail notices, Yok

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date dockgted

docking deputy intials

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In this case, Davis’s home forum is Illinois, and an allegedly infringing article was sold to
Davis in Illinois. The majority of material events, however, occurred in New Jersey, which is where
the alleged infringing products were manufactured, and from where the alleged infringing products
are sold. See Berol, 2002 WL 1466829, at *4 (explaining that “courts have often focused on the
location of the allegedly infringing sales, or the alleged infringer’s place of business”). Moreover,
Davis alleges ICL has infringed its patent “in Illinois and elsewhere,” (Am. Compl. 8), so Illinois
is not the only location of alleged infringement. See Berol, 2002 WL 1466829, at *4 (holding that
the connection to the forum state is not strong where “the alleged infringement is presumably
occurring in several fora across the country”). Because Illinois is not the situs of material events,
Davis’s choice of forum need not be given significant weight. Most material events occurred in New
Jersey, which strongly weighs in favor of transfer.

a. Access to Proof and Convenience of Witnesses and Parties

The convenience of witnesses has often been described as the most important factor in the
§ 1404(a) analysis. See, e.g, Coleman, 2004 WL 609369, at *2. Neither party, however, has
identified any third-party witnesses who would be inconvenienced by litigating this case in either
Illinois or New Jersey. All of the witnesses are apparently agents or employees of the parties, and
their convenience does not weigh for or against transfer, See Applied Web Systems, Inc. v. Catalytic
Combustion Corp., No. 90 C 4411, 1991 WL 70893, at *5 (N.D. Ill. Apr. 29, 1991) (“In weighing
the relative inconvenience of witnesses, the Court generally assigns little weight to the location of

employee-witnesses.”),

il


,

efficient administration of the court system, rather than the private considerations of the litigants.”
Id. at 961, Public interests “include[] such considerations as the speed at which the case will proceed
to trial, the court’s familiarity with the applicable law, the relation of the community to the
occurrence at issue, and the desirability of resolving controversies in their locale.” Jd. at 961-62.
The movant has the burden of proving that “the transferee forum is clearly more convenient.”
Coffey, 796 F.2d at 219-20.

1. Private Interests

a Plaintiff's Choice of Forum and Situs of Material Events

The plaintiff's choice of forum is generally given substantial weight, and the presumption
in favor of the plaintiff's choice “‘may be overcome only when the private and public interest factors
clearly point toward trial in the alternative forum.’” Sec. & Exch. Comm’n v. Barzilay, No. 99 C
5023, 2001 WL 127667, at *2 (N.D. Ill. Feb. 14, 2001) (quoting Macedo v. Boeing Co., 693 F.2d
683, 688 (7th Cir. 1982)); see also In re Nat'l Presto Indus., Inc., 347 F.3d 662, 664 (7th Cir. 2003)
(quoting Gulf Oil Corp. v, Gilbert, 330 U.S. 501, 508 (1947)) (“‘[UJnless the balance is strongly in
favor of the defendant, the plaintiffs choice of forum should rarely be disturbed. . . . Rarely,
however, is not never.””). Deference to the plaintiffs choice of forum is minimized where it is not
the plaintiff’s home forum or the situs of material events. See Coleman v. Buchheit, Inc., No. 03 C
7495, 2004 WL 609369, at *1 (N.D. Ill. Mar. 22, 2004); see also Sitrick v. Freehand Sys., Inc., No.
02 C 1568, 2003 WL 1581741, at *2 (N.D. Ill. Mar. 27, 2003) (noting that less deference is given

to the plaintiff's choice of forum “when it lacks any significant contact with the underlying forum”).

10



purposefully directed its activities at residents of the forum, (2) whether the claim arises out of or
relates to those activities, and (3) whether assertion of personal jurisdiction is reasonable and fair.”
3D Sys., Inc. v. Aarotech Labs., Inc., 160 F.3d 1373, 1378 (Fed. Cir. 1998) (citing Akro, 45 F.3d at
1545-46) (commenting that the Federal Circuit has “followed this test consistently”); see also Burger
King, 471 US. at 475 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)) (“‘[I]t is essential in
each case that there be some act by which the defendant purposefully avails itself of the privilege of
conducting activities within the forum State, thus invoking the benefits and protections of its
laws.””).
a, Minimum Contacts

In this case, the first two prongs of the Akro test are satisfied because ICL purposefully
directed its activities to Illinois, and the patent infringement claim arises from those activities. ICL
does not dispute that Davis ordered the allegedly infringing article from an unsolicited brochure sent
by ICL to Davis in Illinois. See 3D Sys., 160 F.3d at 1378 (holding that the first prong of the Akro
test is satisfied where the defendant sends promotional letters, solicits orders, and issues price
quotations to citizens of the forum state); see also Burger King, 471 U.S. at 475 (“Jurisdiction is
proper . .. where the contacts proximately result from actions by the defendant himself that create
a ‘substantial connection’ with the forum State.”) (emphasis in original). Moreover, the offer to sell
resulted in an actual sale to an Illinois resident, and ICL knowingly shipped the product to the Illinois
forum. See Worldtronies Int’l, Inc. v. Ever Splendor Enter. Co., Inc., 969 F. Supp. 1136, 1140 (N.D.
Ill. 1997) (quoting Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1564-65))

(explaining that due process is satisfied “where the uncontroverted allegations ‘are that defendants



the action is commenced.” 28 U.S.C. § 1391(c); see VE Holding Corp. v. Johnson Gas Appliance
Co., 917 F.2d 1574, 1583-84 (Fed. Cir. 1990).

A. Venue in the Transferee District

In this case, jurisdiction (and therefore venue) is clearly proper in the District of New Jersey.
ICL is a resident of New Jersey, the state in which it is incorporated and has its principal place of
business. Contrary to Davis’s argument, New Jersey’s alleged lack of jurisdiction over Davis is not
relevant and certainly does not render the § 1404(a) analysis “moot.” Davis is the plaintiff here, and
its residence is not a factor in the jurisdiction/venue determination?

B. Venue in the Transferor District

The Court now turns to the question of whether venue is proper in the Northern District of
Illinois? The law of the Federal Circuit governs the issue of personal jurisdiction over ICL in this
patent case. See Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found, , 297 F.3d
1343, 1348 (Fed. Cir. 2002); Hildebrand v. Steck Mfg. Co., Inc., 279 F.3d 1351, 1354 (Fed, Cir.

2002). The Federal Circuit has explained that before exercising personal jurisdiction over a

? The Court notes the considerable confusion caused by the parties’ failure to recognize
that the motion to transfer and motion for preliminary injunction involve entirely different issues.
Although both motions relate to proper venue, they are directed to two different cases with two
different defendants. In the present case, ICL is the defendant. In the New Jersey litigation,
Davis is the defendant. Thus, ICL’s residence is relevant to the discussion of venue in the
motion to transfer, and Davis’s residence is relevant to the motion for preliminary injunction.
The parties, however, have consistently conflated the two issues in their briefing of both motions.
The Court has nevertheless used its best efforts to allocate the arguments correctly,

> The Court disagrees with Davis’s assertion that ICL waived its jurisdiction argument by
filing a motion to transfer pursuant to § 1404(a). ICL’s motion was brought alternatively under
both § 1404(a) and § 1406(a) and clearly argues that venue is not proper in this district.


Inc. v. Barosh, 22 F.3d 113, 120 (7th Cir, 1994). Because this Court does have subject matter
jurisdiction over ICL, Davis’s actions in defending against the motion to transfer venue were clearly

not vexatious or unreasonable. Defendant’s motion for costs and fees therefore must be denied.

CONCLUSION
Defendant ICL’s Motion to Transfer Venue Pursuant to 28 U.S.C. §1406(a) or §1404(a) is
granted. Defendant’s Motion for Costs and Fees [doc. no. 43-1] is denied. All other pending
motions, including Plaintiffs Motion for Preliminary Injunction, are denied as moot. The case is

hereby transferred to the District of New Jersey.

9ay/o4

SO ORDERED. ENTERED:
HON. RONALD A. G!
United States Judge

14


27, 2003, ICL filed a declaratory judgment action against Davis in the District of New Jersey,
seeking a declaration of noninfringement of the ‘705 patent.

On November 3, 2003, ICL filed the present motion to transfer this case to the District of
New Jersey. On November 18, 2003, Plaintiff filed a motion seeking to enjoin ICL from proceeding

with the New Jersey litigation, claiming that New Jersey lacks jurisdiction over Davis.

DISCUSSION

ICL seeks to transfer this action to the District of New Jersey pursuant to either 28 U.S.C.
§ 1404(a) or § 1406(a). 28 U.S.C. § 1404(a) 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. § 1406(a) provides: “The district court
of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or
if it be in the interest of justice, transfer such case to any district or division in which it could have
been brought.”

Thus, under either section, a preliminary issue is whether venue properly lies in both this
district and the transferee district. Venue in patent cases is governed by 28 U.S.C. § 1400(b), which
provides: “Any 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.” For purposes of § 1400(b), a non-resident corporate defendant “shall

be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time



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

EASTERN DIVISION
RE. DAVIS CHEMICAL )
CORPORATION, )
)
Plaintiff, )
vy. ) Judge Ronald A. Guzman

)

INTERNATIONAL CRYSTAL ) 03 C 7288
LABORATORIES, INC., )
JOHN DOE CUSTOMERS #1-1000, )
)
~Defendants. )
)

MEMORANDUM OPINION AND ORDER

This matter is before the Court on Defendant International Crystal Laboratories, Inc.’s
(“ICL”) Motion to Transfer Venue Pursuant to 28 U.S.C § 1406(a) or § 1404(a) and ICL’s Motion
for Costs and Fees Pursuant to 28 U.S.C. § 1927. For the reasons that follow, ICL’s motion to

transfer pursuant to § 1404(a) is granted, and the motion for costs and fees is denied.

BACKGROUND
On October 15, 2003, Plaintiff R.E. Davis Chemical Corp. (“Davis”), an Illinois resident,
filed a complaint alleging ICL infringed Davis’s Patent 5,290,705 (the '705 patent) by selling and/or
offering for sale analytic specimen supports, including certain IR sampling cards containing

polytetrafluoroethylene (“PTFE”) and other IR sampling cards containing polyethylene.’ On October

' On March 12, 2004, Plaintiff amended the complaint and now alleges that only the IR
sampling cards containing PTFE infringe the ‘705 patent.



Similarly, the convenience of the parties is essentially equal. First, while ICL would have
to transport numerous witnesses to the Illinois forum if the case is not transferred, it has not
established that doing so would be a hardship. See Sitrick, 2003 WL 1581741, at *4 (stating that the
parties’ financial abilities can be relevant to the issue of the convenience of the parties). Second,
although the Court is sensitive to the concerns of Mr. Davis, Plaintiff's principal, about his health
and his inability to travel, he may appear by deposition in Illinois no matter where the litigation is
centered. See, e.g., Paramount Pictures Corp. v. Behnke, No. 94 C 6878, 1995 WL 399494, at *4
(N.D. Ill. June 29, 1995).

The next factor to be considered is the location of relevant documents and sources of proof.
ICL’s manufacturing equipment and materials, as well as the related documents needed for the
litigation, are all located in New Jersey. See Berol, 2002 WL 1466829, at *5 (“[P]atent infringement
suits usually focus on the activities of the alleged infringer, its employees, and its documents rather
than upon those of the plaintiffs.”). There is apparently little, if any, evidence located in the
Northern District of Illinois. Therefore, access to proof weighs heavily in favor of transfer to District
of New Jersey.

2. Public Factors

The interest of justice is analyzed separately from private factors “and may be determinative
in a particular case, even if the convenience of the parties and witnesses might call for a different
result.” Coffey, 796 F.2d at 220. As stated above, the interest of justice includes: (1) the speed at

which the case will proceed to trial; (2) the court’s familiarity with applicable law; (3) the desire to

12