The Software IP Report

Nominal Defendant in Forum Does Not Prevent Venue Transfer in Patent Case

By Charles Bieneman

Categories: Patent Civil Procedure, The Software IP Report

Venue could not be established in an Illinois patent case simply by naming a “peripheral defendant” located in Illinois.  A motion to transfer venue to the Central District of California, the locale having the most connections to the alleged infringement, was therefore granted.  Oplus Technologies, Ltd. v. Sears Holdings Corp., No. 11-cv-8539 (N.D. Ill. June 15, 2012).  The court also severed and stayed claims pending against Sears, the peripheral defendant, pending adjudication of claims against Vizio, the main defendant.

Oplus sued Vizio and Sears in the Northern District of Illinois, alleging infringement of two patents relating to video signal technology.  Vizio made, imported, and sold the accused products, which it had supplied to Sears, but only up until two years before the lawsuit was filed.  Further, “Sears had no involvement in the design, development, manufacture or any other aspects of the accused Vizio products.”  Moreover, Vizio had provided Sears’ counsel in the action after Sears made a tender of defense and indemnity, which Vizio accepted.

First addressing the motion to sever and stay claims against Sears, the court stated that Sears was the kind of peripheral patent infringement defendant who had nothing substantive to offer to the lawsuit.  Sears constituted only a very minor portion of Vizio’s sales of accused products.  As stated above, Vizio had no role in designing or developing the products, and, as the plaintiff did not deny, had “no relevant information regarding the accused products.”  Severing and then staying the claims against Sears would serve judicial economy, particularly because Vizio was defending, and had indemnified, Sears.

Next considering the motion to transfer venue under 28 U.S.C. § 1404(a), the court considered “(1) the plaintiff’s choice of forum, (2) the convenience of the parties, (3) the convenience of the witnesses, (4) the interests of justice, and (5) the location of the material events giving rise to the case.”  Although the plaintiff’s choice of forum is ordinarily accorded significant weight, most of the witnesses and relevant evidence in this case were located in the Central District of California.  Because the “situs of material events clearly is the Central District of California, where Vizio is headquartered and operates its principal place of business,” the court concluded that “Oplus’s choice of the Northern District of Illinois is afforded little weight.”

Thus, weighing all of the relevant factors, the court granted Vizio’s “motion to sever and transfer claims against Vizio and stay claims against Sears.”  Further, the court stayed the claims against Sears.