TELEBRANDS CORP. v. SEASONAL SPECIALTIES, LLC

Filing 16

OPINION AND ORDER RE: 11 Motion to Transfer case is granted in part transferring case to the USDC for the District of Minnesota, and denying in part as to motion concerns other alternative relief. Signed by Chief Judge Jose L. Linares on 9/6/17. (sr, )

NOT FOR PUBLICATION

IJNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

CIVIL ACTION NO. 17-3390 (JLL)

TELEBRANDS CORP.,
Plaintiff,

$

OPINION & ORDER

V.

SEASONAL SPECIALTIES, LLC,
Defendant.

LINARES, Chief District Judge

IT APPEARING THAT:

1.

Currently pending before the Court is a motion by the defendant, Seasonal

Specialties, LLC (hereinafter, “Seasonal”), to transfer this patent infringement action to
the United States District Court for the District of Minnesota, among other alternative
relief. See 28 U.S.C.

§

1400(b) (concerning the proper venue for a federal patent

infringement action). (See ECF No. 11 through ECF No. 11-3; ECF No. 15; ECF No. 151.) The plaintiff, Telebrands Corp. (hereinafter, “Telebrands”), opposes Seasonal’s
motion. (See ECF No. 14; ECF No. 14-1.)
2.

The Court resolves Seasonal’s motion upon a review of the papers and

without oral argument. See L. Civ. R. 78.1(b). For the following reasons, the Court

grants the part of the motion seeking a transfer of the action, and orders this action to be
transferred to the District of Minnesota.
3.

Telebrands, which is deemed to reside in New Jersey, owns certain patents

(hereinafter, “the Patents in Issue”) related to a “laser light decorative lighting apparatus,”
and alleges that Seasonal is manufacturing and selling decorative lighting products that
infringe the Patents in Issue. (ECF No. 1.) Telebrands alleges that the District of New
Jersey is a proper venue for this patent infringement action. (Id.)
4.

However, a “civil action for patent infringement may be brought in the

judicial district where the defendant resides, or where the defendant has committed acts
of infringement and has a regular and established place of business.” 28 U.S.C.

§

1400(b). Thus, pursuant to the provisions of Section 1400(b), a patent infringement
action may be brought against an allegedly infringing defendant either: (a) where that
defendant is deemed to reside, e.g., its state of incorporation (hereinafter, “the First
Clause”); or (b) where that defendant has allegedly committed the acts of infringement
and has a regular and established place of business (hereinafter, “the Second Clause”).
See generally TCHeardandLLC v. Kraft foods Gip. Brands LLC, 137 S.Ct. 1514
(2017).
5.

If the Second Clause is being relied upon, then an action is not in the proper

venue unless both of its elements are satisfied, i.e., the defendant allegedly committed
infringing acts within the venue (hereinafter, “the Infringement Element”), and the
defendant has a regular and established place of business within the venue (hereinafter,

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“the Regular and Established Element”). Id.
6.

Telebrands concedes that Seasonal is deemed to reside within the District

of Minnesota, and not within the District of New Jersey, and that the First Clause has no
application here. (See ECF No. 14 at 4 (Telebrands stating that it “does not dispute [the]
contention [by Seasonal] that it is a Minnesota limited liability company”).) Thus, the
Court will not address the reach of the First Clause in its assessment of Seasonal’s motion
to transfer in this action. (See ECF No. 11-1 at 5 (Seasonal arguing that it does not reside
within the District of New Jersey); Id. at 7 (same); Id. at 10—12 (same); ECF No. 15 at 5
(same).)
7.

Furthermore, the parties do not address the merits of the claims by

Telebrands concerning the Infringement Element of the Second Clause at this juncture.
(See generally ECF No. 11; ECF No. 14, ECF No. 15.)
8.

However, the parties do contest the reach of the Regular and Established

Element of the Second Clause. Seasonal argues that it does not have a regular and
established place of business within New Jersey, and that the District of New Jersey is an
improper venue for this action as a result. (See ECF No. 11-1 at 7.) In support, Seasonal
submits the sworn Declaration of its president, who declares that: (a) Seasonal’s primary
offices and headquarters are in Minnesota; (b) he works out of the Minnesota office; (c)
Seasonal is a limited liability company, and none of its members are located in
Minnesota; (d) the majority of Seasonal’s employees work in Minnesota; (e) none of
Seasonal’s employees, representatives, contractors, or facilities are located within New

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Jersey; and (f) Seasonal has not had a regular and established place of business in New
Jersey at any time in the past. (See ECF No. 11-2 at 2; see also ECF No. 1 1-1 at 12—13
(Seasonal reiterating the contents of the Declaration in the brief in support of the motion
to transfer); see also ECF No. 15 at 9—10 (same).)
9.

Furthermore, to demonstrate that it is not being cavalier in making this

motion to transfer and that it desires to have this dispute resolved on the merits, Seasonal
has already brought a separate action against Telebrands in the District of Minnesota,
wherein Seasonal seeks a judgment declaring that it is not infringing the Patents in Issue.
See Seasonal Specialties, LLC e. Telebrands Corp., D. Minn. No. 17-1768.
10.

In response, Telebrands appears to concede that it possesses no evidence to

demonstrate that the Regular and Established Element as to Seasonal is arguably satisfied
in the District of New Jersey, and instead asks for “limited venue-related discovery so
that Telebrands can establish the full extent of Seasonal[’s] business presence in this
District.” (See ECF No. 14 at 4.) Indeed, Telebrands offers nothing more than its own
venue allegations that are set forth in its Complaint in opposition. (See generally ECF
No. 14.)
11.

The Court finds that Seasonal has demonstrated in the first instance, in no

uncertain terms, that it does not have a regular and established place of business within
the District of New Jersey.
12.

In response, Telebrands has not made a showing that the Regular and

Established Element has been arguably met in order to prosecute its infringement claims

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against Seasonal in the District of New Jersey. Instead, Telebrands merely asks for
discovery on the issue.
13.

Such a request in response is insufficient to counter a motion made under

Section 1400(b), and it is without merit. See Simpson Per/brmance Prods., Inc. v.
NecksGen, Inc., No. 16-153, 2017 WL 3616764, at *3 (W.D.N.C. Aug. 23, 2017)
(transferring a patent infringement case to a different venue, because “allegations
supporting the conclusion that Defendant conducts some business in [the original venue]
by selling products in and shipping products to [the original venue]

.

.

.

fall far short of

permitting the inference” that the Regular and Established Element has been met);
Gillespie v. Prestige RoyalLiquors Corp., No. 16-2392, 2017 WL 3232462, at *5 (N.D.
Cal. July 3 1, 2017) (transferring a patent infringement case, because a plaintiffs
allegations concerning a defendant’s acts of shipping products and directing advertising
to the original venue were insufficient to demonstrate the Regular and Established
Element); OptoLuin, Inc. v. Cree, Inc.. No. 16-3828, 2017 WL 3130642, at *6 (D. Ariz.
July 24, 2017) (rejecting the plaintiffs request to conduct venue discovery in opposition
to a Section 1400(b) transfer motion, because the plaintiffs allegations concerning the
defendant’s acts of selling infringing products in stores and having a sales manager in the
original venue were insufficient to raise an issue as to the Regular and Established
Element); Logan Tree LP v. Garinin Int’l, Inc., No. 17-98, 2017 WL 2842870, at *2
(W.D. Tex. June 22, 2017) (granting the defendant relief under Section 1400(b), because
the Regular and Established Element was not met by the plaintiffs allegations that the

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defendant: (a) was authorized to do business in the original venue, (b) had a website that
listed distributors in the original venue, and (c) sold products to distributors in the
original venue).i
14.

Perhaps such discovery might demonstrate that this Court would ordinarily

have personal jurisdiction over Seasonal, but this will do nothing to counter Seasonal’s

unequivocal assertions that venue is improper here under Section 1400(b) due to its lack
of a regular and established place of business within New Jersey. See Proctor & Ganthle
Co. v. Ranir, LLC, No. 17-185, 2017 WL 3537197, at *5 (S.D. Ohio Aug. 17, 2017)
(rejecting a plaintiffs argument in opposition to a Section 1400(b) transfer motion that it
be permitted to conduct limited discovery relating to the extent of a defendant’s
“connections” to the original venue, and finding that such discovery would go to the issue
of personal jurisdiction, and “that is not the law”); Percept Techs. v. Fove, Inc., No. 152837, 2017 WL 3427971, at *1 (D. Nev. Aug. 8. 2017) (rejecting the plaintiffs
arguments against a Section 1400(b) transfer that merely demonstrated that specific
personal jurisdiction existed over the defendant, particularly because the defendant
declared that it had no offices, employees, or land in the original venue).
15.

Therefore, this Court finds that Telebrands has not met its burden of raising

evidence to demonstrate that the venue of this patent infringement action properly lies

i
TC Heartland LLC v. Kraft foods Gip. Brands LLC, 137 S .Ct. 1514 (2017),
cited supra, is the latest pronouncement by the United States Supreme Court concerning
the proper application of the venue provisions contained in Section 1400(b). Thus, this
Opinion only relies upon case law that has been released since its issuance, i.e., May 22,
2017.

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__________

within the District of New Jersey pursuant to Section 1400(b), and grants Seasonal’s
motion to transfer venue. Under Section 1400(b), this action properly belongs in the
District of Minnesota.

For the reasons set forth above, IT IS THEREFORE on this

day of

September, 2017, ORDERED that the defendant’s motion to transfer this action pursuant
to 2$ U.S.C.

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1400(b) to the United States District Court for the District of Minnesota,

among other alternative relief (ECF No. 11), is GRANTED IN PART AND DENIED
IN PART as follows:
GRANTED TO THE EXTENT that the motion concerns the transfer of
this action to the United States District Court for the District of Minnesota; and it is
further
DENIED WITHOUT PREJUDICE TO THE EXTENT that the motion
concerns other alternative relief; and it is further
ORDERED that the Clerk of the Court TRANSFER THIS ACTION to the
United States District Court for the District of Minnesota; and it is further
ORDERED that the Clerk of the Court designate this action, insofar as it exists in
the United States District Court for the District of New Jersey, as CLOSED.

iSE L. LINARES
hief Judge, United States District Court
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