Opinion
02 Civ. 4847 (SAS)
February 19, 2003
Martin B. Pavane, Esq., Myron Cohen, Esq., Roger S. Thompson, Esq. COHEN, PONTANI, LIEBERMAN PAVANE, New York, NY., For Plaintiff.
Arthur M. Lieberman, Esq., Abbey Green, Esq., LIEBERMAN NOWAK, LLP New York, NY., Richard Ross, Esq., Davie, Florida, For Defendants.
MEMORANDUM OPINION AND ORDER
On February 7, 2003, Defendants Thomas Plastics, Inc. d/b/a Merchandising Resources, Larry Schwarz, the Linder Group, and Nathan Linder (collectively, "TPI") moved to transfer this action for infringement of United States Patent No. 5,813,569 ("`569 Patent'") to the Southern District of Florida or stay it pending the resolution of Thomas Plastics, Inc. v. Moshe Horowitz and Elite Licensing, Inc., 01-7837-CIV (S.D. Fla) (Ferguson, J.) ("the Florida Action"). For the reasons set forth below, TPI's motion is denied.
I. PROCEDURAL HISTORY
TPI filed the Florida Action against plaintiff Elite Licensing, Inc. ("Elite") and its president Moshe Horowitz on December 5, 2001, seeking a declaratory judgment that the `569 Patent was not infringed, was invalid, and/or was unenforceable, or, in the alternative, that TPI's exclusive licensing agreement with Elite was still in full force and effect. See Complaint for Declaratory Relief, 01 Civ. 7837, Ex. A to 2/6/03 Declaration of Roger Thompson in Support of Defendants' Motion to Transfer or Stay Action ("Def. Mem.")
TPI also brought claims for unjust enrichment, fraud in the inducement of the License, and tortious interference.
On or about April 25, 2002, Elite moved to dismiss the Florida Action for lack of personal jurisdiction, improper venue, and failure to state a cause of action upon which relief can be granted. Then, on June 28, 2002, TPI moved to enjoin Elite from prosecuting the New York action, which Elite had instituted on June 24, 2002. Lastly, on July 17, 2002, Elite moved to dismiss the Florida Action for lack of subject matter jurisdiction.
All of the motions in Florida were referred to Magistrate Judge Lurana S. Snow, who issued a series of Reports and Recommendations on December 20, 2002. On February 11, 2003, District Judge Ferguson granted the motion to dismiss for improper venue and transferred the Florida Action to this Court. See Order on Report and Recommendation, Thomas Plastics (Feb. 12, 2003) ("Florida Order"). TPI then filed a motion for reconsideration of the Florida Order, which was denied on February 14, 2003. See Order on TPI's Emergency Motion for Reconsideration of Order Transferring Action to the Southern District of New York, Thomas Plastics (Feb. 14, 2003)
II. APPLICABLE LAW
The general rule for determining "whether a properly brought declaratory action to determine patent rights should yield to a later-filed suit for patent infringement favors the forum of the first-filed action, unless considerations of judicial and litigant economy, and the just and effective disposition of disputes, requires otherwise." Genetech, Inc. v. Eli Lilly and Co., 998 F.2d 931, 937 (Fed. Cir. 1993) (emphasis added). That is, the preference for the first-filed suit should yield when all interests would be better served in another forum. See Kerotest Manufacturing Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 184 (1952). "There must, however, be sound reason that would make it unjust or inefficient to continue the first-filed action," such as "the convenience and the availability of witnesses, or absence of jurisdiction over all necessary or desirable parties, or the possibility of consolidation with related litigation . . . ." Genetech, 998 F.2d at 938. Courts should avoid "`rigid mechanical solution[s]' to questions of forum" and consider the "`conservation of judicial resources and the comprehensive disposition of litigation.'" Id. (quoting Kerotest, 342 U.S. at 183)
III. DISCUSSION
Although the Florida Action is the first filed action here, the interests of justice require that this Court retain jurisdiction. Judge Ferguson has already decided that venue is improper in the Southern District of Florida and transferred the Florida action to the Southern District of New York. For this Court to transfer the action back to a court that has already determined that venue is improper would be irrational.
In addition, a motion for a preliminary injunction, filed on December 19, 2002, is currently pending before this Court. The motion has been fully briefed and a hearing is scheduled for February 21, 2003. To transfer this case now, would significantly delay the resolution of Elite's motion. Because Elite is entitled to a timely decision on its request for emergency relief and the Court already has invested significant resources in the adjudication of the motion, it would be unjust and inefficient to transfer this action now.
Lastly, although the convenience of the parties is equally balanced here, the availability of witnesses tips in favor of adjudication in New York because Lawrence Cihanek — an important non-party, non-expert witness in this case — is within the subpoena power of this Court but not the Florida Court. See Hernandez v. Graebel Van Lines, 761 F. Supp. 983, 990 (E.D.N.Y. 1991) (stating that the ability to compel the attendance of nonparty witnesses to testify at trial "is a significant factor in the . . . consideration of [a] transfer motion.") (citing Arrow Elecs., Inc. v. Docommun Inc., 724 F. Supp. 264, 266 (S.D.N.y. 1989)). Because Cihanek's testimony is critical to the resolution of TPI's claims of non-infringement, invalidity, and/or unenforceability of the `569 Patent, there is sound reason for the case to remain in New York.
Defendant Thomas Plastics' principal place of business is in Florida. See Declaration of Larry Schwarz, Ex. 3 to Def. Mem. ("Schwarz Dec."), ¶ 2. Individual defendant Larry Schwarz resides in Florida.See Schwarz Dec. ¶ 4. Individual defendant Linder is the president of Linder Group, Inc., a Florida corporation with its principal place of business in the Southern District of Florida, and consents to the jurisdiction of the Florida Court. See Declaration of Nathan Linder, Ex. 5 to Def. Mem. However, Plaintiff Horowitz is a resident of New York and Elite is a New York corporation.
IV. CONCLUSION
Because there are compelling reasons for this Court to retain this case, TPI's motion for a transfer is hereby denied.
TPI's alternative request for a stay pending the resolution of the Florida Action is moot because the Florida Action has now been transferred to and is pending in this Court. The FLorida Action and the New York Action will be consolidated.
SO ORDERED: