Case 1:05-cv-01584-REB-MEH Document 32 Filed 12/22/05 USDC Colorado Page 1 of 16
`Case 1:O5—cv—O1584—REB—MEH Document 32 Filed 12/22/05 USDC Colorado Page 1 of 16
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`UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF COLORADO
`
`Civil Action No. 1:05-cv-01584-REB-OES
`
`CQGT, LLC, a Colorado limited liability company;
`CQG, INC., a Colorado corporation,
`
`Plaintiffs,
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC., a Delaware corporation,
`
`Defendant.
`
`DEFENDANT TRADING TECHNOLOGIES’ RENEWED RULE 12 MOTION TO
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`DISMISS, STAY, OR TRANSFER PURSUANT TO 28 U.S.C. § 1404
`
`I.
`
`INTRODUCTION
`
`In response to Plaintiffs CQGT, LLC and CQG, lnc.’s, (“CQG") amended
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`complaint, Defendant Trading Technologies International, Inc. (“TT") now renews its
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`motion for dismissal of CQG’s declaratory judgment (“DJ”) action.‘ CQG’s amended
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`complaint does not change the fact that this case should be heard in Illinois. As set
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`forth in TT’s accompanying motion to dismiss claims ll-V, and to strike CQG’s amended
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`complaint, CQG’s knee-jerk antitrust claims are an all too common tactic used to evade
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`the enforcement of legitimate patent rights.
`
`Even if CQG’s amended claims remain in this case, it becomes even clearer that
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`this case should be heard in Illinois. CQG’s new claims are compulsory counterclaims
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`that should have been brought in the Illinois patent case. CQG’s allegations focus on
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`I TT’s original motion to dismiss or transfer CQG’s DJ action (hereinafter “TT Motion”) has been
`fully briefed as of October 12, 2005 and is awaiting this Court’s ruling.
`(Ex. 1.)
`
`CQG EXHIBIT 1005
`
`0001
`
`0001
`
`CQG EXHIBIT 1005
`
`
`
`

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`‘IT'S use of its patents in |||inois—-where ‘IT is based, develops its inventions, and
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`manages the defense of its intellectual property. Any alleged anticompetitive effects are
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`predominantly felt in Illinois, the site of the major electronic futures exchanges, as well
`
`as the futures traders who use the parties’ products. Moreover, in two related TT cases
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`pending in Illinois, the same patent antitrust claims CQG now raises have been raised
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`and the Illinois court is already addressing TT’s motion to dismiss these claims.
`
`CQG's failure to raise these compulsory counterclaims in Illinois reveals its true
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`motive: distinguishing the Colorado case from the Illinois case and evading transfer to
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`Illinois. As compulsory counterclaims in Illinois, however, these claims should be
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`dismissed, stayed, or transferred to the United States District Court for the Northern
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`District of Illinois (“I|Iinois Court") under 28 U.S.C. § 1404, where a parallel action
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`between ‘IT and CQG is already undenivay. The Illinois Court reviewed a Motion to
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`Dismiss filed by CQG, and ruled against CQG, finding that the Illinois Court had proper
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`jurisdiction. Thus, at a minimum, CQG’s DJ action should be stayed pending resolution
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`of the Illinois case, which is almost certain to resolve this case as we|l.2
`
`ll.
`
`BACKGROUND
`
`This case is duplicative of the TT v. CQG case already underway in the Northern
`
`District of Illinois.
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`In Illinois, CQG moved to transfer the case to this Colorado Court.
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`CQG's motion was denied.
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`In fact, Judge Moran ruled that CQG's DJ action was
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`improper, finding CQG's “race to the courthouse [was] in contravention of the purposes
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`of the declaratory judgment act" and the convenience to the parties and judicial
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`2 Under Fed. R. Civ. P. 12, this motion and TT’s companion motion to strike certain allegations
`and to dismiss Counts ll-V inclusive are filed in lieu of an answer to CQG's amended complaint.
`
`0002
`
`0002
`
`

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`efficiency dictated that the case proceed in Illinois:
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`. we accept jurisdiction and believe that the Colorado court should
`.
`.
`transfer the related case to Illinois for consolidation with this case.
`
`Trading Technologies Intl. v. CQG, No. 05 C 4811, 2005 U.S. Dist. LEXIS 26514, at
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`*12-13 (N.D. Ill. October 31, 2005) (Ex. 2).
`
`In the wake of the Illinois Court’s decision
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`that this dispute should be heard in Illinois, CQG recently filed an amended complaint in
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`this Colorado case with patent-based antitrust claims.
`
`In addition to the TT v. CQG case, seven other cases involving the same TT
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`patents are also pending in the Illinois Court. Three of these related TT cases were
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`initially assigned to Judge James B. Moran, while the remaining four cases were
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`recently reassigned to Judge Moran for resolution of common issues. Order of the
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`Executive Committee (Ex. 3); see Trading Technologies Intl. v. CQG, No. 05 C 4811,
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`2005 U.S. Dist. LEXIS 30893 (N.D. Ill. December 1, 2005) (Ex. 4). Two of these Illinois
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`cases (Rosenthal Collins Group, LLC v. TT, 05—cv—04088, and TT v. Refco Group Ltd.,
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`05—cv—01079) already include the very same antitrust and patent misuse claims based
`
`on TT’s enforcement of its patent rights now also alleged by CQG.
`
`III.
`
`ARGUMENT
`
`A.
`
`CQG’s Patent-Based Antitrust Claims Are Compulsory
`Counterclaims That Must Be Heard In Illinois
`
`CQG’s patent-based antitrust claims are baseless, and nothing more than a
`
`transparent attempt to distinguish this case from the Illinois case and avoid transfer. As
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`compulsory counterclaims allegedly based on TT’s enforcement of its patent rights,
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`CQG’s new claims should have been brought in the parties’ Illinois patent case.
`
`0003
`
`0003
`
`

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`Critical-Vac Filtration Corp. v. Minuteman lnt'l., lnc., 233 F.3d 697,703 (2d Cir. 2000)
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`(barring antitrust claims directed to misuse of an allegedly invalid patent because the
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`claims were compulsory to a patent infringement action in Illinois); USM Corp. v. SP8
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`Tech., lnc., 102 F.R.D. 167, (N.D. Ill. 1984) (finding antitrust claims to be compulsory
`
`counterclaims and barred when based on the same allegations of invalidity as raised in
`
`the earlier patent infringement suit). CQG has only filed its declaratoryjudgment
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`claim (Count I here) as a counterclaim in the Illinois action, but has not filed its other
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`claims from the Colorado action in Illinois.
`
`CQG’s failure to bring its other claims in Illinois is no accident and reveals its true
`
`motives.
`
`It does not seek to adjudicate these claims; rather CQG only seeks to use
`
`these claims to distinguish this case from the Illinois case. Because CQG failed to file
`
`its compulsory counterclaims in Illinois, the two cases are no longer identical mirror
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`images, as CQG recently emphasized to this Court.
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`CQG’s tactics cannot be condoned. This case should be dismissed or
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`transferred in favor of the Illinois case, where the parties’ patent case is already
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`underway. Transfer under § 1404 is not limited to cases that are identical. Courts
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`regularly transfer cases that are merely similar. Monsanto Technology LLC v. Syngenta
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`Crop Protection, lnc., 212 F.Supp.2d 1101 (E.D. Mo. 2002) (“The two cases do not have
`
`to be identical but must have issues that substantially overlap.”); AT&T v. MCI Comm.
`
`Corp., 736 F.Supp 1294 (D.N.J. 1990). Moreover, "[a] court acting under § 1404(a) may
`
`not transfer part of a case for one purpose while maintaining jurisdiction for another
`
`0004
`
`0004
`
`

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`purpose; the section 'contemplates a plenary transfer’ of the entire case." Chrysler
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`Credit Corp. v. Country Chrysler, /nc., 928 F.2d 1509, 1518 (10th Cir. 1991).
`
`Even if CQG’s amended claims are part of this case, this still cannot change that
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`the evidence in this case is centered in Chicago, where the major trading exchanges
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`and the parties’ customers are located.
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`If fact, CQG’s claims make it clearer that the
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`dispute between the parties should be heard in Illinois. See infra Section llI.D.1. The
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`witnesses and evidence necessary to CQG’s alleged misuse and antitrust counts that
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`relate to TT’s use of its patents are in Illinois. See TT Motion at 4-8 (Ex. 1). TT is
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`headquartered in Illinois and invented, filed, and obtained its patents from its offices in
`
`Illinois. TT also manages the defense of its intellectual property from Illinois and any
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`alleged anticompetitive effects would be felt by the major trading futures exchanges and
`
`futures traders who are located there.
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`Illinois is thus the appropriate forum to hear
`
`CQG’s amended claims.
`
`Even CQG’s attempt to raise Colorado state law claims does not weigh in favor
`
`of hearing this case in Colorado, as CQG’s claims are still compulsory in the Illinois
`
`action. Further, the application of state law is nothing new to a federal court. Federal
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`courts routinely apply state laws, including applying the law of the state where the court
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`sits, applying the law of other states, and deciding issues of preemption when a conflict
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`between state and federal law arises.
`
`B.
`
`As The Illinois Court Found, CQG Cannot Establish Declaratory
`Judgment Jurisdiction For CQG’s Colorado Action
`
`Likewise, CQG’s amended complaint does not remedy the lack ofjurisdiction for
`
`this DJ action. TT’s pending motion to dismiss this DJ action sets forth the facts
`
`0005
`
`0005
`
`

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`showing the lack of DJ jurisdiction in this case. TT Motion at 3-7 (Ex. 1).
`
`Notably, the Illinois Court examined the very same facts in CQG’s motion to
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`transfer the Illinois case and ruled that CQG’s DJ action should be heard in Illinois. The
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`Illinois Court found that CQG was “engaging in tactical strategies similar to the
`
`maneuvering the Declaratory Judgment Act was designed to end.” Trading
`
`Technologies lntl. v. CQG, 2005 U.S. Dist. LEXIS 26514, at *12-13 (Ex. 2). For
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`example, CQG wrongly “requested an extension oftime for negotiation, then
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`simultaneously terminated negotiations prior to that date and filed a declaratory
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`judgment action.” Id. Although recognizing the priority usually given to first filed suits,
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`the Court held that CQG should not be given priority because TT was negotiating with
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`CQG to avoid litigation when CQG short—circuited the parties’ agreed upon negotiation
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`schedule to race to the courthouse.
`
`Id. (finding CQG’s DJ filing “to be a race to the
`
`courthouse in contravention of the purposes of the Declaratory Judgment Act.").
`
`C.
`
`Even If Declaratory Judgment Jurisdiction Were To Exist, This Court
`Should Decline Exercise of Jurisdiction
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`Moreover, even if DJ jurisdiction were to exist, courts have the discretion to
`
`decline such jurisdiction. See Serco Services Co., L.P. v. Keiiey C0,, Inc., 51 F.3d 1037,
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`1039 (Fed. Cir. 1995).
`
`Indeed, the Federal Circuit3 rejects the anticipatory use of a DJ
`
`action to cut short attempts at out—of—court dispute resolution. Id. at 1040; EMC Corp. v.
`
`Norand Corp., 89 F.3d 807, 814 (Fed. Cir. 1996). Patent DJ jurisdiction exists only if
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`there is “(1) an explicit threat or other action by the patentee, which creates a
`
`3 The law of the Court of Appeals for the Federal Circuit governs whether DJ jurisdiction exists
`or whether a DJ has been preemptively filed in a patent case. See Serco Services C0,, L.P. v.
`Kelley C0,, Inc., 51 F.3d 1037, 1038 (Fed. Cir. 1995).
`
`0006
`
`0006
`
`

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`reasonable apprehension on the part of the DJ plaintiff that it will face an infringement
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`suit, and (2) present activity which could constitute infringement or concrete steps taken
`
`with the intent to conduct such activity.” Phillips Plastics Corp. v. Kato Hatsujou
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`Kabushiki Kaisha, 57 F.3d 1051, 1052 (Fed. Cir. 1995).
`
`Conducting license negotiations does not give rise to DJ jurisdiction underthis
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`standard. Phillips, 57 F.3d at 1053 (“The offer of a patent license does not create an
`
`actual controversy"). This is true even where the patentee alleges that the accused
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`infringer‘s products '‘fall within" or are “covered by” the patent at issue. Shell Oil Co. v.
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`Amoco Corp., 970 F.2d 885, 888-89 (Fed. Cir. 1992). Such statements “can hardly be
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`considered an express charge of infringement," and are insufficient to create a
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`reasonable apprehension of suit. Id. at 888.
`
`Here, CQG has resorted to a particularly disfavored tactic that is, nevertheless,
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`often attempted by DJ plaintiffs: waiting until a negotiation period has almost ended
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`before filing suit. Like so many other DJ plaintiffs, however, CQG dashed to the
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`courthouse before the starting gun was even fired. TT, on the other hand, was
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`attempting in good faith to resolve its issues without intervention of the courts. TT did
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`not file suit in part because of TT’s belief that settlement negotiations were underway
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`and litigation could be avoided. CQG’s tactic cannot be permitted because it takes the
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`patentee’s good faith offer to enter a period of negotiation, and turns it back in its face.
`
`CQG’s race to the courthouse is nothing but forum shopping and its claims
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`should be dismissed. See, e.g., EMC, 89 F.3d at 814; Serco Services Co., L.P. v. Kelley
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`Co., /nC., CA 3:93-CV-1885-R, 1994 U.S. Dist. LEXIS 19348, *7 (N.D. Tex. May 20,
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`0007
`
`0007
`
`

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`1994) (dismissing DJ action filed one day before end of negotiation period) (Ex. 5).
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`Because a potential infringer “cannot stretch the Federal Declaratory Judgments Act to
`
`give him a paramount right to choose the forum for trying out questions of infringement
`
`and validity,” this tactic is routinely rejected. /d.; Trading Technologies /nt/. v. CQG,
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`2005 U.S. Dist. LEXIS 26514 (Ex. 2); see also Venture Corp. v. J.L. Healy Construction
`
`Co., No. 88-1351-T, 1988 U.S. Dist. LEXIS 13670, Copy L. Rep. (CCH) P26,325 (D.
`
`Kan. Nov. 22, 1988) (dismissing DJ action filed one day before end of negotiation
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`period) (Ex. 6); Curtis Machine Co., Inc. v. Paul E. Robey & Assoc., No. 88-1626-
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`K,1989 U.S. Dist. LEXIS 1466 (D. Kan. Jan. 30, 1989) (dismissing action filed on last
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`day of negotiation period) (Ex. 7); PAJ, Inc. v. Yurman Design, /nc., No. 3:98—CV-2847-
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`P,1999 U.S. Dist. LEXIS 1424, Copy. L. Rep. (CCH) P27,881 (N.D. Tex. 1999)
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`(dismissing action filed one day before end of negotiation period) (Ex. 8). Similarly, just
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`as a potential infringer cannot preemptively file a DJ action during negotiations, he
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`likewise cannot unilaterally terminate negotiations to file a DJ action held in his back
`
`pocket. See Mission Insurance Co. v. Puritan Fashions Corp., 706 F.2d 599, 602 (5th
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`Cir. 1983) (dismissing DJ action filed the day accused infringer rejected negotiations).
`
`These tactics contravene the purpose of the Declaratory Judgment Act and should be
`
`prevented by courts through the decline of the exercise of their discretionary jurisdiction.
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`Further, no “special circumstances" are required for a court to decline jurisdiction.
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`EMC, 89 F.3d at 814. Rather, a district court should “examine whether hearing the
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`declaratory judgment action would serve the objectives for which the Declaratory
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`Judgment Act was created." Id.
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`In particular, the objectives are not served—and an
`
`0008
`
`0008
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`

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`action appropriately dismissed——when the action was brought in the midst of
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`negotiations. See id. (dismissing DJ action filed during negotiations).4
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`As Judge Moran has also requested, this Court should use its discretion under
`
`the Declaratory Judgment Act to decline jurisdiction and dismiss CQG’s preemptive
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`complaint. Any other result would turn the Declaratory Judgment Act on its head, and
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`discourage patentees from attempting to resolve disputes in good faith without
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`intervention of the courts. Id.
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`D.
`
`In the Alternative, This Case Should Be Transferred to the Northern
`District of Illinois or Stayed Pending the Outcome of the Illinois Case
`
`Under 28 U.S.C. § 1404(a), a district court has discretion to grant a change of
`
`venue. Bailey v. Union Pac. R.R., 364 F. Supp. 2d 1227, 1229 (D. Col. 2005). To
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`prevail on a motion to transfer, the balance of equities must tip in favor of a transfer.
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`Cargill Inc. v. Prudential Ins. Co. ofAm., 920 F. Supp. 144, 147 (D. Col. 1996).
`
`Significantly, after reviewing these facts and weighing the venue factors, Judge
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`Moran has already held that “the balance of conveniences weighs in favor of
`
`consolidating the suits in Illinois, not Colorado.” Trading Technologies lntl. v. CQG,
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`4 Since the Federal Circuit‘s rulings in EMC and Serco, numerous district courts have agreed
`that the Declaratory Judgment Act should not be used to cut short extra-judicial negotiations.
`Indeed, what patentee would refrain from filing suit at the very onset of negotiations, if he could
`otherwise be haled into court in the jurisdiction of the infringer’s choice? See Trading
`Technologies lntl. v. CQG, 2005 U.S. Dist. LEXIS 26514 at *12-13 (Ex. 2); Hunt Mfg. Co. v.
`Fiskars OYAB, No. 97-2460, 1997 U.S. Dist. LEXIS 15457, at *10, (E.D. Pa. Sept. 30, 1997)
`(dismissing DJ action that “cut short the possibility of extra-judicial settlement”) (Ex. 9); National
`Foam, Inc. v. Williams Fire & Hazard Control, lnc., No. 97-3105, 1997 U.S. Dist. LEXIS 16734,
`at *25 (E.D. Pa. Oct. 29 1997) (dismissing DJ action where doing otherwise “would discourage
`similar efforts at informal resolutions”) (Ex. 10). McJunkin Corp. v. Cardinal Sys., lnc., 190 F.
`Supp. 2d 874, 879 (S.D. W. Va. 2002) (transferring action that was filed in midst of settlement
`negotiations); 909 Corp. v. Village of Bolingbrook Police Pension Fund, 741 F. Supp. 1290,
`1292-93 (S.D. Tex. 1990) (dismissing action filed during attempts to reach out—of—court
`settlement).
`
`0009
`
`0009
`
`

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`2005 U.S. Dist. LEXIS 26514, at *1O (Ex. 2). Thus, if this Court chooses not to dismiss
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`this action, transfer is absolutely appropriate.
`
`1.
`
`The Material Facts Are Centered Around Illinois
`
`CQG maintains an office in Chicago at 311 S. Wacker Drive, just a half mile from
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`the Chicago Courthouse. (Ex. 1, at 5). TT has its principal place of business in Chicago
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`at 222 S. Riverside Plaza, two blocks from CQG. Id.
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`In its Chicago office, where the
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`patented products are developed, TT employs over 300 people, including 160 software
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`developers. in contrast, TT maintains no office and has no employees in Colorado. TT’s
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`office nearest to Colorado is, in fact, its Chicago office. Id. at 6.
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`The parties’ joint presence in Chicago, rather than Colorado, is not coincidental;
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`the infringing products are electronic tools for futures trading and Chicago is the capital
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`of futures trading in the United States. The Chicago Mercantile Exchange and the
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`Chicago Board of Trade — two of the world's largest electronic futures exchanges — are
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`located in Chicago. In fact, Chicago is the largest outlet for TT’s software and CQG
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`generates much of its revenue from Chicago as well.
`
`As a result, CQG’s Chicago offices are the source of substantial documentary
`
`and testimonial evidence on the operation of CQG’s potentially infringing products. CQG
`
`conducts a weekly class there entitled “The Functionality of CQG,” which CQG claims
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`covers “the functionality of the CQG software,” including “new enhancements, such as
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`electronic order routing,” which are “demonstrated and discussed." Id.
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`Moreover, as the many cases currently pending in the Northern District of Illinois
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`have already made clear, the dispute between CQG and TT will require discovery and
`
`10
`
`00010
`
`00010
`
`

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`testimony from a number of third—party witnesses — the vast majority of whom are
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`located in the Chicago area and outside the subpoena power of a Colorado court. For
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`example, because Chicago is the futures trading hub, most of TT's and CQG‘s
`
`customers are there.
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`In addition, Gary Allan Kemp ll, an inventor of the patents-in-suit,
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`is a third—party witness outside of TT's control residing in the Chicago area. Id.
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`Furthermore, a large number of third—party declarants from the Chicago area
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`have already attested to the novelty, non-obviousness, and validity of TT’s patents. Id.
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`These declarants are not under TT's control. Id. The testimony of these declarants,
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`along with discovery from third—party users of the technology, may be necessary when
`
`judging the evidence that bolsters the patents’ validity, commercial success, industry
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`recognition and adoption, copying of the patented inventions, as well as establishing a
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`reasonable royalty rate for use of the patents and viability of non-infringing alternatives.
`
`In the related TT v. espeed case involving the patents in suit, eSpeed has issued
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`subpoenas for many third party Chicago—area witnesses, including Tradelink LLC,
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`Russell Warner, Charles McElveen, Kingstree Trading, Chris Hehmeyer, Tom Grisafi,
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`BMT Trading LLC, Capital Markets Consulting, Townsend Analytics, Ltd., and
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`FuturePath Trading LLC, to name a few. Id. at 7.
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`In Rosenthal Collins v. TT, another
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`case involving the patents in suit, discovery has only just begun; however, Chris
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`Hehmeyer and Charles McElveen as well as their respective companies, Goldenberg
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`Hehmeyer and Co. and Kingstree Trading, have already been subpoenaed for their
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`deposition testimony and documents. Id. Other Chicago area third parties with relevant
`
`information regarding the novelty, non-obviousness, and validity of the patents in suit
`
`11
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`00011
`
`00011
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`

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`include the Chicago—based companies Rosenthal Collins Group, Peregrine Financial
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`Group, Goldenberg Hehmeyer, and Kingstree Trading—parties in other TT infringement
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`actions. Every one of these Chicago area witnesses is outside of TT’s control and is
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`likely beyond the jurisdiction of the Colorado court.
`
`2.
`
`All Seven Related TT Patent Infringement Actions Are
`Currently Pending in the Northern District of Illinois
`
`In the Illinois TT v. CQG case, both CQG and TT have already exchanged
`
`discovery requests and initial disclosures. Seven other cases involving the same TT
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`patents are also underway in Illinois and eleven cases have already been resolved with
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`consent judgments finding infringement and validity of the TT patents.5
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`In denying CQG’s motion to dismiss ortransfer to Colorado from Illinois, Judge
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`Moran “agree[d] that there is an efficiency benefit of maintaining all of the cases in the
`
`same district." Trading Technologies lntl. v. CQG, 2005 U.S. Dist. LEXIS 26514 at *14
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`(Ex. 2).
`
`In fact, the Executive Committee of the Northern District of Illinois has recently
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`reassigned all of TT’s related patent infringement actions involving the same two
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`patents at issue here to Judge Moran for oversight of the common issues.6 (Ex. 3).
`
`It is
`
`expected that the oversight will realize the efficiencies of “dealing with common issues[,]
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`coordinat[ing] discovery where possible[,] ruling on common issues to some extent[,]
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`5 The eleven settled TT cases finding infringement and validity of the TT patents in suit are: TT
`v. Goldenberg Hehmeyer & Co., O4-cv-06278; TT v. Kingstree Trading LLC, O4-cv-06740; TT v.
`Patsystems PLC, O5-cv-02984; TT v. Ninja Trader LLC, O5-cv-3953; TT v. RTS Realtime
`Systems, Inc, O5-cv-04332; TT v. Rolfe & Nolan, O5-cv—4354; TT v. Strategy Runner, Ltd., 05-
`cv-O4357; TT v. FFastfill PLC et al., O5—cv—O4449, TT v. Transmarket Group, O5—cv—5161; TT v.
`Man Financial, lnc., O5—cv—2164; and TT v. ORC Software Inc. et al., O5-cv—6265.
`6 The seven cases include: TT v. Future Path Trading, O5-cv-05164; TT v. CQG, O5-cv-04811;
`TT v. Peregrine Financial & TradeMaven, O5-cv-04137; TT v. GL Trade, O5-cv-04120;
`Rosenthal Collins Group, LLC v. TT, O5—cv—O4088; TT v. Refco Group Ltd., O5-cv-01079; and TT
`v. eSpeed, lnc., 04-cv-05312. TT v. Man Financial lnc., O5-cv 2164 recently settled.
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`and permit[ting] attorneys in the other cases to participate in the [eSpeed] Markman
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`hearing, if they wish.” Trading Technologies lntl. v. CQG, 2005 U.S. Dist. LEXIS 30893
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`(Judge Moran’s request for consolidation) (Ex. 4). A joint hearing for all of the parties
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`from each TT case is scheduled for December 28, 2005 to determine how to most
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`efficiently approach the common issues.
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`3.
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`The Illinois Court Has Found That Illinois is The Better Venue
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`To Resolve This Dispute
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`In the Illinois case, Judge Moran weighed each side's arguments and concluded
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`that lllinois was the better venue for this action after considering the transfer factors.
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`0 Plaintiff’s Choice of Forum: CQG is not entitled to its forum because its “tactical
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`strategies” were done "in contravention of the purposes of the Declaratory Judgment
`Act. .
`. .[I']he facts of this case suggest rejection of the first—filed presumption."
`Trading Technologies lntl. v. CQG, 2005 U.S. Dist. LEXIS 26514 at *12-13.
`
`o Convenience of the parties: Because of the location of offices and documents,
`“although it would be more convenient for [CQG] to litigate this case in Colorado, it
`would be less inconvenient for them to litigate in Chicago than it would be to force
`[TT] to litigate in Colorado where they have no office, no client base, and generate
`no revenue.” Id.
`
`0 Necessity of Consolidation: “When pending litigation involves the same parties
`and similar legal, technical and infringement issues, transferto that venue is logical
`and strongly favored.” Id. 7
`
`o Related Infringement Actions: “We agree that there is an efficiency benefit of
`maintaining all the cases in the same court." Id.
`
`In addition, among the reasons for transfer is the availability of third—party
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`witnesses that do not fall underthe jurisdiction of this Court but who are located in
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`Chicago as discussed above in Section |||.C.1. Here, one of the inventors of the two
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`patents and twenty-four third party declarants who can testify to the uniqueness and
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`7 Quoting Berol Corp. v. B/C Corp., 2002 WL 1466829 at *5 (N.D. Ill. 2002).
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`validity of TT’s inventions and patents are not TT employees and not under TT’s control,
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`but are Chicago as discussed previously. Likewise, other potential third—party witnesses
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`include employees from a number of Chicago-based companies that design and/or use
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`competing products. Id. The common thread of these likely witnesses is that each one
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`is outside of the control of the parties and the subpoena power of this Court.
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`Colorado district courts have noted the importance of witnesses being subject to
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`the subpoena power of the Court. Sackett v. Denver and Rio Grand Western RR. C0,,
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`603 F. Supp. 260, 261 (D. Col. 1985) (“[A]ny unwilling Utah witness would not be
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`subject to subpoena by this court.”). Furthermore, preservation depositions are
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`inadequate substitutes for the testimony of a live witness. Cargill lnc., 920 F. Supp. at
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`147 (“[T]he use of depositions in lieu of live testimony is inappropriate where, as here,
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`plaintiff has requested trial by jury."); see also In re Air Crash Disaster at Stapleton /nt’/
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`Airport, Denver, Col. on Nov. 15, 1987, 720 F. Supp. 1493, 1501 (D. Col. 1989)
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`(“Deposition testimony is an imperfect substitute for personal testimony").
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`Moreover, the pendency of a related action between the same parties in the
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`transferee district is yet another pertinent consideration. Ervin 8. Assocs. v. Cisneros,
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`939 F. Supp. 793, 799 (D. Col. 1996) (citing “the fact that a very similar action is already
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`pending in the District of Columbia encompassing the claims for relief in this suit” as the
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`primary reason for granting defendants motion to transfer; also citing “the parties,
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`witnesses and records” being principally located in the transferee district). Here, there
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`is a parallel case in Illinois. This factor has been paramount in granting motions to
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`dismiss anticipatory DJ actions. See, e.g., Koch Engineering Co. v. Monsanto Co., 621
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`F. Supp. 1204, 1207-08 (E.D. Mo. 1985) (denying motion to transfer in light of the
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`granting motion to dismiss); Solna Web Incorporate v. Printed Media Services, lnc., No.
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`90—0433—CV—W—6, 1990 U.S. Dist. LEXIS 11554, *7—8 (E.D. Mo. Aug. 31, 1990) (Ex. 11).
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`Finally, Courts often consider calendar congestion in transfer decisions. See
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`Chrysler Credit Corp. v. Country Chrysler, lnc., 928 F.2d 1509, 1516 (10th Cir. 1991).
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`Judge Moran is a senior judge who has presided over dozens of patent cases and
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`specifically requested that all of TT’s pending patent cases be reassigned to his docket.
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`Transfer to Illinois will ease the burdens on the parties and the judicial system and allow
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`for a fair presentation of the case. At a minimum, the case should be stayed pending
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`the outcome of the Illinois case, which would resolve all issues in this case.
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`IV.
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`CONCLUSION
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`For the foregoing reasons, this Court should dismiss the action in favor of the
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`parties’ litigation in the Northern District of Illinois. Alternatively, TT requests that this
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`action be stayed, ortransferred to the Northern District of Illinois.
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`Dated this 22”’ Day of December, 2005.
`
`Leif R. Sigmond Jr.
`George I. Lee
`McDonnell Boehnen Hulbert
`& Berghoff LLP
`300 South Wacker Drive
`Chicago, Illinois 60606
`Tel: (312) 913-0001
`Fax: (312) 913-0002
`
`Respectfully submitted,
`
`/s/ Peter A. Gergely
`Peter A. Gergely
`MERCHANT & GOULD P.C.
`1050 17th Street, Suite 1950
`Denver, Colorado 80265
`Tel: (303) 357-1670
`Fax: (303) 357-1671
`Attorneys for DefendantlCounterclaimant,
`TRADING TECHNOLOGIES
`INTERNATIONAL, INC.
`
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`CERTIFICATE OF SERVICE
`
`I hereby certify that on December 22, 2005, I electronically filed the
`foregoing with the Clerk of Court using the CMIECF system, which will send
`notification of such filing to the following email addresses:
`
`Mark W. Fischer
`
`Faegre & Benson LLP
`1900 15th Street
`
`Boulder, CO 80302
`E—mail: mfischer@Faegre.com
`
`/s/ Laurie Busby
`
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