POLYGUARD PRODUCTS, INC. v. INNOVATIVE REFRIGERATION SYSTEMS, INC.

Filing 31

MEMORANDUM OPINION; An appropriate Order follows. Signed by Judge Nora Barry Fischer on 1/12/18. (jg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
POLYGUARD PRODUCTS, INC.,

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Plaintiff,
v.
INNOVATIVE REFRIGERATION
SYSTEMS, INC.,
Defendant.

Civil Action No. 17-1230
Judge Nora Barry Fischer

MEMORANDUM OPINION
This matter is before the Court on Defendant Innovative Refrigeration Systems, Inc.’s
(“IRS”) Motion to Stay or Alternatively, to Dismiss, (Docket No. [26]), its Memorandum in Support,
(Docket No. [29]) and Plaintiff Polyguard Products, Inc.’s Partial Consent to Defendant’s Motion to
Stay and Request for Amended Schedule, (Docket No. [30]). IRS alternatively seeks all of the
following: (1) a stay of this action in favor of a related declaratory judgment suit brought by the
manufacturer of the alleged infringing product against Plaintiff in the U.S. District Court for the
Northern District of Texas, Dallas Division, see I.S.E.L., LLC v. Polyguard Products, Inc., Civ. No.
3:17-cv-03218-M; (2) dismissal on the basis of improper venue, or alternatively, transfer of venue to
the U.S. District Court for the Western District of Virginia, where it is headquartered, or the U.S.
District Court for the Eastern District of Pennsylvania, where the only operations it conducts in
Pennsylvania are located; or, (3) dismissal for failure to state a claim. (Docket No. 27). In response,
Plaintiff partially consents to the stay of the claims in its Complaint in favor of the litigation in the
Northern District of Texas if Defendant agrees to certain stipulations but also “requests” additional
time to respond to the remaining motions due to its preference to investigate and attempt to settle a

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potential claim it may bring against Defendant related to a “New Product” that it started selling after
it received Plaintiff’s Complaint and is supplied by a different manufacturer. (Docket No. 30).
Plaintiff suggests that this process will take up to forty-four (44) days. (Id.). After careful
consideration of the parties’ arguments and for the following reasons, Defendant’s motion is granted
to the extent that this Court will exercise its broad discretion pursuant to 28 U.S.C. § 1404(a) and
transfer this matter to the U.S. District Court for the Western District of Virginia, forthwith.
At the outset, shortly after receiving and reviewing Defendant’s Motion, this Court ordered
Plaintiff to respond by January 10, 2018. (Docket No. 28). The Court proceeded in this fashion
because it is directed “to secure the just, speedy, and inexpensive determination of every action and
proceeding,” FED. R. CIV. P. 1, and believed upon a review of the case that the stay and transfer
issues were ripe for an expeditious ruling. In particular, the caselaw supporting the requested stay is
well settled. See In re Nintendo of America, Inc., 756 F.3d 1363, 1365 (Fed. Cir. 2014). Further, the
affidavit of Defendant’s Vice President John Stoklosa sets forth that it maintains no operations in
this District, is headquartered in Lyndhurst, Virginia, and is no longer selling the alleged infringing
product which is the subject of this suit, or using the challenged promotional brochure, (see Docket
No. 29-2). Defendant’s motion also contained a statement certifying that counsel had met and
conferred with Plaintiff’s counsel in a good faith effort to resolve these issues but that they were
unable to agree to a resolution. (Docket No. 26 at 2).
As noted, Plaintiff filed a brief response which did not substantively address any of the issues
raised by Defendant’s Motion and includes a number of “requests” for extensions of time which do
not conform to this Court’s Practices and Procedures. (See Docket No. 30). To this end, § III.A.4 of
same provides, in pertinent part, that:
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The Court is not inclined to grant extensions for the filing of motions
or briefs. Any request for an extension must take the form of a written
motion (accompanied by a proposed order), and the motion must
demonstrate good cause and include a statement regarding opposing
counsel’s position on an extension.
Practices and Procedures of Judge Nora Barry Fischer, § III.A.4, available at:
http://www.pawd.uscourts.gov/sites/pawd/files/PandPJudgeNoraBarryFischer.pdf (eff. 9/19/17).
Here, Plaintiff neither filed a written motion, nor included a statement regarding the position of
opposing counsel on the requested extensions. (See Docket No. 30). Instead, Plaintiff states that it
partially consents to a stay in favor of the declaratory judgment action against it in the Northern
District of Texas but “requests” seven days to finalize a stipulation with Defendant. (Docket No.
30). Plaintiff further “requests” an additional thirty (30) days to negotiate a settlement of a potential
claim against Defendant from its sales of a “New Product” supplied by a different manufacturer, all
of which have occurred after the filing of this lawsuit and about which Plaintiff has no other
information, aside from Stoklosa’s declaration of January 3, 2018. (Id.). If those negotiations fail,
Plaintiff “requests” another seven (7) days to file its Responses to Defendants’ motions to transfer
and dismiss. (Id.). Plaintiff then supplies the Court with a convoluted proposed Order incorporating
all of its various requests. (Docket No. 30-1). All told, Plaintiff essentially seeks a six-week
extension of time to respond to the pending defense motions so that its counsel can conduct a Rule
11 investigation into whether it can assert claims against Defendant based on the recent sale and
promotion of the “New Product,” which are not pled in the present Complaint and before the Court.
See e.g., Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1329 (Fed. Cir. 2011) (citations omitted)
(in a patent case, “[a] reasonable presuit investigation [ … ] requires counsel to perform an objective

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evaluation of the claim terms when reading those terms on the accused device.”); Q-Pharma, Inc. v.
Andrew Jergens Co., 360 F.3d 1295, 1300–01 (Fed. Cir. 2004) (“we have interpreted Rule 11 to
require, at a minimum, that an attorney interpret the asserted patent claims and compare the accused
device with those claims before filing a claim alleging infringement.”).
It is this Court’s opinion that Plaintiff has failed to demonstrate “good cause” for the
requested extension, particularly as to the transfer of venue motion which it should have had no
difficulty responding to by January 10, 2018, as this Court had directed.

See Practices &

Procedures at § III.A.4. In this regard, prior to filing its Complaint, counsel had a duty to conduct a
pre-suit investigation and by filing same on September 21, 2017, represented that its factual
contentions as to the propriety of venue including that Defendant sold products and services in this
District and hired and maintained employees in Aliquippa, (see Docket No. 1 at ¶ 3), “have
evidentiary support or, if specifically so identified, will likely have evidentiary support after a
reasonable opportunity for further investigation or discovery.” See FED. R. CIV. P. 11(b)(3). If
Plaintiff had conducted such a pre-suit investigation,1 as it was bound to do, Plaintiff should have
been easily able to respond to Stoklosa’s assertions in his declaration that Defendant neither conducts
any operations nor has any employees in this District but it failed to do so as this Court ordered.
Further, the investigation that its counsel desires to conduct now has no connection to the venue
dispute as it relates to a potential new claim against Defendant from its sales and promotion of a
New Product, all of which occurred after this suit was filed. Hence, Plaintiff’s briefing does not
establish good cause for its otherwise procedurally deficient request for an extension and the Court
sees no reason to further delay the inevitable transfer of this case.

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Plaintiff also had an additional three months since the filing of the Complaint in September of 2017 to continue

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With that background, the Court exercises its discretion to first address the meritorious
motion to transfer pursuant to the discretionary transfer statute, 28 U.S.C. § 1404(a), and to leave to
the transferee court the remaining disputes as to the stay.2 See In re: Homwmedica Osteonics Corp.,
867 F.3d 390, 404, n.8 (3d Cir. 2017) (court has discretion to address convenience factors prior to
deciding contested issues of jurisdiction and venue). Section 1404(a) provides that “[f]or 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 or to any district or division
to which all parties have consented.” 28 U.S.C. § 1404(a). It is well established that this Court
retains “broad discretion” to transfer venue when justice so requires after weighing the private and
public factors set forth in Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir. 1995). See also
Ogundoju v. Attorney General of U.S., 390 F. App’x. 134, 137 n.2 (3d Cir. 2010); in re Nintendo,
756 F.3d at 1365-66. The relevant private interests include: (1) each party’s forum preference; (2)
where the claims arose; (3) the convenience of the parties; (4) the convenience of the witnesses; and
(5) the location of the books and records. Jumara, 55 F.3d at 879. The cited public interests include:
(1) the enforceability of the judgment; (2) practical considerations of expediting trial and reducing
costs; (3) administrative difficulties in the two fora due to court congestion; (4) the local interest in
deciding local controversies; (5) public policies of the fora; and (6) the familiarity of the trial judge
with the applicable state law. Id.

its investigation.
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The Court notes that Plaintiff alleges that “[v]enue is proper in this District under 28 U.S.C. § 1391(b)(1)
because Innovative resides in this District.” (Docket No. 1 at ¶ 6). Defendant contends that venue is improper under the
general venue statute as it does not reside here as that term is defined under 28 U.S.C. §1391(b)(1). (Docket No. 29 at
12-14). Although this is a patent case, the parties do not address the implication of the patent venue statute, 28 U.S.C. §
1400(b), or the recent decisions interpreting same, including the Supreme Court’s opinion in TC Heartland LLC v. Kraft
Foods Group Brands LLC, 137 S. Ct. 1514, 1517, 197 L. Ed. 2d 816 (2017) and the Federal Circuit’s opinion of In re:
Cray, Inc., 871 F.3d 1355 (Fed. Cir. 2017). Given the lack of briefing on these issues, the Court declines to resolve the

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In this Court’s estimation, the relevant private and public factors strongly favor a transfer of
this action to the U.S. District Court for the Western District of Virginia. To this end, Plaintiff’s
forum preference is given little weight as it has no apparent connection to this District since it is
incorporated in Oklahoma and headquartered in Texas. (Docket No. 1 at ¶ 2). While Defendant is
incorporated in Pennsylvania, it has refuted the unsupported assertion that it maintains operations or
employees in this District; rather, its headquarters is located Lyndhurst, Virginia, which is in the
Western District of Virginia, and performs only limited work by a small number of employees in the
Eastern District of Pennsylvania. (Docket No. 1 at ¶ 3; 29-2). The parties have not presented any
evidence demonstrating that witnesses are located here, or that anything more than tangential
infringing acts by Defendant, if any, took place in this District. (See Docket No. 1; 29). In this
regard, the parties agree that the manufacturer of the alleged infringing product is based in
Jacksonville, Florida. (Docket Nos. 29, 30). They are also close to stipulating to stay this action in
favor of the declaratory judgment action involving that party in the Northern District of Texas. (Id.).
Although the location of books and records is typically neutral, in patent actions, courts have
considered that most of the evidence comes from the infringer, making it more convenient to litigate
in the Virginia forum. See In re Genentech, Inc., 566 F.3d 1338, 1345 (Fed. Cir. 2009) (quotation
omitted) (“In patent infringement cases, the bulk of the relevant evidence usually comes from the
accused infringer. Consequently, the place where the defendant's documents are kept weighs in favor
of transfer to that location.”).
Similarly, Defendant’s presence in the Western District of Virginia and absence of operations
here tilts several of the public factors in favor of transfer, including the local interest in the

alleged improper venue and transfers this matter under the discretionary transfer statute, 28 U.S.C. § 1404(a).

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controversy, and the many practical considerations which will reduce the costs of litigation if it takes
place in Virginia, rather than here. (See Docket No. 29). With respect to court congestion, this
Court is presently operating with six judicial vacancies (out of ten seats), three of which have been
empty for more than four years, while the Western District of Virginia has a single vacancy as a seat
was vacated in December of 2017. See Administrative Office of U.S. Courts, Current Judicial
Vacancies, available at: http://www.uscourts.gov/judges-judgeships/judicial-vacancies/currentjudicial-vacancies (last visited 1/12/2018). The remaining factors appear neutral, but the Court
believes that a discretionary transfer is in the interests of justice here.
An appropriate Order follows.

s/Nora Barry Fischer
Nora Barry Fischer
United States District Judge
Dated: January 12, 2018
cc/ecf: counsel of record

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