Location Of Defendant’s Principal Place Of Business A “Critical And Controlling Consideration” In Motion To Transfer Venue In Patent Infringement Case

by Varnum LLP
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In The William M. Yarbrough Foundation v. Garcoa Laboratories Inc., the Honorable Gordon J. Quist of the United States District Court for the Western District of Michigan transferred the plaintiff's patent infringement claim from the Western District of Michigan to the Central District of California pursuant to 28 U.S.C. § 1404(a). The opinion is significant because it adopted several legal principles announced by other federal district courts concerning motions to transfer venue, including the following:

  1. Although the plaintiff's choice of forum is entitled to "substantial weight" in the transfer analysis, "the convenience of the plaintiff's counsel is not entitled to any weight in the analysis."
  2. In patent infringement cases where the defendant's products are sold throughout the country, "a sale in a particular state is not determinative of the situs of the injury."
  3. "The location of the infringer's principal place of business is often a critical and controlling consideration because such suits often focus on the activities of the alleged infringer, its employees, and its documents, rather than upon those of the plaintiff."
  4. "In a patent infringement case, practicality and convenience are best served when it is prosecuted where the alleged acts of infringement occurred and the defendant has a regular and established place of business so as to facilitate production and investigation of books, records, and other data necessary to the trial techniques employed in the patent field."
  5. The convenience of expert witnesses for the parties "is entitled to minimal weight in the transfer analysis."
  6. Due to advances in copying technology and information storage, "the accessibility and location of sources of proof should weigh only slightly in the court's transfer analysis."
  7. The venue's familiarity with governing state law "is generally given little weight in the federal courts because federal courts are incapable of applying substantive law of other states."
  8. "In a patent infringement case, where the accused systems are used nationwide, the alleged injury does not create a substantial local interest in any particular district."

Upon applying these principles to the facts at issue, the court had little difficulty concluding that the plaintiff's complaint should be transferred to the Central District of California, the home district of the defendant. Given the legal principles set forth in the opinion, particularly the court's description of the location of the defendant's business as a "critical and controlling factor" in patent infringement cases, it appears that patent infringement cases will be difficult to maintain in the Western District of Michigan against a motion to transfer, except where the defendant has its principal place of business (or very significant related business activity) in the Western District of Michigan.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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