Case 3:12-cv-02738-CAB-MDD Document 32 Filed 11/08/12 Page 1 of 11
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` UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF INDIANA
`SOUTH BEND DIVISION
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`CAUSE NO: 3:12-cv-438-JD-CAN
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`)))))))))
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`WARSAW ORTHOPEDIC, INC., et al.,
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`Plaintiffs,
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`v.
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`NUVASIVE, INC.,
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`Defendant.
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`OPINION AND ORDER
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`On September 4, 2012, Defendant, NuVasive, Inc., filed a motion seeking transfer of this
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`case to the Southern District of California pursuant to 28 U.S.C. § 1404(a). On September 21,
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`2012, Plaintiffs, Warsaw Orthopedic, Inc. (“Warsaw”), Medtronic Sofamor Danek U.S.A., Inc.
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`(“Medtronic U.S.A.”), Medtronic Puerto Rico Operations Co. (“Medtronic Puerto Rico”), and
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`Osteotech, Inc. (“Osteotech”), filed a response. On October 1, 2012, Defendant filed a reply.
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`For the following reasons, the Court GRANTS Defendant’s motion to transfer.
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`I.
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`RELEVANT BACKGROUND
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`On August 17, 2012, Plaintiffs, Warsaw,1 Medtronic U.S.A.,2 Medtronic Puerto Rico,3
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`and Osteotech,4 brought this suit in the Northern District of Indiana against Defendant,
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`NuVasive, Inc., alleging infringement of three patents in the manufacture and sale of medical
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`devices and procedures used in spinal surgery. Warsaw is also the sole remaining plaintiff in an
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`1Warsaw is an Indiana corporation with its principal place of business in Warsaw, Indiana.
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`2Medtronic U.S.A. is a Tennessee corporation with its principal place of business in Memphis, Tennessee.
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`3Medtronic Puerto Rico is a Cayman Islands corporation with its principal place of business in Humacao,
`Puerto Rico.
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`4Osteotech is a Delaware corporation with its principal place of business in Eatontown, New Jersey.
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`Case 3:12-cv-02738-CAB-MDD Document 32 Filed 11/08/12 Page 2 of 11
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`ongoing patent infringement action against NuVasive in the Southern District of California.5
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`Case No. 3:08-CV-1512-CAB-MDD. The California case involves thirteen patents also related
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`to medical devices and procedures used in spinal surgery. Because of the complexity of the
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`California case, it is being litigated in three phases.
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`Phase I concluded with a jury verdict on September 20, 2011. In March, 2012, the
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`parties filed cross appeals in the Federal Circuit following the California court’s order granting
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`final judgment as to the Phase I claims pursuant to Federal Rule of Civil Procedure 54(b). On
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`August 2, 2012, the Federal Circuit dismissed the appeals because the question of royalties had
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`not been sufficiently resolved to justify a final judgment order. On August 17, 2012, the Indiana
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`Plaintiffs filed their complaint with this Court. Defendants filed the instant motion for transfer
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`on September 4, 2012. As of a status conference with the California court on September 5, 2012,
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`discovery as to Phase II of the California case was ongoing while the court was completing its
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`consideration of royalties in Phase I as directed by the Federal Circuit.
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`Warsaw currently owns all three patents at issue in the Indiana case.6 Warsaw has
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`various licensing arrangements with Medtronic U.S.A. or Medtronic Puerto Rico to use, make,
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`have made, import, offer for sale, or sell products under the designated patents. Osteotech
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`owned one of the patents until April 15, 2011, which gives it rights to that patent through that
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`date. None of the three Indiana patents are at issue in the California case. However, both cases
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`allege infringement involving NuVasive’s CoRoent XL line of implants, MaXcess line of
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`5Indiana plaintiffs Medtronic U.S.A. and Medtronic Puerto Rico were voluntarily dismissed from the
`California case on August 16, 2010, along with Medtronic Sofamor Danek Deggendorf GmbH. [Doc. No. 24-1].
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`6The Court will refer to the three patents at issue in the Indiana case as “the Indiana patents,” and the
`thirteen patents at issue in the California case as “the California patents.”
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`2
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`Case 3:12-cv-02738-CAB-MDD Document 32 Filed 11/08/12 Page 3 of 11
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`retractors, and its XLIF surgical procedure. NuVasive’s Osteocel Plus bone graft product is
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`implicated in the Indiana case, but not the California case.7
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`In its motion, NuVasive argues that transfer to the Southern District of California would
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`be in the interest of justice and more convenient for the parties and witnesses largely because of
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`the similar patent infringement case pending in the California court. This Court agrees.
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`II. ANALYSIS
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`Pursuant to 28 U.S.C. § 1404(a), a federal district court may transfer any civil action to
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`any other district for the convenience of the parties and witnesses and in the name of justice if
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`venue is proper in both courts. Therefore, transfer analysis involves separate inquiries into (1)
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`proper venue in both the transferor and transferee courts; (2) the convenience of parties and
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`witnesses; and (3) the interest of justice. Research Automation Inc. v. Schrader-Bridgeport Int’l,
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`Inc., 626 F.3d 973, 978 (7th Cir. 2010). The burden is on the movant to show that transfer is
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`warranted. Coffee v. Van Dorn Iron Works, 796 F.2d 217, 219–20 (7th Cir. 1986). However, the
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`statute allows for a “flexible and individualized” analysis of the unique issues raised in a
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`particular civil action, which therefore places considerable discretion in the transferor court
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`when deciding whether transfer is appropriate. Research Automation, 626 F.3d at 977–78 (citing
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` Stewart Org., Inc. v. Ricoh Corp., et al., 487 U.S. 22, 29 (1988)).
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`A.
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`Venue is proper in the Northern District of Indiana and the Southern
`District of California.
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`28 U.S.C. § 1391(b)(1) provides that venue is proper in a judicial district in which any
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`defendant resides, if all defendants are residents of the state in which the district is located. For
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`7On June 25, 2010, the California court denied as untimely Warsaw’s attempt to accuse the Osteocel Plus
`product of infringing one of the patents litigated in Phase I of the California case. [Doc. No. 24-2].
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`venue purposes, a defendant is deemed to reside in the judicial district in which such defendant
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`is subject to the court’s personal jurisdiction with respect to the civil action in question.
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`Id. § 1391(c)(2). In addition, patent infringement actions may be brought in the district “where
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`the defendant resides, or where the defendant has committed acts of infringement and has a
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`regular and established place of business.” Id. § 1400(b).
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`NuVasive is a Delaware corporation with its principal place of business in San Diego,
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`California. In their complaint, Plaintiffs allege that NuVasive has regular and systematic
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`contacts with the State of Indiana based on their business activities in the State. Because
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`NuVasive does not challenge Plaintiffs’ assertion, the Court assumes that NuVasive has the
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`requisite minimum contacts with the State and is subject to personal jurisdiction in the Northern
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`District of Indiana. See Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 787
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`(7th Cir. 2003). Therefore, venue is proper in the Northern District of Indiana. Venue is also
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`proper in the Southern District of California because NuVasive’s business is established there.
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`Having determined that venue is proper in both districts, the Court will now analyze the interest
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`of justice and convenience factors and explain why transfer in this case is appropriate.
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`B.
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`Interest of Justice
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`An assessment of the interest of justice focuses on the efficient administration of the
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`court. Research Automation Inc., 626 F.3d at 978. Factors that are relevant to this analysis
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`include: (1) the speediness of trial in either jurisdiction; (2) each court’s familiarity with the
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`relevant law; and (3) each location’s relationship to the controversy. Id.
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`1.
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`Speediness of trial
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`Plaintiffs argue that transfer will unduly delay the litigation of the Indiana patents. The
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`Case 3:12-cv-02738-CAB-MDD Document 32 Filed 11/08/12 Page 5 of 11
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`average time to trial is 3.5 months shorter in the Northern District of Indiana than in the Southern
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`District of California. [Doc. No. 30-16]. Therefore, the difference between the average times to
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`trial weighs in favor of venue in the Indiana court, if only slightly.
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`However, Plaintiffs also accuse NuVasive of intentional delay in the Indiana case. Both
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`parties report an e-mail exchange they shared in September 2012, in which NuVasive refused to
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`incorporate the litigation of the Indiana patents into Phase II of the California case in exchange
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`for Plaintiffs’ consent to transfer. [Doc. Nos. 30-3, 31-9]. In that exchange, NuVasive informed
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`Plaintiffs that it would be more efficient to litigate the Indiana patents, regardless of the forum,
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`after the Phase I appeal is resolved. Therefore, it is likely that NuVasive will seek to ensure that
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`the Phase I appeal is completed before the Indiana patents are litigated. Any resulting delay
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`would be the same in either forum, which favors neither forum. Overall, the speediness factor
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`favors neither forum significantly and consequently weighs against transfer.
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`2.
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`Court’s familiarity with applicable law
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`Because of the overlapping accused products and procedures involved in litigating both
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`the California patents and the Indiana patents, the issues that will be raised in this case are
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`similar to those already before the California court. Plaintiffs argue, however, that the Indiana
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`patents and claims are completely different from those raised in the California case diminishing
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`the value of that court’s familiarity with the California case. The Court disagrees. Patent
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`litigation is very complex. Even though the California court has not considered the Indiana
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`patents, its investment in learning about the overlapping products and procedures and the
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`relationships among the parties is significant. The Indiana court would need to invest similar
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`time, energy, and resources into developing background knowledge on the products and parties
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`Case 3:12-cv-02738-CAB-MDD Document 32 Filed 11/08/12 Page 6 of 11
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`in order to adjudicate the Indiana claims properly. This duplicative effort would hinder judicial
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`efficiency.
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`The same concern for judicial economy counters Plaintiffs’ argument that the current
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`presiding judge in the California case is not significantly more familiar with issues relevant to
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`the Indiana patents than the Indiana court. The Honorable Cathy Ann Bencivengo was assigned
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`to the California case on March 2, 2012, after the conclusion of the Phase I trial . [Doc. No. 30-
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`10]. Six months later on September 5, 2012, she presided over a hearing in which she indicated
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`that she was preparing an order to resolve the royalties issue raised by the Federal Circuit
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`regarding Phase I while simultaneously managing the litigation of Phase II. [Doc. Nos. 30-2, 31-
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`3]. Judge Bencivengo’s investment of judicial resources in preparing the royalties order alone
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`makes her familiar with pertinent facts and law related to the Indiana case. Therefore, the
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`California court’s familiarity with relevant products and parties promotes judicial economy and
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`efficiency, which in turn, favors transfer.
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`3.
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`Relationship to controversy
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`Indiana has a strong state interest in affording the protections of justice to its citizens,
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`including its corporations like Warsaw. Warsaw owns the patents at issue in the Indiana case
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`and manufactures products for use in spinal surgery at its Indiana facility. However, Warsaw
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`does not manufacture any of the products that practice the Indiana patents in Indiana. Moreover,
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`neither NuVasive nor any of the other Plaintiffs have any substantial direct connection to
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`Indiana.
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`Yet the parties’ dispute is directly related to California. First, Warsaw and two of the
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`Indiana Plaintiffs initiated related litigation that continues to this date in the California court.
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`Second, the controversy in this Court stems from NuVasive’s alleged infringement of the Indiana
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`patents. In patent infringement cases, “the location of the infringer's principal place of business
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`is often the critical and controlling consideration because such suits often focus on the activities
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`of the alleged infringer, its employees, and its documents, rather than upon those of the
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`plaintiff.” Oplus Techs., Ltd. v. Sears Holding Corp., No. 11-cv-9029, 2012 WL 2400478, at *4
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`(N.D. Ill. June 21, 2012) (quoting Cooper Bauck Corp. v. Dolby Labs., Inc., No. 05 C 7063,
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`2006 WL 1735282, at * 5 (N.D. Ill. June 19, 2006)). NuVasive’s principal place of business is
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`in San Diego, California. Therefore, the controversy is predominantly focused on activities in
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`California where NuVasive is located. California’s stronger relationship to the controversy
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`favors transfer.
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`B.
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`Analysis of the convenience of the parties and witnesses favors transfer.
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`In evaluating the convenience element, courts generally consider: (1) the plaintiff’s
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`choice of forum; (2) the situs of material events; (3) the relative ease of access to sources of
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`proof; (4) the convenience of witnesses; and (5) the convenience of the parties. Schumacher v.
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`Principle Life Ins. Co., 665 F. Supp. 2d 970, 977 (N.D. Ind. 2009).
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`1.
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`Plaintiff’s choice of forum
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`When considering the convenience factor, a plaintiff’s choice of forum is entitled to
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`substantial deference, especially when the chosen forum is the plaintiff’s home forum. Am.
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`Commercial Lines, LLC v. Ne. Maritime Inst., Inc., 588 F. Supp. 2d 935, 945 (S.D. Ind. 2008).
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`Yet, the plaintiff’s choice of forum is not always the controlling factor for the court when the
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`totality of the factors suggests a stronger nexus between the transferee court and relevant events.
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`Research Automation, 626 F.3d at 979.
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`The Indiana court’s nexus to this case emanates from Warsaw’s status as an Indiana
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`corporation with its principal place of business in this district, its ownership of the patents at
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`issue, and its conduct of manufacturing, sales, and other business functions in this district. In
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`addition, Plaintiffs may have chosen the Indiana court to avoid delay in resolving the disputes
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`related to the Indiana patents, as is their prerogative. NuVasive argues, however, that Plaintiffs
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`engaged in blatant forum shopping by filing their complaint in the Indiana court. NuVasive’s
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`argument carries some weight in light of Plaintiffs’ statement to both NuVasive and the
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`California court that they were willing to consent to transfer in exchange for NuVasive’s
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`incorporation of the Indiana patents into Phase II. Moreover, Warsaw does not manufacture
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`products practicing the Indiana patents in Indiana and two of the Indiana patents were developed
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`in California by the same sole inventor. Furthermore, the alleged infringement occurred
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`predominantly in California at NuVasive’s principal place of business. Therefore, California has
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`a stronger nexus to the alleged infringement of the Indiana patents, which warrant less deference
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`to Plaintiff’s choice of forum.
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`2.
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`Situs of material events
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`“The material events of a patent infringement case do not revolve around a particular
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`situs.” Holley Performance Prods., Inc. v. Barry Grant, Inc., No. 04 C 5758, 2004 WL 3119017
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`(N.D. Ill. Dec. 20, 2004) (quoting Sitrick v. FreeHand Sys., Inc., No. 02 C 1568, 2003 WL
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`1581741 at *3 (N.D. Ill. Mar. 27, 2003)). But as already discussed the location of the alleged
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`infringer's principal place of business in patent infringement cases is often the critical and
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`controlling consideration. In this case, any infringing conduct by NuVasive occurred in
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`California where it manufactured the accused products and employed surgeons to test, train, and
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`Case 3:12-cv-02738-CAB-MDD Document 32 Filed 11/08/12 Page 9 of 11
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`evaluate its products. Moreover, two of the Indiana patents were invented in California while
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`none were invented in Indiana. Warsaw did suffer its damages in Indiana, but none of the other
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`Plaintiffs did. While some material events occurred in Indiana, material events of greater
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`significance occurred in California making it the primary situs of material events. Therefore,
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`this factor tilts in favor of transfer.
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`3.
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`Relative ease of access to sources of proof
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`“In patent infringement cases, the bulk of the relevant evidence usually comes from the
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`accused infringer. Consequently, the place where the defendant's documents are kept weighs in
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`favor of transfer to that location.” In re Genentech, Inc., 566 F.3d 1338, 1345 (Fed. Cir. 2009)
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`(quoting Neil Bros. Ltd. v. World Wide Lines, Inc., 425 F. Supp. 2d 325, 330 (E.D.N.Y. 2006)
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`(quotation marks omitted)). In this case, the bulk of relevant documents are located in California
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`where the alleged infringement occurred. Yet much of the necessary documentation was
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`exchanged electronically in the California case leading to the reasonable inference that
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`documentation required in the Indiana case will be similarly easy to access from the same
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`distance. Therefore, the ease of access factor does not clearly favor venue in either district.
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`4.
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`Convenience of the parties
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`This factor involves the consideration of the parties’ respective residences and their
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`abilities to bear the expense of trial in a particular forum. Coll. Craft Cos., Ltd. v. Perry, 889 F.
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`Supp. 1052, 1056 (N.D. Ill. 1995). Courts should avoid transfer when it merely shifts
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`inconvenience from one party to another without sufficient cause. Research Automation, 626
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`F.3d at 979. Plaintiffs, Warsaw, Medtronic U.S.A., and Medtronic Puerto Rico, and NuVasive
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`have already demonstrated their ability to engage effectively in patent infringement litigation in
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`Southern California and other locations across the nation, which weighs against transfer.
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`Although of little consequence in the convenience analysis, Plaintiffs are all located closer to
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`Indiana than California. Arguably, however, this convenience is at least partially offset by the
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`lack of local counsel for any party in Indiana. Any inconvenience to the parties is nominal and
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`thus favors neither venue, which weighs against transfer.
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`5.
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`Convenience of the witnesses
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`The convenience of witnesses is often considered the most important factor in the
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`convenience analysis, and courts consider everything from the number of witnesses to their
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`willingness to appear. Omnisource Corp. v. Sims Bros., Inc., No. 1:08-CV-89, 2008 WL
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`2756345, at *6 (N.D. Ind. July 14, 2008). Yet “[c]ourts typically presume that witnesses who
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`are parties’ employees and paid experts will appear voluntarily and therefore are less concerned
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`about the burden that appearing at trial might impose on them.” Abbott Labs. v. Church &
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`Dwight, Inc., No. 07 C 3428, 2007 WL 3120007, at *4 (N.D. Ill. Oct. 23, 2007). In this case, the
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`parties appear to assume that similar witnesses will be needed to litigate the Indiana patents as
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`were used in Phase I of the California case. If that is true, party employees from California,
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`Tennessee, and Minnesota—not Indiana—can be expected to testify in the Indiana case. Yet
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`their convenience is less significant in the transfer analysis. More critically, the parties have
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`identified third-party witnesses whose testimony will be necessary to litigation of the Indiana
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`case. Specifically, NuVasive intends to rely on the testimony of the California inventor of two
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`of the Indiana patents and three non-party surgeons, among unnamed others, as non-expert fact
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`witnesses in the Indiana case just as it did in the Phase I litigation. Plaintiffs only identify the
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`Massachusetts inventor of one of the Indiana patents, who was not involved in the California
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`case, as a third-party witness. Given the greater number of identified third-party witnesses from
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`California than any other locale, the convenience of the witnesses favors transfer.
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` III. CONCLUSION
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`Venue is proper in both the Northern District of Indiana and the Southern District of
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`California. Plaintiffs chose the Indiana court and that choice should receive substantial
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`deference. However, in this case, NuVasive has shown a stronger nexus between the material
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`events in this case and the Southern District of California. The California court is already
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`familiar with the parties and related issues due to the ongoing litigation of a similar patent
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`infringement action in its court. Any alleged infringement occurred predominantly in California.
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`And more anticipated non-party witnesses are located in California than any other state, with
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`none from Indiana. Therefore, for the convenience of the parties and witnesses, and in the
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`interest of justice, the Defendants’ motion is GRANTED. [Doc. No. 22]. The Court ORDERS
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`that this case be TRANSFERRED to the Southern District of California pursuant to 28 U.S.C. §
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`1404(a).
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`SO ORDERED
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`Dated this 8th day of November, 2012.
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`S/Christopher A. Nuechterlein
`Christopher A. Nuechterlein
`United States Magistrate Judge
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`11