Seiko Epson Corporation et al v. Abacus 24-7 LLC et al, No. 3:2009cv00477 - Document 111 (D. Or. 2009)
Court Description: OPINION AND ORDER -The Court DENIES in its entirety the Motion 61 to Sever and Transfer Venue filed by Defendants Green Project, Inc., and Joseph Wu. Signed on 12/15/2009 by Judge Anna J. Brown. (See formal Opinion and Order, 8-pages) (ecp)
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON SEIKO EPSON CORPORATION, a Japan corporation; EPSON AMERICA, INC., a California corporation; and EPSON PORTLAND, INC., an Oregon corporation, Plaintiffs, v. ABACUS 24-7 LLC, an Arizona limited liability company; EFORCITY CORPORATION, dba EFORCITY.COM, a California corporation, R& L IMAGING GROUP, INC., formerly known as IEM CONSUMABLES, INC., a California corporation; XP SOLUTIONS, LLC, dba CLICKINKS.COM, a Florida limited liability company; CLICKINKS.COM, LLC, a Florida limited liability company; GLOBAL BUSINESS SUPPORT SYSTEMS, INC., dba PRINTCOUNTRY.COM, a Delaware corporation; GREEN PROJECT, INC., a California corporation; and JOSEPH WU, an individual, Defendants. 1 - OPINION AND ORDER 09-CV-477-BR OPINION AND ORDER DAVID W. AXELROD CONNIE C. KONG Schwabe, Williamson & Wyatt, P.C. 1211 S.W. Fifth Ave, Suite 1500-2000 Portland, OR 97204 (503) 222-9981 HAROLD A. BARZA TIGRAN GULEJEAN Quinn Emanuel Urquhart Oliver & Hedges, LLP 865 South Figueroa Street, 10th Floor Los Angeles, CA 90017-2543 (213) 624-7707 Attorneys for Plaintiffs Seiko Epson Corporation; Epson America, Inc.; and Epson Portland, Inc. SCOTT D. EADS Perkins Coie, LLP 1120 N.W. Couch St., 10th Floor Portland, OR 97209 (503) 727-2192 KAUSTUV M. DAS RAMSEY M AL-SALAM Perkins Coie, LLP 1201 Third Ave., Suite 4800 Seattle, WA 98101 (206) 358-8217 Attorneys for Defendant Abacus 24-7 LLC ANTHONY EDWARD McNAMER DEBORAH E. GUMM McNamer and Company, PC 920 S.W. Third Ave., Suite 200 Portland, OR 97204 (503) 727-2503 AMY B. LAWRENCE Lawrence & Associates 2550 N. Hollywood Way, Suite 202 Burbank, CA 91505 (818) 843-6442 Attorneys for Defendants eForCity Corp. and R&L Imaging Group, Inc. 2 - OPINION AND ORDER TIMOTHY S. DEJONG Stoll Stoll Berne Lokting & Sclachter, PC 209 S.W. Oak St., Fifth Floor Portland, OR 97204 (503) 227-1600 Attorney for Defendants Clickinks.Com, LLC and XP Solutions Properties, LLC TIMOTHY S. DEJONG EDWARD O CONNOR STEPHEN M. LOBBIN The Eclipse Group, LLP 1920 Main St., Suite 150 Irvine, CA 92614 (949) 851-5000 Attorneys for Global Business Support Systems, Inc. BRENNA KRISTINE LEGAARD Chernoff Vilhauer McClung & Stenzel, LLP 601 S.W. Second Ave., Suite 1600 Portland, OR 97204 (503) 227-5631 DARIUS G. ADLI RAYMOND K. CHAN THOMAS T. CHAN YUN LOUISE LU Chan Law Group LLP 1055 W. 7th St., #1880 Los Angeles, CA 90017 Attorneys for Defendants Green Project, Inc. and Joseph Wu BROWN, Judge. This matter comes before the Court on the Motion (#61) to Sever and Transfer Venue filed by Defendants Green Project, Inc., and Joseph Wu. For the following reasons, the Court DENIES the Motion in its entirety. 3 - OPINION AND ORDER STANDARDS 1. Motion to Sever. Under Federal Rule of Civil Procedure 21, the court has broad discretion whether to sever a claim. Rice v. Sunrise Express, Inc., 209 F.3d 1008, 1016 (7th Cir. 2000). [W]here certain claims in an action are properly severed under Fed. R. Civ. P. 21, two separate actions result [and the] district court may transfer one action while retaining jurisdiction over the other. Chrysler Cred. Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1519 (10th Cir. 1991)(citing Wyndham Assoc. v. Bintliff, 398 F.2d 614, 618 (2d Cir. 1968)). 2. Motion to Transfer. For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought. 28 U.S.C. § 1404(a). Relevant factors for the Court to consider include (1) the state that is most familiar with the governing law, (2) the plaintiff's choice of forum, (3) the respective parties' contacts with the forum, (4) the contacts relating to the plaintiff's cause of action in the chosen forum, (5) the differences in the costs of litigation in the two forums, and (6) the availability of compulsory process to compel attendance of unwilling nonparty witnesses. Jones v. GNC Franchising, Inc., 211 F.3d 495 498-99 (9th Cir. 2000). 4 - OPINION AND ORDER DISCUSSION1 Plaintiffs (collectively referred to as Seiko Epson) assert a single claim under 35 U.S.C. § 271 in which they allege Defendants Green Project, Inc., and Joseph Wu (collectively referred to as Green Project) and others have infringed multiple patents for ink-jet printer cartridges issued to Plaintiffs. Green Project moves to sever Seiko Epson s § 271 claim and its own Counterclaims from the remainder of this case and transfer the § 271 Claim and Counterclaims to the United States District Court for the Central District of California, Western Division, where Green Project s principal place of business is located. Green Project contends severance is appropriate because it is the only party in this case that exclusively sells recycled ink-jet cartridges. Accordingly, it has a defense to Plaintiffs patent-infringement claims based on patent exhaustion that none of the other Defendants share and that may cause confusion in the minds of the jury and thereby prejudice Green Project. In addition, Green Project asserts transfer of the severed Claim to California is appropriate because Green Project has few 1 Plaintiffs have filed seven other cases in this District that involve similar patent-infringement claims: Seiko Epson Corp. v. Print-Rite Holdings Ltd, 01-CV-500-BR; Seiko Epson Corp. v. Multi-Union Trading Co., Ltd., 01-CV-550-BR; Seiko Epson Corp. v. Armor S.A., 05-567; Seiko Epson Corp. v. Glory South Software Mfg, Inc., 06-CV-236-BR and 06-CV-477-BR; Seiko Epson Corp. v. E-Babylon, Inc., 07-CV-896-BR; and Seiko Epson Corp. v. Inkjetmadness.com, Inc., 08-CV-452-BR. 5 - OPINION AND ORDER contacts with the District of Oregon and its witnesses are all located in California, which makes it inconvenient to defend this action in Oregon. Finally, Green Project contends its Counterclaims for Declaratory Relief, Misappropriation of Trade Secrets, Trespass, and Unfair Competition based on alleged misconduct by SeikoEpson s investigator are unique to Green Project. Seiko Epson, on the other hand, disputes that its patent claims against Green Project and Green Project s defense of patent exhaustion to those Claims are wholly unique and distinct from the claims and defenses involving other defendants either in this case or in the numerous related cases pending before this Court. Seiko Epson also offers evidence of a connection between Green Project s principal, Defendant Wu, and other defendants in this case relating to the sale and distribution of allegedly infringing ink cartridges world-wide. In addition, Seiko Epson offers evidence that other defendants in this case and in the related cases have sold some of the recycled cartridges (remans) produced by Green Project as well as remans produced by others. Moreover, some of the defendants in both this case and the related cases have asserted a patent-exhaustion defense to Seiko Epson s infringement claims that is substantially the same as the patent-exhaustion defense asserted by Green Project. 6 - OPINION AND ORDER For example, Defendant Global Business Support Systems, Inc., dba Print Country.com, alleges patent exhaustion/first sale doctrine in support of its First Affirmative Defense: 1. As to any products accused of infringement which were first sold by Plaintiffs or others prior to refilling, reconstruction, refurbishing, importing, marketing, or selling by Defendant, any claims of infringement are barred by the first sale doctrine.2 (Emphasis added.) See Answer, Affirmative Defense, and Counterclaim at 4. On this record, the Court concludes Defendants Green Project, Inc., and Joseph Wu have failed to establish good reason for this Court to exercise its discretion to sever the claims against them in order to facilitate the transfer to another district of a wholly separate action that, in actuality, involves closely related and complex patent claims and defenses that have been and continue to be litigated in multiple cases in this district for nine years. This Court s long-standing familiarity with each of the related cases militates against a transfer, particularly in light of the commonality of many of the issues including the issues relating to the alleged sale of Seiko Epson s recycled ink cartridges. 2 Moreover, the Court does not Patent exhaustion is commonly referred to by the term first sale doctrine. See, e.g., ExcelStor Technology, Inc. v. Papst Licensing GMBH & Co., KG, 541 F.3d 1373, 1374 (Fed. Cir. 2008). 7 - OPINION AND ORDER foresee any likelihood of confusion or prejudice to Defendants Green Project or Wu regarding their separate Counterclaims alleging misconduct by Plaintiffs investigator that would be sufficient to justify transfer of the case to another district. CONCLUSION For these reasons, the Court DENIES in its entirety the Motion (#61) to Sever and Transfer Venue filed by Defendants Green Project, Inc., and Joseph Wu. IT IS SO ORDERED. DATED this 15th day of December, 2009. /s/ Anna J. Brown ANNA J. BROWN United States District Judge 8 - OPINION AND ORDER IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON SEIKO EPSON CORPORATION, a Japan corporation; EPSON AMERICA, INC., a California corporation; and EPSON PORTLAND, INC., an Oregon corporation, Plaintiffs, v. ABACUS 24-7 LLC, an Arizona limited liability company; EFORCITY CORPORATION, dba EFORCITY.COM, a California corporation, R& L IMAGING GROUP, INC., formerly known as IEM CONSUMABLES, INC., a California corporation; XP SOLUTIONS, LLC, dba CLICKINKS.COM, a Florida limited liability company; CLICKINKS.COM, LLC, a Florida limited liability company; GLOBAL BUSINESS SUPPORT SYSTEMS, INC., dba PRINTCOUNTRY.COM, a Delaware corporation; GREEN PROJECT, INC., a California corporation; and JOSEPH WU, an individual, Defendants. 1 - OPINION AND ORDER 09-CV-477-BR OPINION AND ORDER DAVID W. AXELROD CONNIE C. KONG Schwabe, Williamson & Wyatt, P.C. 1211 S.W. Fifth Ave, Suite 1500-2000 Portland, OR 97204 (503) 222-9981 HAROLD A. BARZA TIGRAN GULEJEAN Quinn Emanuel Urquhart Oliver & Hedges, LLP 865 South Figueroa Street, 10th Floor Los Angeles, CA 90017-2543 (213) 624-7707 Attorneys for Plaintiffs Seiko Epson Corporation; Epson America, Inc.; and Epson Portland, Inc. SCOTT D. EADS Perkins Coie, LLP 1120 N.W. Couch St., 10th Floor Portland, OR 97209 (503) 727-2192 KAUSTUV M. DAS RAMSEY M AL-SALAM Perkins Coie, LLP 1201 Third Ave., Suite 4800 Seattle, WA 98101 (206) 358-8217 Attorneys for Defendant Abacus 24-7 LLC ANTHONY EDWARD McNAMER DEBORAH E. GUMM McNamer and Company, PC 920 S.W. Third Ave., Suite 200 Portland, OR 97204 (503) 727-2503 AMY B. LAWRENCE Lawrence & Associates 2550 N. Hollywood Way, Suite 202 Burbank, CA 91505 (818) 843-6442 Attorneys for Defendants eForCity Corp. and R&L Imaging Group, Inc. 2 - OPINION AND ORDER TIMOTHY S. DEJONG Stoll Stoll Berne Lokting & Sclachter, PC 209 S.W. Oak St., Fifth Floor Portland, OR 97204 (503) 227-1600 Attorney for Defendants Clickinks.Com, LLC and XP Solutions Properties, LLC TIMOTHY S. DEJONG EDWARD O CONNOR STEPHEN M. LOBBIN The Eclipse Group, LLP 1920 Main St., Suite 150 Irvine, CA 92614 (949) 851-5000 Attorneys for Global Business Support Systems, Inc. BRENNA KRISTINE LEGAARD Chernoff Vilhauer McClung & Stenzel, LLP 601 S.W. Second Ave., Suite 1600 Portland, OR 97204 (503) 227-5631 DARIUS G. ADLI RAYMOND K. CHAN THOMAS T. CHAN YUN LOUISE LU Chan Law Group LLP 1055 W. 7th St., #1880 Los Angeles, CA 90017 Attorneys for Defendants Green Project, Inc. and Joseph Wu BROWN, Judge. This matter comes before the Court on the Motion (#61) to Sever and Transfer Venue filed by Defendants Green Project, Inc., and Joseph Wu. For the following reasons, the Court DENIES the Motion in its entirety. 3 - OPINION AND ORDER STANDARDS 1. Motion to Sever. Under Federal Rule of Civil Procedure 21, the court has broad discretion whether to sever a claim. Rice v. Sunrise Express, Inc., 209 F.3d 1008, 1016 (7th Cir. 2000). [W]here certain claims in an action are properly severed under Fed. R. Civ. P. 21, two separate actions result [and the] district court may transfer one action while retaining jurisdiction over the other. Chrysler Cred. Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1519 (10th Cir. 1991)(citing Wyndham Assoc. v. Bintliff, 398 F.2d 614, 618 (2d Cir. 1968)). 2. Motion to Transfer. For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought. 28 U.S.C. § 1404(a). Relevant factors for the Court to consider include (1) the state that is most familiar with the governing law, (2) the plaintiff's choice of forum, (3) the respective parties' contacts with the forum, (4) the contacts relating to the plaintiff's cause of action in the chosen forum, (5) the differences in the costs of litigation in the two forums, and (6) the availability of compulsory process to compel attendance of unwilling nonparty witnesses. Jones v. GNC Franchising, Inc., 211 F.3d 495 498-99 (9th Cir. 2000). 4 - OPINION AND ORDER DISCUSSION1 Plaintiffs (collectively referred to as Seiko Epson) assert a single claim under 35 U.S.C. § 271 in which they allege Defendants Green Project, Inc., and Joseph Wu (collectively referred to as Green Project) and others have infringed multiple patents for ink-jet printer cartridges issued to Plaintiffs. Green Project moves to sever Seiko Epson s § 271 claim and its own Counterclaims from the remainder of this case and transfer the § 271 Claim and Counterclaims to the United States District Court for the Central District of California, Western Division, where Green Project s principal place of business is located. Green Project contends severance is appropriate because it is the only party in this case that exclusively sells recycled ink-jet cartridges. Accordingly, it has a defense to Plaintiffs patent-infringement claims based on patent exhaustion that none of the other Defendants share and that may cause confusion in the minds of the jury and thereby prejudice Green Project. In addition, Green Project asserts transfer of the severed Claim to California is appropriate because Green Project has few 1 Plaintiffs have filed seven other cases in this District that involve similar patent-infringement claims: Seiko Epson Corp. v. Print-Rite Holdings Ltd, 01-CV-500-BR; Seiko Epson Corp. v. Multi-Union Trading Co., Ltd., 01-CV-550-BR; Seiko Epson Corp. v. Armor S.A., 05-567; Seiko Epson Corp. v. Glory South Software Mfg, Inc., 06-CV-236-BR and 06-CV-477-BR; Seiko Epson Corp. v. E-Babylon, Inc., 07-CV-896-BR; and Seiko Epson Corp. v. Inkjetmadness.com, Inc., 08-CV-452-BR. 5 - OPINION AND ORDER contacts with the District of Oregon and its witnesses are all located in California, which makes it inconvenient to defend this action in Oregon. Finally, Green Project contends its Counterclaims for Declaratory Relief, Misappropriation of Trade Secrets, Trespass, and Unfair Competition based on alleged misconduct by SeikoEpson s investigator are unique to Green Project. Seiko Epson, on the other hand, disputes that its patent claims against Green Project and Green Project s defense of patent exhaustion to those Claims are wholly unique and distinct from the claims and defenses involving other defendants either in this case or in the numerous related cases pending before this Court. Seiko Epson also offers evidence of a connection between Green Project s principal, Defendant Wu, and other defendants in this case relating to the sale and distribution of allegedly infringing ink cartridges world-wide. In addition, Seiko Epson offers evidence that other defendants in this case and in the related cases have sold some of the recycled cartridges (remans) produced by Green Project as well as remans produced by others. Moreover, some of the defendants in both this case and the related cases have asserted a patent-exhaustion defense to Seiko Epson s infringement claims that is substantially the same as the patent-exhaustion defense asserted by Green Project. 6 - OPINION AND ORDER For example, Defendant Global Business Support Systems, Inc., dba Print Country.com, alleges patent exhaustion/first sale doctrine in support of its First Affirmative Defense: 1. As to any products accused of infringement which were first sold by Plaintiffs or others prior to refilling, reconstruction, refurbishing, importing, marketing, or selling by Defendant, any claims of infringement are barred by the first sale doctrine.2 (Emphasis added.) See Answer, Affirmative Defense, and Counterclaim at 4. On this record, the Court concludes Defendants Green Project, Inc., and Joseph Wu have failed to establish good reason for this Court to exercise its discretion to sever the claims against them in order to facilitate the transfer to another district of a wholly separate action that, in actuality, involves closely related and complex patent claims and defenses that have been and continue to be litigated in multiple cases in this district for nine years. This Court s long-standing familiarity with each of the related cases militates against a transfer, particularly in light of the commonality of many of the issues including the issues relating to the alleged sale of Seiko Epson s recycled ink cartridges. 2 Moreover, the Court does not Patent exhaustion is commonly referred to by the term first sale doctrine. See, e.g., ExcelStor Technology, Inc. v. Papst Licensing GMBH & Co., KG, 541 F.3d 1373, 1374 (Fed. Cir. 2008). 7 - OPINION AND ORDER foresee any likelihood of confusion or prejudice to Defendants Green Project or Wu regarding their separate Counterclaims alleging misconduct by Plaintiffs investigator that would be sufficient to justify transfer of the case to another district. CONCLUSION For these reasons, the Court DENIES in its entirety the Motion (#61) to Sever and Transfer Venue filed by Defendants Green Project, Inc., and Joseph Wu. IT IS SO ORDERED. DATED this 15th day of December, 2009. /s/ Anna J. Brown ANNA J. BROWN United States District Judge 8 - OPINION AND ORDER
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