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Taidoc Technology Corporation v. Diagnostic Devices

August 23, 2012

TAIDOC TECHNOLOGY CORPORATION
v.
DIAGNOSTIC DEVICES, INC.,
OK BIOTECH CO. LTD., PRODIGY DIABETES CARE, LLC AND JOHN DOES 1-10



The opinion of the court was delivered by: Savage, J.

MEMORANDUM OPINION

The defendants, Diagnostic Devices, Inc. ("DDI"), OK Biotech Co. Ltd. ("OK Biotech") and Prodigy Diabetes Care, LLC ("Prodigy"), have moved to transfer this patent infringement action to the Western District of North Carolina where they have a pending action to enforce the terms of a settlement agreement and release arising out of earlier litigation in that district involving the same parties. They argue that the Western District of North Carolina, where the parties agree the action could have been brought, is the more appropriate forum because balancing the private and public factors favors transfer for the convenience of the parties and the witnesses. They also rely upon a forum selection provision in the settlement agreement entered into by the plaintiff, TaiDoc Technology Corporation ("TaiDoc").

Opposing the defendants' motion to transfer, TaiDoc invokes the first-filed rule. It contends that because this action was filed five days before the defendants filed an action against TaiDoc in the Western District of North Carolina, transfer is precluded. Additionally, TaiDoc argues that the defendants have failed to meet their burden under 28 U.S.C. § 1404(a) to justify transfer from the plaintiff's preferred forum.

After weighing all relevant factors and giving consideration to the plaintiff's preference and the forum selection provision, we conclude the balance tips in favor of transferring this action to the Western District of North Carolina. Therefore, the motion to transfer will be granted.

Discussion

A defendant moving for transfer of venue bears the burden of demonstrating that (1) the case could have been brought initially in the proposed transferee forum; (2) the proposed transfer will be more convenient for the parties and witnesses; and (3) the proposed transfer will be in the interest of justice. 28 U.S.C. § 1404(a); Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995); Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970). Once the defendant establishes that the action could have been brought in the proposed district, the court must weigh several private and public interest factors to determine whether the balance of convenience tips in favor of transfer. Jumara, 55 F.3d at 879-80.

Among the factors considered when determining whether transfer is more convenient for the parties and in the interest of justice are: (1) the plaintiff's choice of forum; (2) the defendant's preferred forum; (3) the place where the claim arose; (4) the relative ease of access to the sources of proof; (5) the convenience of the parties as demonstrated by relative financial status and physical location; (6) the availability of compulsory process for the attendance of witnesses; (7) the convenience of the witnesses; (8) the practical problems that make trial of a case expensive and inefficient; and, (9) "public interest" factors, such as congestion of court dockets and the relationship of the jury and the community. Jumara, 55 F.3d at 879-80. Depending on the nature and facts of the case, these factors overlap and are intertwined.

Because the analysis involved is "flexible and individualized," the district court has broad discretion in deciding a motion for transfer of venue. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). Despite this wide latitude, a transfer motion is not to be granted without a careful weighing of factors favoring and disfavoring transfer. See Shutte, 431 F.2d at 24-25.

Plaintiff's Choice of Forum and the Forum Selection Clause

The plaintiff's choice of forum typically receives "paramount consideration." Shutte, 431 F.2d at 25; see also Jumara, 55 F.3d at 879 (observing that plaintiff's choice of venue "should not be lightly disturbed" (citation and quotation omitted)). However, the plaintiff's choice is given less deference when none of the operative facts underlying the claim occurred there. See McMillan v. Weeks Marine, Inc., No. 02-6741, 2002 WL 32107617, at *1 (E.D. Pa. Dec. 2, 2002); Lindley v. Caterpillar, Inc., 93 F. Supp. 2d 615, 617 (E.D. Pa. 2000).

TaiDoc argues that the accused devices are sold in this district. However, it does not provide any information whether the sales here are substantial or otherwise proportionately higher here than in other districts. Indeed, it acknowledges that "the claim arises in the EDPA as well as other jurisdictions." Pl.'s Br. in Opp'n 4. According to TaiDoc's theory, the case could have been brought in any district in which it filed.

Other than an undetermined number of accused devices having been sold here, TaiDoc's only connection to this district is that its attorneys have their offices here. It has no corporate office or presence here. Nor do the defendants. Therefore, under these circumstances, where there are no predominant operative facts occurring in this district, TaiDoc's choice of forum need not be given paramount consideration.

There is a concern that TaiDoc is disregarding its earlier selection of the Western District of North Carolina as the appropriate forum. When it entered into the Settlement Agreement and Release five months ago in the litigation there, it agreed that any claims for breach of the agreement were "required" to be brought in Mecklenburg, North Carolina or the Western District of North Carolina. The forum selection clause will be given substantial consideration in the transfer analysis.

Forum selection clauses are entitled to "substantial consideration" in determining whether to transfer a case. Jumara, 55 F.3d at 880. Although the presence of a forum selection clause is afforded significant weight, it is not dispositive. Id. A forum selection clause is just one factor in balancing the convenience of the parties. Id. Nevertheless, the party seeking to avoid ...


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