MARK FALK, Magistrate Judge.
This is a declaratory judgment case relating to patent infringement. Plaintiff, LifeCell Corporation, filed a Complaint seeking a declaration of non-infringement of United States Patent No. 9,125,971 ("the `971 patent"), which is held by Defendant LifeNet Health. As is explained more herein, this is another round in an ongoing patentrelated fight between the two companies, which continues to this day in Virginia.
Defendant LifeNet has moved to dismiss the Complaint for lack of federal subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1), or in the alternative, to transfer the case to the United States District Court for the Eastern District of Virginia, pursuant to 28 U.S.C. § 1404(a). No argument is necessary. Fed. R. Civ. P. 78(b). For the reasons stated below, the motion to transfer venue is
Plaintiff LifeCell is a Delaware corporation with its principal place of business in New Jersey. LifeCell is a regenerative medicine company that makes and sells soft tissue grafts known as reconstructive or regenerative tissue materials. Defendant LifeNet is a Virginia company with its principal place of business in Virginia. LifeNet is a nonprofit corporation that provides transplant solutions, from tissue and organ procurement to bioimplant technologies and cellular therapies. Relevant here, LifeNet is the assignee of two affiliated patents: (1) United States Patent No. 6,569,200 ("the `200 patent"); and (2) the `971 patent. The claims of both the `200 and `971 patents are directed to "plasticized soft tissue grafts and methods of making and using same."
In September 2013, LifeNet sued LifeCell in the United States District Court for the Eastern District of Virginia, alleging that LifeCell infringed the `200 patent by making and selling certain soft tissue grafts, see LifeNet Health v. LifeCell Corp., Civ. A. No. 13-CV-486-HCM-DEM (E.D. Va.) ("LifeNet I"). During the pendency of that case, the parties engaged in settlement negotiations, and, in order to facilitate open communication, executed a "Confidentiality and Non-Disclosure Agreement in Connection with Settlement Discussions" (referred to as "the Non-Disclosure Agreement"). The case did not ultimately settle.
On November 18, 2014, after a ten-day jury trial before the Honorable Henry C. Morgan, Jr., U.S.D.J., a federal jury found the `200 patent valid and infringed by LifeCell, resulting in a $35 million verdict. In addition, District Judge Morgan denied LifeCell's post judgment motions.
On April 3, 2015, LifeCell appealed LifeNet I to the United States Court of Appeals for the Federal Circuit, where it remains pending.
On September 8, 2015, the United States Patent and Trademark Office granted LifeNet a second patent—the `971 patent. The same day the USPTO granted the patent, LifeCell filed its original Complaint in this Court, seeking, pursuant to the Declaratory Judgment Act §§ 2201-02, a declaration that LifeCell did not infringe the `971 patent.
On October 21, 2015, LifeNet filed a second lawsuit in the Eastern District of Virginia.
Following the filing of an Amended Complaint, on November 30, 2015, LifeNet filed the present motion to dismiss or transfer. LifeNet alleges that the Complaint should be dismissed because there is not yet a "justiciable controversy" between the two companies relating to the `971 patent, depriving the Court of subject matter jurisdiction. In the alternative, LifeNet requested a Section 1404 transfer to the Eastern District of Virginia where the LifeNet I jury trial occurred and where LifeNet II is currently pending. According to LifeNet, LifeCell commenced the lawsuit in New Jersey not because its place of business is here, but to dodge further litigation in Virginia, a forum it supposedly wants to avoid.
LifeCell opposes both motions. It agrees that the `971 and `200 patents are "in the same family of patents," which in its view supports the notion that there is a case or controversy. In other words, since the two patents are closely related—and in view of the parties' litigation history including the jury verdict—LifeCell is appropriately seeking a judicial declaration that it does not infringe the `971 patent. On the question of transfer, LifeCell contends that its choice of a New Jersey forum is more convenient and should not be disturbed, and that transfer does not benefit judicial economy or efficiency or the interests of the relevant parties and witnesses.
As is explained more below, a transfer to the District of Virginia is appropriate in this case. The parties started their patent dispute in Virginia and that's where it should finish.
Section 1404 provides the Court with discretion, in the interests of justice and for the benefit of the parties, to determine which district is best positioned to hear a dispute. District Judge Morgan in Virginia conducted a lengthy jury trial relating to the `200 patent and is obviously well-versed in the science associated with the patent and the similar `971 patent. Indeed, LifeCell admits that the technology involved in the jury trial is related to the technology in this case. District Judge Morgan is also presiding over the lawsuit relating to the Non-Disclosure Agreement—LifeNet II— which implicates disclosures in the pleading that started this New Jersey case. It does not seem practical to have two different District Judges dedicate the resources necessary to address the same complicated patent issues. Under the circumstances, transfer also promotes the goal of federal patent uniformity, an important principle in the federal patent scheme. Most importantly, the specific Section 1404 factors make it clear the case belongs in Virginia; i.e., the third-party inventors of the `971 patent reside there; the District Court in Virginia is already handling a related lawsuit (LifeNet II), conserving judicial resources; and the federal case management statistics suggest the Eastern District of Virginia is relatively less congested than New Jersey.
28 U.S.C. § 1404(a) provides federal courts with authority to transfer a case to another district "where it may have been brought," when doing so is "[f]or the convenience of the parties and witnesses, "or in "the interests of justice."
"There is no definitive formula or list of factors to consider when deciding a motion to transfer."
The moving party bears the burden of establishing that the proposed transferee forum is more convenient for the parties and witnesses.
In Virginia, there was a trial and a substantial jury verdict relating to a patent in the "same family" as the patent in this case involving the same parties. The patents in LifeNet I and this case are alleged to involve the same general issues and technology. And District Judge Morgan in the Eastern District of Virginia is familiar with the technology at issue and presided over the LifeNet I jury trial, not to mention the entirety of the case, which included discovery and a Markman opinion on a "family" patent. Judge Morgan is also presiding over the LifeNet II lawsuit that bleeds across the three cases binding them all together. On a practical level, the notion that two different judges should be simultaneously evaluating complex patent questions arising out a dispute between the same parties, similar patents and similar technology is contrary to the concept of judicial economy and exactly the type of situation the transfer statute is designed to prevent.
In addition, as is explained below, the public and private factors involved in a traditional Section 1404 analysis strongly compel transfer of this case to where it belongs—Virginia.
A plaintiff's choice of forum is entitled to consideration.
LifeCell claims that the case should remain in New Jersey because it is a New Jersey company; employs New Jersey residents; has its research and development teams in New Jersey; and because it ships its products from New Jersey.
It might seem that LifeCell selected an appropriate forum that should be entitled to deference. However, the deference generally afforded to a plaintiff's forum is lost when the lawsuit that is filed is regarded as "anticipatory suit."
This Court is not in a position to conclusively determine LifeCell's motivations at the time they filed this case in New Jersey. But it is true that LifeCell filed suit the same day that `971 patent issued. Moreover, it is alleged that LifeCell did this because it was aware, from the proceedings in LifeNet I, of LifeNet's "enforcement plan" for protecting its other patents, including the `971, which seemingly contemplated further litigation in Virginia.
Convenience of witnesses and access to sources of proof are important considerations in a Section 1404(a) analysis.
LifeNet has demonstrated that Virginia is clearly the more convenient and appropriate forum with respect to this factor. The parties' books and records and the convenience of their employees cancel each other out and do not warrant discussion. Instead, the issue turns on non-parties.
LifeNet identifies Lloyd Wolfinbarger, Jr., Robert K. O'Leary, and Billy G. Anderson as the inventors of the `971 patent. Mr. Anderson is deceased. Messrs. Wolfinbarger and O'Leary are no longer employees of LifeNet and are not under the company's control; both, however,
In response, LifeCell downplays the inventors' importance, noting that they eventually participated by videotape in LifeNet I. Perhaps, but this Court lacks authority over these Virginia-based witnesses, and presupposes how the District Court would treat the inventors in connection with this case. The fact is that they are important non-party witness who are not under the control of any party and reside in the Eastern District of Virginia. To the contrary, LifeCell fails to identify any third-parties that would be unavailable for trial in Virginia. Indeed, the only non-party LifeCell mentions is Gabriella Dahlgren, a former staff scientist no longer employed by the company; however, Dr. Dahlgren voluntarily appeared for trial in LifeNet I.
The availability of compulsory process for the inventors of the `971 patent overwhelmingly weighs in favor of transfer to the Eastern District of Virginia. Absent a transfer to the Eastern District of Virginia, this Court may be forcing a case to proceed to trial without two of the most important witnesses in the case.
As has been discussed above, it is impossible to ignore that LifeNet II is pending with the same parties before the same District Judge in Virginia that presided over LifeNet I, and that those cases have some practical overlap with the present case. The cases are not the same, and LifeCell is correct that a patent infringement case involves different considerations generally from a breach of contract case. Nor does the Court necessarily assume that this case would be consolidated with LifeNet II in Virginia. But, the technology is the same; the District Judge in Virginia is the same; and LifeNet II is a pending lawsuit filed in Virginia arising out of settlement discussions that occurred in Virginia and a contract created in Virginia.
LifeCell's position is that the Eastern District of Virginia's experience with these patents should essentially be ignored, citing Federal Circuit case law that rejects the notion that "once a patent is litigated in a particular venue the patent owner will necessarily have a free pass to maintain all future litigation . . . in that venue."
Both
This is a different case. Here, the Court has explained that the convenience of the parties and witnesses warrants transfer, and that LifeCell's choice of forum is neutralized. Indeed, the consideration of witnesses and compulsory process demonstrates why this case should be transferred to a forum that can, if it wishes, enforce subpoenas issued to crucial third-parties—the inventors of the `971 patent.
Unlike
In light of the availability of preferable, appropriate alternative forum, it is almost inconceivable to imagine this case proceeding in New Jersey when this Court is effectively powerless to compel the participation of the inventors of the `971 patent. Such is the importance of compulsory process, especially here when the witnesses at issue were uncooperative during the pendency of LifeNet I. LifeCell simply cannot overcome this compelling decision point. The interests of justice and the convenience of the parties mandate transfer to Virginia.
For the reasons provided above, Defendant's motion to transfer [ECF No. 29] is