to exercise supplemental jurisdiction, “a federal court should consider and weigh in each
case, and at every stage of the litigation, the values of judicial economy, convenience,
faimess, and comity.” Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988).
Supplemental jurisdiction has been codified by 28 U.S.C. § 1367 which provides that,
with the exception of actions brought solely under 28 U.S.C. § 1332:

[In any civil action of which the district courts have original jurisdiction, the

district courts shall have supplemental jurisdiction over all other claims that are

so related to claims in the action within such original jurisdiction that they form
part of the same case or controversy under Article III of the United States

Constitution.

28 U.S.C. § 1367(a). A district court may decline to exercise supplemental jurisdiction
if:

(1) the claim raises a novel or complex issue of State law, (2) the claim

substantially predominates over the claim or claims over which the district court

has original jurisdiction, (3) the district court has dismissed all claims over which
it has original jurisdiction, or (4) in exceptional circumstances, there are other
compelling reasons for declining jurisdiction.

28 U.S.C. § 1367(c).

In this case the exercise of supplemental jurisdiction is proper as to the tortious
interference with economic advantage claim. First, no novel or complex issue of state
law is raised. Second, the state claim does not predominate over the federal claims.
Third, all the claims arise out of the same dispute over the '467 patent and therefore
derive “from a common nucleus of operative fact.” United Mine Workers of Am. v.
Gibbs, 383 U.S. 715, 725 (1966). Finally, no exceptional circumstances appear to be

present. Therefore, the Court will not decline to exercise supplemental jurisdiction and

accordingly denies the defendant’s motion to dismiss such claim for lack of jurisdiction.



Finally, when evaluating whether a transfer is convenient and fair under section
1404(a) this Court must consider public interest factors such as: “(1) the speed at which
the case will proceed to trial; (2) the court’s familiarity with the applicable law; (3) the
desirability of resolving controversies in their locale; and (4) the relation of the
community to the occurrence at issue.” School Stuff, 2001 WL 558050, at *6.

First, data shows that the median disposition time of civil cases in the Northern
District of Illinois is faster than in the Northern District of Georgia, but the median time
from filing to trial of civil cases is faster in the Northern District of Georgia than the
Northern District of Illinois. However this factor usually is not a major factor of
importance. Rouse Woodstock, Inc. v. Surety Fed. Sav. & Loan Ass’n., 630 F. Supp.
1004, 1014 (N.D. Ill. 1986). Second, the court’s familiarity with the applicable law is not
relevant in this case because both the Northern District of Illinois and the Northern
District of Georgia are “equally well-equipped to accommodate patent infringement
cases.” Berol, 2002 WL 1466829, at *6. Clear Lam's nonfoam trays are sold
nationwide, therefore the alleged infringement presumably occurs in many states and, as
a result, several states have “equal interests in redressing the alleged infringement.” Jd.
at *5. Finally, the desirability of resolving controversies in their locale and the relation to
the community to the occurrence at issue does not favor either forum since Rock-Tenn
has plastic packaging plants in both Georgia and Illinois and Clear Lam has nationwide
sales. Therefore the public interest factors do not weigh significantly in favor of, or in
opposition to, transferring this case to the Northern District of Georgia.

A balancing of the relevant factors necessary to a transfer determination indicates
that in this case transfer to the Northern District of Georgia is appropriate. Transfer of

9


In this case Rock-Tenn asserts that Clear Lam’s tortious interference with
economic advantage claim is deficient because it fails to properly allege bad faith.
However, Clear Lam’s Second Amended Complaint alleges that Rock-Tenn made
defamatory statements regarding Clear Lam’s stability and ability to meet customer
needs, The statements were made to prospective customers and conveyed potentially
damaging information about Clear Lam far in excess of accurate notification of Rock-
Tenn’s patent rights. Such statements support an allegation of bad faith, and thus the
tortious interference claim is not deficient. Therefore the Court denies Rock-Tenn’s

motion to dismiss for failure to state a claim.

Tl. Motion to Transfer

Rock-Tenn seeks an order transferring this action from the Norther District of
Illinois to the Northern District of Georgia pursuant to 28 U.S.C. § 1404(a): “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). On a motion pursuant to section 1404(a), Rock-Tenn has
the burden to establish that “(1) venue is proper in both the transferor and transferee
court; (2) transfer is for the convenience of the parties and witnesses; and (3) transfer is
in the interests of justice.” School Stuff v. School Stuff, No. 00 C 5593, 2001 WL
558050, at *5 (N.D. Ill. May 21, 2001); Coffey v. Van Dorn Iron Works, 796 F.24 217,
219 (7th Cir. 1986). The party secking to transfer venue “has the burden of establishing,
by reference to particular circumstances, that the transferee forum is clearly more

convenient.” Coffey, 796 F.2d at 219-20.


IL. Rule 12(b)(6)

When ruling on a Rule 12(b)(6) motion to dismiss, courts must construe the
complaint “in the light most favorable to the plaintiff.” Caldwell v. City of Elwood, 959
F.2d 670, 671 (7th Cir. 1992). In keeping with this end, the facts pleaded in the
complaint are taken as true. Harris v. Brock, 835 F.2d 1190, 1193 (7th Cir. 1987).
Therefore, courts must consider “whether relief is possible under any set of facts that
could be established consistent with the allegations.” Bartholet v. Reishauer A.G.

(Zurich), 953 F.2d 1073, 1078 (7th Cir. 1992).

Rock-Tenn argues that Clear Lam’s state law claim of tortious interference with
economic advantage is preempted by federal patent law. 28 U.S.C. § 1338(a) states that
“(t]he district courts shall have original jurisdiction of any civil action arising under any
Act of Congress relating to patents, plant variety protection, copyrights and trademarks.”
See Rodime PLC v. Seagate Tech., 174 F.3d 1294, 1306 (Fed. Cir. 1999) (stating that
state law claims must entail elements in addition to patent laws to avoid preemption).
State law tortious interference claims are preempted by federal patent law if the state law
claim is based on the patent holder’s good faith communication regarding its rights under
federal patent laws. Zenith Elec. Corp. v. Exzec, 182 F.3d 1340, 1355 (Fed. Cir. 1999).
Therefore the plaintiff must allege and ultimately prove bad faith to avoid federal
preemption even if bad faith is not otherwise an element of the tort claim. Jd. The
determination of bad faith is a question of fact which is determined on a case by case
basis. Jd. Communication of accurate information about patent rights, whether by direct
notice to potential infringers or by publicity release, does not support a finding of bad
faith. See Mikohn Gaming Corp. v. Acres Gaming, 165 F.3d 891, 897 (Fed. Cir. 1998).

5



Third, while deference must be given to the plaintiff's choice of forum, the court
should determine whether a transfer is in the interest of justice. The interest of justice
analysis relates to the efficient functioning of the courts 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 221. As a general proposition, related litigation
should be transferred to a forum where consolidation is feasible. See id. at 220-21; Berol
Corp. v. BIC Corp., No. 02 C 0559, 2002 WL 1466829, *5 (N.D. Ill. July 8, 2002)
(“When pending litigation involves the same parties and similar legal, technical and
infringement issues, transfer to that venue is logical and strongly favored.”); Carus Corp.
v. Greater Texas Finishing Corp., No. 91 C 2560, 1992 WL 22691 (N.D. Il. Jan. 31,
1992) (granting transfer to federal court in Southern District of New York where three
cases were pending involving infringement of same patent by different defendants).

In this case, there are four other cases pending involving the '467 patent. The
coordination of discovery, the participation in and application of the Markman ruling,
and the desire to avoid conflicting judicial determinations strongly supports transferring
this case to Georgia. See Markman v. Westview Instr., 52 F.3d 967, 978-79 (Fed. Cir.
1995), aff'd, 517 U.S. 370 (1996). Clear Lam’s willingness to participate in and be
bound by the Northem District of Georgia’s Markman hearing does not overcome the
substantial benefits of transferring this case to the district where the related actions are
pending. Failure to transfer may lead to inconsistent judicial determinations regarding
the '467 patent and will likely cause unnecessarily repetitive discovery procedures and
hardship for witnesses who may be subject to multiple depositions regarding similar

claims regarding the '467 patent.



‘Minute Order Form (06/97) Boe Gd

4

Lr United States District Court, Northern District of Illinois

>
Name of Assigned Jud Sitting Judge if
vor Magistrate Judge Ronald A. Guzman han Assigned Judge
CASE NUMBER 02 C 7491 DATE 8/21/2003
CASE Clear Lam Packaging Inc vs. Rock-Tenn Company
TITLE

[In the following box (a) indicate the party filing the motion, ¢.g,, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.)

MOTION:
DOCKET ENTRY:
qd) a Filed motion of [ use listing in “Motion” box above.]
(2) Qo Brief in support of motion due
@) oOo Answer brief to motion due__. Reply to answer briefdue___.
(4) im} Ruling/Hearingon___—_setfor__—_—at
(5) a Status hearing[held/continued to] [set for/re-set for]on___setfor__—_att
(6) Oo Pretrial conference[held/continued to] [set for/re-set for]on__—_setfor_—at_—s
1) a Trial[set for/re-set for]on__—_at
(8) o [Bench/Jury trial] [Hearing] held/continuedto___—_at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreen:ent/pursuant to]
OOFRCP4(m) CLocal Rule 41.1 COFRCP41(aX(1) OO FRCP41(a)(2).
ao [Other docket entry] For the foregoing reasons stated in the attached memorandum opinion and

order, this Court denies the defendant’s motion to dismiss [39-1] and grants the defendant’s motion to
transfer this case to the Northern District of Georgia [15-1]. Enter Memorandum Opinion and Order.

(il) @ [For further detail see order attached to the original minute order.]
No notices required, advised in open court.

Document

No notices required.

umber of sven
Notices mailed by judge's staff. AG 22 2003
Notified counsel by telephone. due docket

| Docketing to mail notices,
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this case to the district where relevant actions are pending will ensure the uniformity of
the substantive rulings in this complex area of law while conserving judicial resources.
Any inconvenience Clear Lam may experience as a result of the transfer of this case is
“telatively insignificant in comparison to the interests of justice served by doing so.”
First Health Group Corp. v. Allcare Health Mgmt. Sys., No. 01 C 1790, 2001 WL
686777, at *2 (N.D. Ill. June 15, 2001). Therefore in the interests of justice and judicial
efficiency, the defendant’s motion to transfer this case to the Northern District of Georgia

is granted.

CONCLUSION

For the foregoing reasons, this Court denies the defendant’s motion to dismiss
[39-1] and grants the defendant’s motion to transfer to the Northern District of Georgia

(15-1).

SO ORDERED ENTERED:

HON. RONALD A. GUZMAN
United States Judge

10


First, venue is proper in both the transferor and transferee court. 28 U.S.C. §
1391(b) states that venue is proper in the judicial district where the defendant resides. In
addition, under section 1391(c), a corporation may be sued where it is incorporated,
licensed to do business or is doing business. In this case, Clear Lam is an Illinois
corporation that has nationwide sales. Rock-Tenn is a Georgia corporation with
nationwide sales and operations in both Georgia and Illinois. Accordingly, venue is
proper in both transferor and transferee districts.

Second, transfer is for the convenience of the parties and witnesses. When
evaluating the convenience of the parties and witnesses, courts consider: “(1) the
plaintiffs choice of forum, (2) the situs of the material events, (3) the relative ease and
access to sources of proof, (4) the convenience to the parties, and (5) the convenience of
the witnesses.” Technical Concepts L.P. v. Zurn Indus., No. C 5150, 2002 WL 31433408,
at *2 (N.D. il. Oct. 31, 2002). As an Illinois corporation, Clear Lam has a strong
preference against transferring this case to Georgia. Accordingly, they have submitted
declarations on behalf of some potential witnesses expressing the hardships associated
with transferring the case to Georgia. Conversely, Rock-Tenn has similarly strong
interests in favor of transferring the case to Georgia and submitted declarations on behalf
of its potential witnesses in this case supporting this preference. It is clear that
substantial amounts of information relevant to this case are located in both of Rock-
Tenn’s plastic packaging facilities in Georgia and Illinois. Weighing the respective
convenience of the parties and witnesses yields little significant support to favor or
disfavor a transfer to Georgia. In such a situation deference is generally given to the
plaintiff's choice of forum. Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 718 (7th Cir. 2002).

7



Rock-Tenn is a Georgia corporation and its plastic packaging division, which
markets and sells nonfoam trays under the name Durafresh®, is headquartered in
Norcross, Georgia and has a second facility in Franklin Park, Mlinois. (/d. at 4.) The four

, inventors of the '467 patent are residents of Georgia. (Id. at 5.) Rock-Tenn claims that
the majority of documents, data compilations or tangible things related to the '467 patent
are located in Georgia. Rock-Tenn’s potential witnesses are in Georgia, Illinois,
Missouri, Ohio, Georgia, Virginia, Massachusetts, Texas, South Dakota, and Arkansas.
(d.)

Clear Lam is an Illinois corporation whose principal place of business is in Elk
Grove Village, Illinois. (Second Am. Compl. { 1.) They filed the case in Illinois on
October 17, 2002. The majority of the plaintiff’s potential witnesses are located in
Illinois and its relevant documents are located in Illinois. (Pl’s. Mem. Opp. Def’s. Mot.
Transfer at 2-4.) Plaintiff promotes itself as a national company on its website.
(Borchers Decl. Ex. 4).

DISCUSSION
I, Rule 12(b)(1)

On a motion to dismiss under Rule 12(b){1), where the motion challenges the
sufficiency of the allegations of subject matter jurisdiction, the district court must accept
as true all well-pleaded allegations of the complaint, drawing all reasonable inferences in
the plaintiff's favor. United Transp. Union v. Gateway Western Ry. Co., 78 F.3d 1208,
1210 (7th Cir. 1996).

Rock-Tenn argues that this Court lacks subject matter jurisdiction over Clear
Lam’s state law tortious interference claim against Rock-Tenn. When deciding whether

3



foam trays. “The non-foam trays feature separation structures that permit manufacture,
storage, stacking, shipment, and dispensing on processing lines with minimum chance or
potential of the sort of locking together which can otherwise occur with non-foam
containers.” (Id.) Rock-Tenn is the assignee of the '467 patent. (Second Am. Compl.
8.)

Clear Lam’s Second Amended Complaint alleges that Rock-Tenn engaged in an
unlawful campaign throughout Illinois and elsewhere to interfere with Clear Lam’s
business with its customers and prospective customers. (Second Am. Compl. 4 39-45.)
The interference allegedly includes Rock-Tenn’s numerous contacts with customers and
prospective customers of Clear Lam, threats by Rock-Tenn to those customers and
prospective customers that they not engage in any further business with Clear Lam, and
various statements by Rock-Tenn to customers and prospective customers stating that
Clear Lam will not be able to continue in the packaging business. (Jd.)

“Prior to Clear Lam’s filing of this action on October 17, 2002, Rock-Tenn had
previously filed three patent infringement actions [against other entities] in the United
States District Court for the Northern District of Georgia asserting infringement of the
'467 patent.” (Def.’s Mem. Law Supp. Def.’s Mot. Transfer at 3.) “On November 13,
2002 Rock-Tenn filed a fourth patent infringement action in the Northern District of
Georgia [asserting] infringement” of the '467 patent. (/d.) “Like Clear Lam, three
defendants in the related actions . . . have asserted that Rock-Tenn’s '467 patent is
invalid.” Additionally, two defendants “have asserted that the '467 patent is
unenforceable.” (/d.) All four cases are pending before the Honorable Jack T. Camp in
the United States District Court for the Northern District of Georgia. (Id.)

2



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

EASTERN DIVISION
AUG 22 2003
CLEAR LAM PACKAGING, INC., )
)
Plaintiff, )
) 02 C 7491

v. )

) Judge Ronald A. Guzman
)
ROCK-TENN COMPANY, )
)
Defendant. )

(e) D OPINION AND ORDER

This is an action by Clear Lam Packaging, Inc. (“Clear Lam”) against Rock-Tenn
Company (“Rock-Tenn”) for a declaratory judgment of noninfringement, invalidity and
unenforceability of Rock-Tenn’s U.S. Patent No. 6,430,467 (‘‘the '467 patent”). In
addition, Clear Lam alleges tortious interference with economic advantage against Rock-
Tenn. Rock-Tenn has counterclaimed based on infringement. For the reasons set forth in
this Memorandum Opinion and Order, the Court denies the defendant’s motion to
dismiss and grants the defendant’s motion to transfer.

FACTS

Counts I through I of Clear Lam’s complaint seeks a declaration of invalidity,
unenforceability and non-infringement of the '467 patent, entitled “Processes for
Packaging Perishable and Other Products.” (Second Am. Compl., Ex. A, U.S. Patent
No. 6,430,467.) The patent relates to packaging and processes for facilitating fast,

efficient and reliable automated production line packaging of case-ready meat using non-

>