IPS Corporation v. WCM Industries

Filing 27

ORDER denying 7 Motion to Dismiss. Signed by Chief Judge Jon Phipps McCalla on 3/29/2013. (McCalla, Jon)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
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IPS CORPORATION,
Plaintiff,
v.
WCM INDUSTRIES, INC.,
Defendant.

No. 2:12-cv-02694-JPM-tmp

ORDER DENYING DEFENDANT’S MOTION TO DISMISS OR TRANSFER

Before the Court is Defendant’s “Motion to Dismiss for Lack
of Declaratory Judgment Jurisdiction, Improper Venue Pursuant to
FRCP 12(b)(3), or in the Alternative, to Transfer Action to the
District of Colorado,” which was filed on December 28, 2012.
(ECF No. 7.)
2013.

Plaintiff responded in opposition on January 28,

(ECF No. 19.)

11, 2013.

Defendant replied in support on February

(ECF No. 20.)

With leave of the Court (ECF No. 26),

Plaintiff again responded in opposition on March 15, 2013 (ECF
No. 22-1).
On February 25, 2013, the Court held a telephonic hearing
on Defendant’s Motion.

(ECF No. 25.)

attended that hearing telephonically:

The following attorneys
Bruce J. Rose, Scott

Benjamin Pleune, Stephen R. Lareau, and Bruce S. Kramer
representing Plaintiff; and Glen G. Reid, Jr., Ian R. Walsworth,
and Matthew F. Jones representing Defendant.

(Id.)

For the reasons stated below, Defendant’s “Motion to
Dismiss for Lack of Declaratory Judgment Jurisdiction, Improper
Venue Pursuant to FRCP 12(b)(3), or in the Alternative, to
Transfer Action to the District of Colorado” (ECF No. 7) is
DENIED.
I.

BACKGROUND
In this action, Plaintiff IPS Corporation (“IPS” or

“Plaintiff”) requests a declaration that the flange cover, or
press-in trim kit, that it developed in 2012 (the “2012
Product”) does not infringe a patent held by WCM Industries,
Inc. (“WCM” or “Defendant”), U.S. Patent No. 7,503,083 (“WCM’s
Patent” or “Patent ’083”).
“In August 2010, IPS acquired American Brass & Aluminum
Foundry Company [(“American Brass”)] and became involved in
ongoing litigation between WCM and [American Brass] regarding
whether [American Brass’s] ‘Press-In’ trim kits [(the “2010
American Brass Product”)] infringed [WCM’s Patent].”

(Pl.’s

Resp., ECF No. 19, at 2.)
In October 2010, WCM entered into a settlement agreement
(the “Settlement Agreement”) with American Brass.
No. 20-2 at PageID 178.)1

(See ECF

The following provisions are contained

in the Settlement Agreement:

1

The Court will refer to Page Identification (“PageID”) numbers when
referencing documents other than the Complaint (ECF No. 1), Defendant’s
Motion (ECF No. 7), and the parties’ memoranda supporting or opposing

2



a choice-of-law clause stating that “[t]his Settlement
Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado” (id. at PageID
177);



a forum-selection clause stating that “[t]he United States
District Court for the District of Colorado [(the “Colorado
District Court”)] will have exclusive jurisdiction over any
dispute arising from this Settlement Agreement” (id.);



a clause stating that “[American Brass] shall . . . refrain
in the Unites States from making, selling, offering for
sale, using, and/or importing Accused Products” (id. at
PageID 175);



a clause stating that “‘Accused Products’ as used in this
Agreement is understood to mean the [2010 American Brass
Product] and all colorable imitations thereof” (id.);



a clause stating that “[e]ach of the Parties expressly
warrants that they have authority to enter into this
Settlement Agreement and to bind themselves and each of
their respective . . . successors . . . and assigns to the
terms hereof” (id. at PageID 176);

Defendant’s Motion (ECF Nos. 7-1, 19, 20, 22-1). A number of the documents
referenced in this Order, other than the Complaint, Defendant’s Motion, and
the parties’ memoranda, have the same Electronic Case Filing Number, but are
not consecutively paginated, so references to PageID numbers are more
precise.

3



a clause stating that “[a]s part of a full and complete
settlement, the Parties are entering into a Stipulated
Consent Judgment and Permanent Injunction . . . which is
the subject of a separate document which is incorporated
herein by this reference” (id. at PageID 175); and



a clause stating that “[t]his Settlement Agreement, along
with the [Stipulated Consent Judgment and Permanent
Injunction], constitute the entire agreement of the Parties
with regard to the specific subject matter herein” (id. at
PageID 176).
On November 9, 2010, the Colorado District Court entered an

Order on Stipulated Consent Judgment (the “Stipulated Consent
Judgment”) (ECF No. 7-3 at PageID 106-08) that is, in relevant
part, identical to the parties’ Stipulated Consent Judgment and
Permanent Injunction that the parties entered into on October
26, 2010 (see id. at PageID 102-04).

The following provisions

are contained in the Stipulated Consent Judgment:


a statement that “[the Colorado District Court] retains
jurisdiction over this Stipulated Consent Judgment and
Permanent Injunction and any applications with regard to
enforcement thereof” (id. at PageID 106);



a statement that “[the Colorado District Court] permanently
enjoins [American Brass and its successors and assigns]
from directly or indirectly infringing [WCM’s Patent] . . .
4

by making, using, selling, offering for sale, and importing
press in trim kits . . . of the type specifically shown in
Exhibit B of the Complaint [the 2010 American Brass
Product] and colorable imitations thereof” (id. at PageID
107); and


a liquidated damages provision that is triggered if
“[American Brass] violates any term of this Stipulated
Consent Judgment and fails to cure such violation within
thirty (30) days after receipt of written notice of the
violation” and stating that, if the liquidated provision is
triggered, “[American Brass] shall be liable for liquidated
damages in the amount equal to 50% of the gross revenues
collected by [American Brass] for Accused Products sold
during the period of time [American Brass] was in violation
of any material term of this Stipulated Consent Judgment”
and reasonable attorneys’ fees if WCM proves such a
violation in court (see id. at PageID 107-08).
On May 13, 2011, WCM sent a letter to IPS stating that a

flange cover, or press-in trim kit, that IPS developed in 2011
(the “2011 Product”) “is in violation of a Consent Judgment
entered into on October 26, 2010” and “fails to avoid
infringement of [WCM’s Patent].”

(ECF No. 4-1 at PageID 26-27.)

IPS responded by email, stating that IPS would withdraw the 2011
Product from the market:

“IPS has decided in an effort to
5

resolve this matter amicably to withdraw its current product
from the market and will take steps to do so immediately.

IPS

may or may not introduce a product later with further design
modifications.”

(ECF No. 4-2 at PageID 32.)

On May 25, 2012, IPS sent a letter to WCM stating that “IPS
has recently designed another product that it believes does not
infringe [WCM’s Patent] and also does not violate the
[Stipulated Consent Judgment] for the reasons set forth herein,
and it intends to sell and distribute this new product.”

(ECF

No. 4-3 at PageID 34.)
From May 25, 2012, to July 20, 2012, IPS and WCM engaged in
a correspondence regarding whether the 2012 Product infringed on
WCM’s Patent and whether the 2012 Product violates the
Stipulated Consent Judgment.

(See ECF Nos. 4-3 to 4-6 at PageID

34-63.)
On June 19, 2012, WCM sent a letter to IPS, stating that
WCM had made the following determinations:

“We believe that the

[2012 Product] infringes at least claims 1 and 5 of [WCM’s
Patent].

Moreover, the manufacture and sale by IPS of this

product would be in violation of the [Stipulated Consent
Judgment].”

(ECF No. 4-4 at PageID 47.)

In making this

determination, WCM indicated that it had evaluated a sample of
the 2012 Product:

“We appreciate you sending to us the actual

physical embodiment of the [2012 Product].
6

When assembled in

its functional state, it looks like the below image: . . . .”
(Id.)
On July 18, 2012, IPS responded by letter to WCM’s letter
of June 19, 2012.

(See ECF No. 4-5 at PageID 51.)

IPS’s letter

is divided into two main parts with headings reading “IPS’s
[2012 Product] Does Not Infringe [WCM’s Patent]” and “IPS’s
[2012 Product] Does Not Violate the [Stipulated] Consent
Judgment.”

(Id. at PageID 51, 55.)

The letter also states that

“IPS is proceeding to make and sell [the 2012 Product].”

(Id.

at PageID 58.)
On July 20, 2012, WCM responded by letter to IPS’s letter
of July 18, 2012.

(See ECF No. 4-6 at PageID 60.)

WCM’s letter

begins by stating that:
In response to your last letter, you seem to focus on
our previous claim construction directed to IPS’ prior
infringing device, in comparison with our present
construction of the claims as it relates to IPS’
redesigned device. As you can appreciate, because the
two infringing products are different, our analysis is
obviously
directed
to
the
distinctions
of
the
respective features.
(Id.)

WCM further stated that “we conclude that [the 2012

Product] infringes [WCM’s Patent] and its sale would certainly
violate the [Stipulated] Consent Judgment” (id. at PageID 62);
that “[s]ome competitors, such as IPS, have apparently decided
that it is easier to try to copy WCM’s accomplishments and take
the risk that WCM will take legal action to enforce its hard-

7

fought for rights, rather than invest in their own R&D and
patenting efforts” (id); and that:

“WCM intends to and will

aggressively pursue those companies that make and sell any
devices that adopt WCM’s unique patented combinations.

To date,

IPS has failed in its efforts to avoid infringement of WCM’s
Patents” (id. at PageID 63).
On August 9, 2012, IPS filed a Complaint for Declaratory
Relief (the “Complaint”) in this Court.

(See ECF No. 1.)

In

the Complaint, IPS alleges that:
On or about May 25, 2012, counsel for IPS wrote to
counsel for WCM advising WCM that “IPS has recently
redesigned another product that it believes does not
infringe [WCM’s Patent] and also does not violate the
[Stipulated Consent Judgment] . . .” IPS also advised
WCM that “it intends to sell and distribute this new
product.”
(Id. ¶ 13 (third alteration in original).)

IPS further alleges

that “IPS provided WCM’s counsel with a sample of [the 2012
Product], on or about June 19, 2012” (id. ¶ 14), and that:
[In a letter from WCM,] dated July 20, 2012 . . . .
WCM’s counsel continued to assert that [the 2012
Product] infringes [WCM’s Patent].
WCM’s counsel
further suggested that IPS has “decided . . . [to]
take the risk that WCM will take legal action . . .”
Further, WCM’s counsel asserted that “WCM intends to
and will aggressively pursue those companies that make
and sell any devices that adopt WCM’s unique patented
combinations.”
(Id. ¶ 16 (final three alterations in original).)
requests the following relief:

8

IPS then

WHEREFORE, Plaintiff IPS Prays that this Court enter
judgment: (a) Declaring that Plaintiff, and including
specifically [the 2012 Product] made, used, imported,
sold and/or offered for sale by or for Plaintiff or
its related entities, has not infringed and is not
infringing any valid purported patent rights of WCM in
[WCM’s Patent], and otherwise has not violated any
provision
of
the
patent
laws
of
the
United
States; . . . .
(Id. ¶ 24(a).)
“[A]fter an attempt to resolve the case amicably, [IPS]
served the [Complaint on WCM] on December 7, 2012.”

(Pl.’s

Resp., ECF No. 19, at 4; see also Aff. of Service, ECF No. 6.)
On December 28, 2012, WCM filed the Motion presently before this
Court.
II.

(ECF No. 7.)

ANALYSIS
The Court considers, in turn, whether it has subject-matter

jurisdiction over this action pursuant to the Declaratory
Judgment Act, 28 U.S.C. §§ 2201-2202 (2006); whether venue is
appropriate in the Western District of Tennessee; and whether
transfer to the Colorado District Court is appropriate.

9

A.

This Court Has Subject-Matter Jurisdiction Pursuant to the
Declaratory Judgment Act.2
WCM argues that IPS’s “claims do not arise to the level of

a justiciable ‘case or controversy’ because, on a plain reading
of the Complaint, at the time of the Complaint was filed, IPS
could only allege a ‘potential’ infringement by a product not
yet released and a ‘fear’ of damages.”3

(Def.’s Mot., ECF No. 7,

¶ 2.)
The Declaratory Judgment Act states that:
In
a
case
of
actual
controversy
within
its
jurisdiction, . . . any court of the United States,
upon the filing of an appropriate pleading, may
declare the rights and other legal relations of any
interested party seeking such declaration, whether or
not further relief is or could be sought.
28 U.S.C. § 2201 (2006).

“The phrase ‘a case of actual

controversy’ in the Act refers to the types of ‘cases’ and
‘controversies’ that are justiciable under Article III of the
2

The United States Court of Appeals for the Federal Circuit (the “Federal
Circuit”) has exclusive jurisdiction over an appeal from a final order in
this action. See Landmark Screens, LLC v. Morgan, Lewis, & Bockius, LLP, 676
F.3d 1354, 1360 (Fed. Cir. 2012) (explaining that the Federal Circuit has
exclusive jurisdiction over an appeal from a district court that arose under
federal patent laws). The Federal Circuit applies Federal Circuit precedent
when reviewing jurisdiction pursuant to the Declaratory Judgment Act. 3M Co.
v. Avery Dennison Corp., 673 F.3d 1372, 1377 (Fed. Cir. 2012) (“Whether an
actual case or controversy exists so that a district court may entertain an
action for a declaratory judgment of non-infringement and/or invalidity is
governed by Federal Circuit law.” (internal quotation marks omitted)).
3
In its Reply, WCM argues that “IPS has not made any showing of why it should
be excused from [the forum-selection clauses in] the Settlement Agreement or
the [Stipulated] Consent Judgment, and therefore the Court must dismiss or
transfer this case to the agreed upon forum.” (ECF No. 20 at 7.) The forumselection clauses, however, are not relevant to subject-matter jurisdiction.
See Godsey v. Miller, 9 F. App’x 380, 383 (6th Cir. 2001) (per curiam)
(“[T]he issue of a forum selection clause is an independent contractual
concern created by the actions of the parties, and is not linked to the
inherent subject-matter jurisdiction of the court.”), quoted in DaWalt v.
Purdue Pharma, LP, 397 F.3d 392, 399 (6th Cir. 2005).

10

U.S. Constitution.”

Ass’n for Molecular Pathology v. U.S.

Patent & Trademark Office, 689 F.3d 1303, 1317-18 (Fed. Cir.
2012).
“The party seeking to establish declaratory judgment
jurisdiction bears the burden of demonstrating that an Article
III case or controversy exists at the time the claim for
declaratory relief is filed.”

Matthews Int’l Corp. v. Biosafe

Eng’g, LLC, 695 F.3d 1322, 1328 (Fed. Cir. 2012).
[I]n determining whether a justiciable controversy is
present, the analysis must be calibrated to the
particular facts of each case, with the fundamental
inquiry being “whether the facts alleged, under all
the circumstances, show that there is a substantial
controversy, between parties having adverse legal
interests, of sufficient immediacy and reality to
warrant the issuance of a declaratory judgment.”
Id. (quoting MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118,
127 (2007)).
“[T]o establish an injury in fact traceable to the
patentee, a declaratory judgment plaintiff must allege both (1)
an affirmative act by the patentee related to the enforcement of
his patent rights and (2) meaningful preparation to conduct
potentially infringing activity.”

Ass’n for Molecular

Pathology, 689 F.3d at 1318 (citation omitted).

In addition,

“[i]n deciding whether to entertain a declaratory judgment
request, a court must determine whether resolving the case
serves the objectives for which the Declaratory Judgment Act was

11

created.”

Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871, 883

(Fed. Cir. 2008).
Regarding the first element that a plaintiff must allege,
“the bedrock rule [is] that a case or controversy must be based
on a real and immediate injury or threat of future injury that
is caused by the defendants — an objective standard that cannot
be met by a purely subjective or speculative fear of future
harm.”

Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1339

(Fed. Cir. 2008).

“A patentee can cause such an injury in a

variety of ways, for example, by creating a reasonable
apprehension of an infringement suit . . . .”

Id.

As a result,

“where a patentee asserts rights under a patent based on certain
identified ongoing or planned activity of another party, and
where that party contends that it has the right to engage in the
accused activity without license, an Article III case or
controversy will arise.”

Ass’n for Molecular Pathology, 689

F.3d at 1320 (quoting SanDisk Corp. v. STMicroelectronics, Inc.,
480 F.3d 1372, 1381 (Fed. Cir. 2007)) (internal quotation marks
omitted).
Regarding the second element that a plaintiff must allege,
“although a party need not have engaged in the actual
manufacture or sale of a potentially infringing product to
obtain a declaratory judgment of non-infringement, there must be
a showing of ‘meaningful preparation’ for making or using that
12

product.”

Cat Tech LLC, 528 F.3d at 881.

“If a declaratory

judgment plaintiff has not taken significant, concrete steps to
conduct infringing activity, the dispute is neither ‘immediate’
nor ‘real’ and the requirements for justiciability have not been
met.”

Id. at 880.
The immediacy requirement under the second element is

satisfied if “it appears likely that [the party seeking
declaratory judgment] can expeditiously solicit and fill orders
for [the potentially infringing product].”

See id. at 882.

“[T]he reality requirement is often related to the extent to
which the technology in question is ‘substantially fixed’ as
opposed to ‘fluid and indeterminate’ at the time declaratory
relief is sought.”

Id. (quoting Sierra Applied Scis., Inc. v.

Advanced Energy Indus., Inc., 363 F.3d 1361, 1379 (Fed. Cir.
2004)).

The technology is substantially fixed if “it appears

likely that, once the cloud of liability for infringement is
eliminated, the accused products can be produced without
significant design change.”

See id. at 882-83.

Regarding a district court’s duty to determine
“whether resolving the case serves the objectives for which the
Declaratory Judgment Act was created,” see id. at 883, “putting
the challenger to the choice between abandoning his rights or
risking prosecution [] is a dilemma that it was the very purpose
of the Declaratory Judgment Act to ameliorate.”
13

SanDisk Corp.,

480 F.3d at 1378-79 (quoting MedImmune, Inc., 549 U.S. at 129)
(internal quotation marks omitted).

“Article III ‘d[oes] not

require, as a prerequisite to testing the validity of the law in
a suit for injunction, that the plaintiff bet the farm, so to
speak, by taking the violative action.’”

Id. at 1378

(alteration in original) (quoting MedImmune, Inc., 549 U.S. at
129).
The Federal Rules of Civil Procedure “govern the procedure
for obtaining a declaratory judgment under 28 U.S.C. § 2201.”
Fed. R. Civ. P. 57.

Federal Rule of Civil Procedure 12(b)(1)

(“Rule 12(b)(1)”) allows a party to bring a motion to dismiss
for “lack of subject-matter jurisdiction.”

Fed. R. Civ. P.

12(b)(1).
WCM indicates that it intends to make both facial and
factual challenges to the subject-matter jurisdiction of this
Court.

Regarding the facial challenge, the first section

heading in WCM’s Memorandum in Support of its Motion states
that:

“The Allegations in IPS’ Complaint Fail to Establish

Subject Matter Jurisdiction.”

(ECF No. 7-1 at 2.)

Regarding

the factual challenge, WCM states in its argument that:
“‘Where, as here, the challenge is made, not to the sufficiency
of the jurisdictional allegations, but to the underlying facts
supporting those allegations, a trial court may go beyond the
allegations of the complaint . . . .’”
14

(Id. at 3 (purporting to

quote Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)
(interpreting Rule 12(b)(1))).)4
The Court first addresses WCM’s facial and factual
challenges to the subject-matter jurisdiction of this Court and
then determines if exercising jurisdiction serves the objectives
of the Declaratory Judgment Act.
1.

The Complaint Contains Sufficient Factual Matter to
Establish Subject-Matter Jurisdiction.

The Court now will discuss the standard of review for
facial challenges under Rule 12(b)(1), determine whether this
Court has subject-matter jurisdiction based on the allegations
in the Complaint, and address WCM’s arguments.
a.

Standard of Review

Under Rule 12(b)(1), if a “motion simply challenges the
court’s subject matter jurisdiction based on the sufficiency of
the pleading’s allegations — that is, the movant presents a
‘facial’ attack on the pleading — then those allegations are
taken as true and construed in a light most favorable to the
complainant.”

Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573,

1583 (Fed. Cir. 1993) (citing Scheuer v. Rhodes, 416 U.S. 232,
236 (1974)); see also McCormick v. Miami Univ., 693 F.3d 654,
658

(6th

Cir.

2012)

(“Under

a

4

facial

attack,

all

of

the

The actual quote is as follows: “[I]t may be contended that the
jurisdictional allegations of the complaint were not true. A trial court may
then go beyond the allegations of the complaint and in an evidentiary hearing
determine if there are facts to support the jurisdictional allegations.”
Adams, 697 F.2d at 1219.

15

allegations in the complaint must be taken as true . . . .”
(internal quotation marks omitted)); Folden v. United States,
379 F.3d 1344, 1354 (Fed. Cir. 2004) (“In deciding whether there
is subject-matter jurisdiction, the allegations stated in the
complaint are taken as true and jurisdiction is decided on the
face of the pleadings.” (internal quotation marks omitted)).
b.

The Complaint’s Allegations Are Sufficient to
Establish Subject-Matter Jurisdiction.

The Complaint’s allegations establish “both (1) an
affirmative act by the patentee related to the enforcement of
his patent rights, and (2) meaningful preparation to conduct
potentially infringing activity.”

Ass’n for Molecular

Pathology, 689 F.3d at 1318 (citation omitted).
First, WCM has taken affirmative action regarding its
rights in WCM’s Patent.

In paragraph thirteen, the Complaint

alleges that IPS sent a letter to WCM “[o]n or about May 25,
2012,” stating that the 2012 Product does not infringe WCM’s
Patent and that “IPS also advised WCM that ‘it intends to sell
and distribute this new product.’”

(ECF No. 1 ¶ 13.)

In

paragraph sixteen, the Complaint alleges that WCM stated, in a
“letter dated July 20, 2012,” that the 2012 product infringes
WCM’s Patent, that “IPS has ‘decided . . . [to] take the risk
that WCM will take legal action . . . ,’” and that “‘WCM intends
to and will aggressively pursue those companies that make and

16

sell any devices that adopt WCM’s unique patented
combinations.’”

(Id. ¶ 16 (alterations in original).)

The

allegations in the Complaint, therefore, establish that this is
a case “where a patentee asserts rights under a patent based on
certain identified ongoing or planned activity of another party,
and where that party contends that it has the right to engage in
the accused activity without license.”

See Ass’n for Molecular

Pathology, 689 F.3d at 1320 (quoting SanDisk Corp., 480 F.3d at
1381) (internal quotation marks omitted).
Second, the record indicates that IPS made meaningful
preparations to make and sell the 2012 Product.

The Complaint

alleges that IPS both “advised WCM that ‘it intends to sell and
distribute [the 2012 Product]’” (ECF No. 1 ¶ 13) and “provided
WCM’s counsel with a sample of [the 2012 Product], on or about
June 19, 2012” (id. ¶ 14).

The record indicates, therefore,

that the dispute is immediate, because “it appears likely that
[the party seeking declaratory judgment] can expeditiously
solicit and fill orders for [the potentially infringing
product],” and sufficiently real, because “it appears likely
that, once the cloud of liability for infringement is
eliminated, the accused products can be produced without
significant design change.”
c.

Cat Tech LLC, 528 F.3d at 882-83.

WCM’s Arguments to the Contrary Are Not Persuasive.

First, in its Memorandum in Support of its Motion,
17

WCM argues that “IPS . . . fails to allege in its Complaint that
IPS was even preparing to release the [2012 Product].”

(ECF No.

7-1 at 5.)
WCM’s argument is factually incorrect.

Paragraph thirteen

of the Complaint states that, in a letter written “[o]n or about
May 25, 2012,” IPS advised WCM that “‘IPS has recently
redesigned another product’” and that IPS “‘intends to sell and
distribute this new product.’”

(ECF No. 1 ¶ 13.)

IPS’s

statement indicates that IPS was preparing to sell the 2012
Product.

See Cedars-Sinai Med. Ctr., 11 F.3d at 1583 (stating

that, in a facial attack, “allegations are taken as true and
construed in a light most favorable to the complainant”).
Furthermore, in making this argument WCM cites Prasco, LLC
(see ECF No. 7-1 at 5), which is not applicable to WCM’s
argument.

WCM’s argument essentially challenges IPS’s ability

to establish the second element necessary to establish subjectmatter jurisdiction under the Declaratory Judgment Act:

whether

IPS had made “meaningful preparation to conduct potentially
infringing activity.”
F.3d at 1318.

See Ass’n for Molecular Pathology, 689

The analysis in Prasco, LLC, however, did not

address the second element necessary to establish subject-matter
jurisdiction under the Declaratory Judgment Act.

See Prasco,

LLC, 537 F.3d at 1336 n.4 (“[W]hether there has been potentially
infringing activity or meaningful preparation to conduct
18

potentially infringing activity . . . . is not in contention
here . . . .”).
Second, in its Memorandum in Support of its Motion, WCM
argues that the “Complaint also fails to allege any specific
harm to IPS that could serve as a basis for this lawsuit.”
No. 7-1 at 5.)

(ECF

Instead, WCM argues, “IPS has [merely] asserted

‘a cloud over Plaintiff’s business activities.’”
(quoting Compl., ECF No. 1, ¶ 21).)

(Id. at 5

In making this argument,

WCM relies primarily on Prasco, LLC (see id.), where the Federal
Circuit rejected the plaintiff’s contention that “paralyzing
uncertainty” could create subject-matter jurisdiction.

See

Prasco, LLC, 537 F.3d at 1338.
Prasco, LLC, however, addressed circumstances that are
materially different from the case presently before this Court.
In Prasco, LLC, the Federal Circuit did not find jurisdiction
because “all we have before us is Prasco’s allegation that its
product does not infringe the defendants’ patents” and “not only
have the defendants not taken a concrete position adverse to
Prasco’s, but they also have taken no affirmative actions at all
related to Prasco’s current product.”

Prasco, 537 F.3d at 1340.

In contrast, the Complaint in the instant case alleges that WCM
sent two letters stating that the 2012 Product infringes WCM’s
Patent and, in the second letter, indicated that WCM will pursue
legal remedies against parties that infringe WCM’s patents.
19

(See ECF No. 1 ¶¶ 14, 16.)

The Complaint thus indicates that

WCM has taken a concrete position adverse to IPS — namely, that
the 2012 Product infringes WCM’s Patent — and that WCM has taken
the affirmative action of sending a letter to IPS indicating
that it intends to pursue legal action to protect its patent
rights.
Third, at the hearing, WCM argued that the Complaint would
establish subject-matter jurisdiction if the reference to “this
new product” that IPS “intends to sell and distribute” in
paragraph thirteen was a reference to the 2012 Product and not
the 2011 Product.
In the context of the Complaint it is clear that the
reference to “this new product” is a reference to the 2012
Product.

Paragraph eleven refers to the 2011 Product:

“On or

about May 13, 2011, Defendant WCM sent a letter to IPS alleging
that ‘[t]he “new” press trim kit of IPS . . . fails to avoid
infringement of [WCM’s Patent].’”

(ECF No. 1 ¶ 11 (alterations,

except for the final alteration, in original).)

Since the

letter was sent in 2011, the “new” product developed by IPS
refers to the 2011 Product.
Paragraph twelve of the Complaint then makes the following
allegation:
[In response to WCM’s May 13, 2011, letter] IPS also
indicated to WCM that, “in view of the minimal volume
of sales, IPS has decided in an effort to resolve this
20

matter amicably to withdraw its current product from
the market . . .” IPS further stated to WCM that “IPS
may or may not introduce a product later with further
design modifications.”
(Id. ¶ 12.)

Paragraph twelve, therefore, indicates that IPS

withdrew the 2011 Product and might introduce a different
product at a later date.
Paragraph thirteen of the Complaint then alleges that IPS
wrote a letter to WCM “[o]n or about May 25, 2012,” stating that
“‘IPS has recently redesigned another product’” and that IPS
“‘intends to sell and distribute this new product.’” (Id. ¶ 13
(emphasis added).)

Since paragraph twelve indicates that IPS

withdrew the 2011 Product, and paragraph thirteen refers to a
“redesigned” product, the subsequent reference to “this new
product” in paragraph thirteen clearly refers to the 2012
Product.

Based on this finding by the Court, WCM indicated at

the hearing that it would agree that this Court has subjectmatter jurisdiction.
In summary, the Court finds that the Complaint’s
allegations are sufficient to establish subject-matter
jurisdiction under the Declaratory Judgment Act.

WCM’s facial

challenge fails.
2.

The Facts Underlying the Complaint Are Sufficient to
Establish Subject-Matter Jurisdiction.

The Court now will discuss the standard of review for
factual challenges under Rule 12(b)(1), determine whether this
21

Court has subject-matter jurisdiction based on the facts
underlying the Complaint, and address WCM’s arguments.
a.

Standard of Review

“If a Rule 12(b)(1) motion challenges a complaint’s
allegations of jurisdiction, the factual allegations in the
complaint are not controlling and only uncontroverted factual
allegations are accepted as true.”

Shoshone Indian Tribe of

Wind River Reservation, Wyo. v. United States, 672 F.3d 1021,
1030 (Fed. Cir. 2012) (citing Cedars-Sinai Med. Ctr., 11 F.3d at
1583); see also Gentek Bldg. Prods., Inc. v. Sherwin-Williams
Co., 491 F.3d 320, 330 (6th Cir. 2007) (“Where . . . there is a
factual attack on the subject-matter jurisdiction alleged in the
complaint, no presumptive truthfulness applies to the
allegations [in the complaint.]”).
“In resolving these disputed predicate jurisdictional
facts, ‘a court is not restricted to the face of the pleadings,
but may review evidence extrinsic to the pleadings. . . .’”
Shoshone Indian Tribe of Wind River Reservation, Wyo., 672 F.3d
at 1030 (alteration in original) (quoting Cedars-Sinai Med.
Ctr., 11 F.3d at 1584); see also Gentek Bldg. Prods., Inc., 491
F.3d at 330 (“In its review, the district court has wide
discretion to allow affidavits, documents, and even a limited
evidentiary hearing to resolve jurisdictional facts.”).

22

b.

The Record Before the Court Indicates that This Court
Has Subject-Matter Jurisdiction.

The record before the Court establishes “both (1) an
affirmative act by the patentee related to the enforcement of
his patent rights, and (2) meaningful preparation to conduct
potentially infringing activity.”

Ass’n for Molecular

Pathology, 689 F.3d at 1318 (citation omitted).
First, the record indicates that WCM took affirmative
action regarding its patent rights.

IPS stated in its letter of

July 18, 2012, that the 2012 Product does not infringe WCM’s
Patent and that “IPS is proceeding to make and sell [the 2012
Product].”

(ECF No. 4-5 at PageID 51-55, 58.)

WCM responded to

IPS’s letter by a letter dated July 20, 2012, in which WCM
stated that the 2012 Product infringes WCM’s Patent, that
“[s]ome competitors, such as IPS, have apparently decided that
it is easier to try to copy WCM’s accomplishments and take the
risk that WCM will take legal action to enforce its hard-fought
for rights,” and that “WCM intends to and will aggressively
pursue those companies that make and sell any devices that adopt
WCM’s unique patented combinations.”
63.)

(ECF No. 4-6 at PageID 62-

The record, therefore, indicates that this is a case

“where a patentee asserts rights under a patent based on certain
identified ongoing or planned activity of another party, and
where that party contends that it has the right to engage in the

23

accused activity without license.”

See Ass’n for Molecular

Pathology, 689 F.3d at 1320 (quoting SanDisk Corp., 480 F.3d at
1381) (internal quotation marks omitted).
Second, the record indicates that IPS made meaningful
preparations to make and sell the 2012 Product.

The

correspondence indicates that IPS provided a sample of the 2012
Product to WCM (see WCM Letter of June 19, 2012, ECF No. 4-4, at
PageID 47) and that IPS twice stated that it intended to sell
the 2012 Product (see IPS Letter of May 25, 2012, ECF No. 4-3,
at PageID 34; IPS Letter of July 18, 2012, ECF No. 4-5, at
PageID 58).

The record indicates, therefore, that the dispute

is immediate, because “it appears likely that [the party seeking
declaratory judgment] can expeditiously solicit and fill orders
for [the potentially infringing product],” and sufficiently
real, because “it appears likely that, once the cloud of
liability for infringement is eliminated, the accused products
can be produced without significant design change.”

Cat Tech

LLC, 528 F.3d at 882-83.
c.

WCM’s Arguments to the Contrary Are Not Persuasive.

The crux of WCM’s factual attack is that “IPS ignores the
fact that the potential redesigned product was not made
available for purchase at the time of the filing of the
Complaint.”

(Def.’s Mem. in Supp., ECF No. 7-1, at 5.)

WCM’s

argument essentially challenges IPS’s ability to establish the
24

second element necessary to establish subject-matter
jurisdiction under the Declaratory Judgment Act:

whether IPS

had made “meaningful preparation to conduct potentially
infringing activity.”

See Ass’n for Molecular Pathology, 689

F.3d at 1318.
First, the Court has found that IPS met its burden of
showing “meaningful preparation to conduct potentially
infringing activity.”

See supra Part II.A.2.b.

Second, WCM relies on Prasco, LLC, which is not applicable
to WCM’s argument.

The analysis in Prasco, LLC, did not address

the second element necessary to establish subject-matter
jurisdiction under the Declaratory Judgment Act.

See Prasco,

LLC, 537 F.3d at 1336 n.4 (“[W]hether there has been potentially
infringing activity or meaningful preparation to conduct
potentially infringing activity . . . . is not in contention
here . . . .”).
Finally, WCM’s argument is factually incorrect.

In

addition to its Response, IPS submitted the Declaration of
Jeffrey A. Humber, which was executed on January 24, 2013.
ECF No. 19-1 at PageID 161.)

(See

In that Declaration, the Product

Development manager of IPS Corporation states that “IPS began
selling [the 2012 Product] in the U.S. on May 31, 2012, and
continues to sell that product in the U.S. presently.”

25

(Id.)

On the date the Complaint was filed, August 9, 2012 (see Compl.,
ECF No. 1), therefore, IPS was selling the 2012 Product.
At the hearing, WCM questioned whether the Declaration of
Jeffrey A. Humber is sufficient to establish subject-matter
jurisdiction.

WCM, however, offered no evidence to contradict

the Declaration.

A preponderance of the evidence before the

Court, therefore, indicates that IPS was selling the 2012
Product when the Complaint was filed.

See M. Maropakis

Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir.
2010) (“A plaintiff bears the burden of establishing subjectmatter jurisdiction by a preponderance of the evidence.”).
In summary, the Court finds that the record is sufficient
to establish subject-matter jurisdiction under the Declaratory
Judgment Act.
3.

WCM’s factual challenge fails.

Resolving This Controversy Serves the Objectives of
the Declaratory Judgment Act.

In SanDisk Corp., the Federal Circuit held that there was
subject-matter jurisdiction under the Declaratory Judgment Act
when the plaintiff did not continue licensing negotiations in
which the defendant asserted a right to a royalty and the
plaintiff contested that right.
1382.

SanDisk Corp., 480 F.3d at

The court reasoned that the plaintiff “need not ‘bet the

farm,’ so to speak, and risk a suit for infringement by cutting
off licensing discussions and continuing in the identified

26

activity before seeking a declaration of its legal rights.”

Id.

(footnote omitted) (citing MedImmune, Inc., 549 U.S. at 132
n.11).
In the instant action, IPS would be put in position similar
to that of the plaintiff in SanDisk Corp.

IPS indicated that it

intended to sell the 2012 Product (see Compl., ECF No. 1, ¶ 13;
IPS Letter of May 25, 2012, ECF No. 4-3, at PageID 34; IPS
Letter of July 18, 2012, ECF No. 4-5, at PageID 58) and WCM
maintained that the 2012 Product infringed WCM’s Patent and
indicated that WCM would pursue legal remedies (see Compl., ECF
No. 1, ¶ 16; WCM Letter of June 19, 2012, ECF No. 4-4, at PageID
47; WCM Letter of July 20, 2012, ECF No. 4-6, at PageID 62-63).
IPS, therefore, had a choice between “‘bet[ting] the farm,’ so
to speak, and risk[ing] a suit for infringement by cutting off
[claim-construction] discussions and continuing in the
identified activity before seeking a declaration of its legal
rights.”

See SanDisk Corp., 480 F.3d at 1382 (footnote omitted)

(citing MedImmune, Inc., 549 U.S. at 132 n.11).
IPS was faced with “a dilemma that it was the very purpose
of the Declaratory Judgment Act to ameliorate.”

SanDisk Corp.,

480 F.3d at 1378-79 (quoting MedImmune, Inc., 549 U.S. 129)
(internal quotation marks omitted).

The Court finds that

“resolving the case serves the objectives for which the

27

Declaratory Judgment Act was created.”

See Cat Tech LLC, 528

F.3d at 883.
In summary, the Court finds that WCM’s facial and factual
challenges to subject-matter jurisdiction are not persuasive and
that this Court may exercise subject-matter jurisdiction over
the instant action pursuant to the Declaratory Judgment Act.

In

addition, the Court finds that resolving the instant action
serves the objectives of the Declaratory Judgment Act.

The

Court, therefore, will exercise subject-matter jurisdiction over
the instant action.
B.

Venue Is Proper in the Western District of Tennessee
Pursuant to 28 U.S.C. § 1391(b)(2).
WCM states that it is challenging venue under Federal Rule

of Civil Procedure 12(b)(3):

“WCM respectfully asks this Court

for an Order: . . . Dismissing this action for improper venue
pursuant to Federal Rule of Civil Procedure 12(b)(3); . . . .”5
(Def.’s Mot., ECF No. 7, at 2.)
Rule 12(b)(3) provides a defense to a claim based on
“improper venue.”

Fed. R. Civ. P. 12(b)(3).

Twenty-eight

U.S.C. § 1400(b) determines venue in “[a]ny civil action for
patent infringement.”

28 U.S.C. § 1400(b) (2006).

5

Venue in an

In its Reply, WCM argues that “IPS has not made any showing of why it should
be excused from [the forum-selection clauses in] the Settlement Agreement or
the [Stipulated] Consent Judgment, and therefore the Court must dismiss or
transfer this case to the agreed upon forum.” (ECF No. 20 at 7.) The forumselection clauses, however, are not relevant to a Rule 12(b)(3) motion. “[A]
forum selection clause should not be enforced through dismissal for improper
venue under FRCP 12(b)(3) because these clauses do not deprive the court of
proper venue.” Wong v. PartyGaming Ltd., 589 F.3d 821, 830 (6th Cir. 2009).

28

action seeking a declaration that a product does not infringe a
patent, however, is governed by 28 U.S.C. § 1391.

See VE

Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1583
(Fed. Cir. 1990) (“It has long been held that a declaratory
judgment action alleging that a patent is invalid and not
infringed — the mirror image of a suit for patent infringement —
is governed by the general venue statutes, not by [28 U.S.C.]
§ 1400(b).”).

Under 28 U.S.C. § 1391, venue is proper in “a

judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial
part of property that is the subject of the action is situated.”
28 U.S.C. § 1391(b)(2) (2006).
WCM argues that “there is no evidence or specific
allegation that a substantial portion of the relevant events
giving rise to this action occurred within Tennessee, or that
the [2012 Product] was designed by IPS in Tennessee.”

(Def.’s

Mem. in Supp., ECF No. 7-1, at 8.)
WCM’s argument is not persuasive and venue is proper in the
Western District of Tennessee.

The Complaint alleges that “IPS

is a corporation . . . having a principal place of business at
500 Distribution Parkway, Collierville, Tennessee 38017, and is
doing business in this State and District.”

(ECF No. 1 ¶ 2.)

Furthermore, the Complaint alleges that “[v]enue is proper in
this Court under the provisions of 28 U.S.C. § 1391 . . .
29

because Plaintiff is in this District and a substantial part of
the events giving rise to Plaintiff’s claims occurred in this
District.”

(Compl., ECF No. 1, ¶ 7.)

In addition, IPS submitted the Declaration of Jeffrey A.
Humber with its Response, stating that the design, production,
and distribution of the 2012 Product occurred in Collierville,
Tennessee:
The Plumbing Division of IPS, which is responsible for
the [2010 Product] is headquartered in Collierville,
Tennessee. This division includes engineering, sales,
and distribution personnel who have knowledge of the
[2012 Product]. Additionally [sic] many if not all of
the documents relating to the design, engineering, and
sales
of
the
[2012
Product]
are
located
in
Collierville, Tennessee.
(Humber Decl., ECF 19-1, at PageID 160.)

Collierville,

Tennessee, is in the Western District of Tennessee.

The Court,

therefore, finds WCM’s challenge to venue unpersuasive and that
venue is proper in the Western District of Tennessee.
Furthermore, WCM conceded at the hearing that venue is
proper in the Western District in Tennessee.

The Court finds,

in addition to the findings above, that WCM has abandoned its
challenge to venue.
As a result, the Court finds that venue is proper in the
Western District of Tennessee pursuant to 28 U.S.C. § 1391(b)(2)
and that WCM has abandoned its arguments regarding improper
venue.

In light of the Court’s findings, the Court need not

30

address IPS’s alternative argument based on personal
jurisdiction.
C.

Transfer to the Colorado District Court Is Not Appropriate.
WCM makes alternative arguments for transfer of venue:

if

venue is improper, WCM argues for transfer based on 28 U.S.C.
§ 1406(a); and, if venue is proper, WCM argues for transfer
pursuant to 28 U.S.C. § 1404(a).
No. 7-1, at 8-11.)

(Def.’s Mem. in Supp., ECF

As stated above, venue is proper in the

Western District of Tennessee pursuant to 28 U.S.C.
§ 1391(b)(2).

See supra Part II.B.

As a result, 28 U.S.C.

§ 1406(a) is not applicable, and the Court will consider
transfer of venue pursuant to 28 U.S.C. § 1404(a).6
“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 or to any district or division to which all parties
have consented.”

28 U.S.C. § 1404(a) (2006).

When considering a motion to transfer under 28 U.S.C.
§ 1404, “a district court should consider the private interests
of the parties, including their convenience and the convenience
of potential witnesses, as well as other public-interest

6

“In reviewing a district court’s ruling on a motion to transfer pursuant to
[28 U.S.C.] § 1404(a), [the Federal Circuit] appl[ies] the law of the
regional circuit . . . .” In re Link_A_Media Devices Corp., 662 F.3d 1221,
1222-23 (Fed. Cir. 2011) (per curiam); see also In re Nintendo Co., 589 F.3d
1194, 1197 (Fed. Cir. 2009).

31

concerns, such as systemic integrity and fairness, which come
under the rubric of interests of justice.”

Moore v. Rohm & Haas

Co., 446 F.3d 643, 647 n.1 (6th Cir. 2006) (internal quotation
marks omitted); see also Stewart Org., Inc. v. Ricoh Corp., 487
U.S. 22, 30 (1988).
“As the permissive language of the transfer statute
suggests, district courts have ‘broad discretion’ to determine
when party ‘convenience’ or ‘the interest of justice’ make a
transfer appropriate.”

Reese v. CNH Am. LLC, 574 F.3d 315, 320

(6th Cir. 2009) (quoting Phelps v. McClellan, 30 F.3d 658, 663
(6th Cir. 1994) and 28 U.S.C. § 1404(a)).
“[W]hen a party moves to transfer a case on the basis of a
forum selection clause, the federal statute governing transfer
motions controls the clause’s interpretation.”

Preferred

Capital, Inc. v. Sarasota Kennel Club, Inc., 489 F.3d 303, 306
(6th Cir. 2007) (citing Stewart Org., Inc., 487 U.S. at 29-30).
“[T]he forum selection clause [is] considered as one of the
factors in the motion to transfer test” under 28 U.S.C.
§ 1404(a).7

Id. at 307 (citing Stewart Org., Inc., 487 U.S. at

7

The case WCM relies on when asserting that a forum-selection clause requires
dismissal or transfer of the action, Mossy Creek Mining, LLC v. Nyrstar IDB,
LLC, No. 3:10-CV-328, 2011 U.S. Dist. LEXIS 114012, *21-23 (E.D. Tenn. Sept.
30, 2011), is not relevant to the instant action. (See Def.’s Reply, ECF No.
20, at 5.) Mossy Creek Mining, LLC, states that, when the parties have
agreed to arbitrate in a particular forum, “a district court outside of that
forum must either dismiss the action or transfer venue under 28 U.S.C.
§ 1404(a)” because “[t]he Federal Arbitration Act prohibits a district court
from compelling parties to arbitrate outside of the district court’s own
district.” Mossy Creek Mining, LLC, 2011 U.S. Dist. LEXIS 114012, at *21.

32

29-30); see also Langley v. Prudential Mortg. Capital Co., 546
F.3d 365, 369 (6th Cir. 2008) (per curiam).
In the case presently before this Court, IPS alleges that
WCM is incorporated, and has its principal place of business, in
Colorado.

(Compl., ECF No. 1, ¶ 3.)

allegation.

WCM does not dispute this

The Court, therefore, finds that IPS could have

filed this declaratory-judgment action in the Colorado District
Court.

See 28 U.S.C. § 1391(b).

The Court next considers the parties’ arguments concerning
private convenience, the interests of justice, and the forumselection clauses in the Settlement Agreement and Stipulated
Consent Judgment.
1.

The Private Interests of the Parties Weigh Against
Transfer.

The Court “should consider the private interests of the
parties, including their convenience and the convenience of
potential witnesses.”

Moore, 446 F.3d at 647 n.1 (internal

quotation marks omitted).
The parties argue that the following considerations are
relevant:

the convenience of the parties, the convenience of

witnesses, and access to proof; the plaintiff’s choice of forum;
and the relative ability of the parties to bear costs.

These

considerations are considered in turn.

This Court is not being asked to compel arbitration, so WCM’s reliance on
Mossy Creek Mining, LLC, is misplaced.

33

a.

Considerations Regarding the Convenience of the
Parties and Witnesses, and Access to Proof, Weigh
Against Transfer.

WCM argues that “[t]he convenience of the parties,
witnesses and access to proof factors” favor transfer “as a
substantial number of the material witnesses and evidence of WCM
are located in Colorado, and Colorado is where the alleged acts
of WCM in conducting its business are likely to have been
committed.”

(Def.’s Mem. in Supp., ECF No. 7-1, at 10.)

Furthermore, WCM argues, “IPS has not provided allegations or
evidence which link any facts or conduct to witnesses or sources
of proof in Tennessee.”

(Id.)

IPS counters that “IPS’s plumbing division is located in
Collierville, Tennessee [sic] in this judicial district” and
that “[t]he engineering, sales, and distribution personnel who
are anticipated to be witnesses in the case, as well as the
documents relating to the design, engineering, and sale of [the
2012 Product] are located in Collierville, Tennessee.”

(Pl.’s

Resp., ECF No. 19, at 16; see also Humber Decl., ECF No. 19-1,
at PageID 160.)
WCM’s arguments are not persuasive, and IPS has shown that
these considerations weigh against transfer.

First, while WCM’s

witnesses and evidence may be located in Colorado, “[i]n patent
infringement cases, the bulk of the relevant evidence usually
comes from the accused infringer,” In re Genentech, Inc., 566
34

F.3d 1338, 1345 (Fed. Cir. 2009) (internal quotation marks
omitted).

Second, WCM was mistaken when it suggested that IPS’s

witnesses and sources of proof are not located in Tennessee.
IPS has shown that its witnesses and sources of proof are
located in the Western District of Tennessee.
As a result, WCM has not shown that considerations
regarding convenience of the parties and witnesses, and access
to proof, favor transfer.

The Court finds that these

considerations weigh against transfer.
b.

The Consideration of Plaintiff’s Choice of Forum
Weighs Against Transfer.

WCM argues that “[a]s venue is improper, it follows that
IPS’s choice of forum must be accorded no weight.”
in Supp., ECF No. 7-1, at 11.)
chosen its home forum.”

(Def.’s Mem.

IPS counters that “IPS has

(Pl.’s Resp., ECF No. 19, at 15.)

As stated above, venue is proper in the Western District of
Tennessee under 28 U.S.C. § 1391(b)(2).

See supra Part II.B.

As a result, contrary to WCM’s argument, IPS’s choice of forum
can be given weight.

See Union Planters Bank, N.A. v. EMC

Mortg. Corp., 67 F. Supp. 2d 915, 921 (W.D. Tenn. 1999).

The

Court finds that this consideration does not favor transfer
because, by filing its lawsuit in this forum, IPS indicated that
it finds the Western District of Tennessee more convenient.

35

As a result, IPS’s choice of forum does not favor transfer.
The Court finds that it weighs against transfer.
c.

The Consideration of the Relative Ability of the
Parties to Bear Expenses Does Not Favor Transfer.

In its Response, IPS argues that this consideration weighs
against transferring this action:

“[T]he relative ability of

litigants to bear expenses in any particular forum [] also
weighs in IPS’s favor.”

(Pl.’s Resp., ECF No. 19, at 16.)

IPS

states that “WCM has instituted an action against IPS in this
Court alleging infringement of six additional patents” after
“WCM voluntarily withdrew its Complaint from the District of
Colorado.”
No. 1.)

(Id.; see also W.D. Tenn. No. 2:13-cv-02019, ECF

IPS argues that this indicates “that not only is WCM

capable of litigating in this District, but it is actively and
voluntarily pursuing litigation in this District.”

(Pl.’s

Resp., ECF No. 19, at 17.)
WCM does not respond to this argument in its Reply.
Since WCM chose to pursue infringement of six unrelated
patents in the Western District of Tennessee, it is reasonable
to conclude that WCM can bear the expenses of litigating in this
district.
This consideration, however, is indeterminate.

While IPS

has shown that WCM can likely afford to litigate in this forum,
IPS has not shown that IPS has less ability to bear expenses

36

“relative” to WCM.

As a result, the Court finds that this

consideration is neutral:

it does not favor transfer and it

does not weigh against transfer.
In summary, WCM does not argue persuasively that any
consideration related to the private interests of the parties
favors transfer to the Colorado District Court.

Rather, the

Court finds that the two considerations raised by WCM weigh
against transfer and that the consideration raised by IPS is
neutral.
2.

Public-Interest Concerns Do Not Favor Transfer.

The Court “should consider . . . public-interest concerns,
such as systemic integrity and fairness, which come under the
rubric of ‘interests of justice.’”

Moore, 446 F.3d at 647 n.1

(internal quotation marks omitted).
The Court considers systematic integrity and fairness in
turn.
a.

Considerations of Systematic Integrity Do Not Favor
Transfer.

First, WCM argues that “local courts have a strong interest
in having local controversies decided at home.”

(Def.’s Mem. in

Supp., ECF No. 7-1, at 10 (citing Coors Brewing Co. v. Oak
Beverage, Inc., 549 F. Supp. 2d 764, 773 (E.D. Va. 2008)).)

IPS

counters that “WCM makes nothing more than conclusory statements
to support its assertion that somehow this dispute is more

37

‘local’ to the District of Colorado than the Western District of
Tennessee.”

(Pl.’s Resp., ECF No. 19, at 17.)

The Court agrees with IPS.

In light of the fact that IPS’s

plumbing division is located in this judicial district (see
Humber Decl., ECF No. 19-1, at PageID 160), this action is not
any more “local” to the Colorado District Court than it is to
the United States District Court for the Western District of
Tennessee.
Second, IPS argues that “it is judicially inefficient to
transfer this case to the District of Colorado while WCM
maintains active patent litigation in this very District.”
(Pl.’s Resp., ECF No. 19, at 17.)
The Court does not find IPS’s argument persuasive.

The six

patents at issue in WCM’s infringement action against IPS are
unrelated to the patent at issue in the instant action.
W.D. Tenn. No. 2:13-cv-02019, ECF No. 1.)

(See

IPS does not explain

why it would be more efficient for the judiciary if the United
States District Court for the Western District of Tennessee
hears actions concerning unrelated patents.

IPS’s argument

regarding efficiency is conclusory and, therefore, unpersuasive.
While not raised by the parties, the Court also finds it
relevant that the docket of the prior case in the Colorado
District Court indicates, and WCM confirmed at the hearing, that
the Colorado District Court made no legal or factual
38

determinations, and considered no motions, before the parties
settled.

(See D. Colo. No. 1:10-cv-00994.)

There is no

indication, therefore, that the Colorado District Court has any
special expertise or knowledge regarding WCM’s Patent that would
make it a better forum.
As a result, considerations of systematic integrity do not
favor transfer.
neutral:

The Court finds that these considerations are

WCM has not persuaded the Court that these

considerations weigh in favor transfer, IPS has not persuaded
the Court that these considerations weigh against transfer, and
there is no indication that the Colorado District Court has any
special expertise or knowledge regarding WCM’s Patent.
b.

Considerations of Fairness Do Not Favor Transfer.

The only argument in which WCM specifically addresses the
“interests of justice,” is the following:
The interests of justice factor weighs in favor of
transferring this action to the District of Colorado
as well.
On information and belief, there is no
possibility of an unfair trial or harassment by
transferring this action to Colorado, because IPS
transacts a significant amount of business in Colorado
and receives a significant amount of revenue and other
benefits from Colorado.
(Def.’s Mem. in Supp., ECF No. 7-1, at 10-11.)
WCM’s argument, however, indicates only that there would be
no prejudice in the Colorado District Court, not that transfer
will avoid prejudice to either party.

39

WCM’s argument merely

indicates that fairness concerns would not make transfer to the
Colorado District Court inappropriate.
As a result, considerations of fairness do not weigh in
favor of transfer.

The Court finds that considerations of

fairness are neutral.
In summary, public-interest concerns do not favor transfer
to the Colorado District Court.

The Court finds that

considerations of systematic integrity and fairness are neutral.
3.

The Forum-Selection Clauses Are Not Relevant to This
Action and, Even If Considered, Are Not Sufficient to
Persuade the Court that Transfer Is Appropriate.

The Court now will consider, in turn, whether the forumselection clauses are valid and binding; whether WCM admitted
that the 2012 Product is not a colorable imitation of the 2010
American Brass Product; the scope of the forum-selection
clauses; and whether the forum-selection clauses would make
transfer appropriate in light of the other considerations under
28 U.S.C. § 1404(a).
a.

The Forum-Selection Clauses Are Valid and Binding on
IPS for the Purposes of This Motion.

IPS does not dispute that the forum-selection clauses in
the Settlement Agreement and Stipulated Consent Judgment are
valid and binding.

The Court, therefore, considers the forum-

selection clauses valid and binding for the purposes of this
Motion.

40

This, however, does not mean that the forum-selection
clauses are relevant or require transfer of this action to the
Colorado District Court.
b.

See infra Part II.C.3.

WCM Did Not Admit that the 2012 Product Is Not a
Colorable Imitation of the 2010 American Brass
Product.

IPS argues that WCM stated in its letter dated July 20,
2012, “that it considers the [2012 Product] to be ‘different’
than the [2010 American Brass Product],” so “WCM effectively
concedes that the [2012 Product] is not a colorable imitation of
the previously accused product.”
12-13.)

(Pl.’s Resp., ECF No. 19, at

IPS’s argument refers to the following language in

WCM’s letter:
In response to your last letter, you seem to focus on
our previous claim construction directed to IPS’ prior
infringing device, in comparison with our present
construction of the claims as it relates to IPS’
redesigned device. As you can appreciate, because the
two infringing products are different, our analysis is
obviously
directed
to
the
distinctions
of
the
respective features.
(ECF No. 4-6 at PageID 60 (emphasis added).)
IPS’s argument is neither conclusive nor dispositive.

A

product can be both “different” and a “colorable imitation.”
When determining whether a product is a colorable imitation of a
patented product,
[t]he analysis must focus not on differences between
randomly chosen features of the product found to
infringe in the earlier infringement trial and the
newly accused product, but on those aspects of the
41

accused product that were previously alleged to be, and
were a basis for, the prior finding of infringement,
and the modified features of the newly accused product.
TiVo Inc. v. EchoStar Corp., 646 F.3d 869, 882 (Fed. Cir. 2011)
(citation omitted).

A general statement that a product is

“different,” therefore, is not sufficient to admit that a
product is not a colorable imitation:

a party must at least

state that a feature of a newly accused product that was
previously a basis for a finding of infringement is different.
As a result, WCM’s general statement that “the two infringing
products are different” is not an admission that the 2012
Product is not a colorable imitation of the 2010 American Brass
Product.
c.

The Forum-Selection Clauses Are Limited to Disputes
Related to the 2010 American Brass Product and
“Colorable Imitations Thereof” and, Therefore, Not
Applicable to IPS’s Claim for Declaratory Relief for
Infringement.

In its Reply brief, WCM argues that this action,
arises over a disagreement between the parties as to
whether the restrictions placed on IPS by the
Settlement Agreement and/or Consent Judgment apply
. . . .
Stated another way, IPS brought this
[declaratory-judgment] Action to seek a declaration
that the [2012 Product] is not a colorable imitation of
the [2010 American Brass Product] — which would in turn
determine whether IPS has violated the Settlement
Agreement.
(Def.’s Reply, ECF No. 20, at 3.)
IPS argues that “IPS is not seeking any ruling from this
Court regarding the [Stipulated] Consent Judgment, and IPS’s
42

compliance with the [Stipulated] Consent Judgment is not at
issue in this case.”

(Pl.’s Resp., ECF No. 19, at 13.)

The Court agrees with IPS.

Whether a product is “colorable

imitation” and whether a product infringes are distinct
inquiries; the forum-selection clauses are limited to the 2010
American Brass Product and “colorable imitations” thereof; and
IPS asks this Court for a declaration that the 2012 Product does
not infringe WCM’s Patent.

These conclusions are discussed in

turn.
i.

Whether a Product Is a “Colorable Imitation” and
Whether a Product Infringes Are Distinct Inquiries.

The Federal Circuit “reject[s] [the] infringement-based
understanding of the colorably different test.”
F.3d at 882.

TiVo Inc., 646

To determine colorability,

[t]he analysis must focus not on differences between
randomly chosen features of the product found to
infringe in the earlier infringement trial and the
newly accused product, but on those aspects of the
accused product that were previously alleged to be,
and
were
a
basis
for,
the
prior
finding
of
infringement, and the modified features of the newly
accused product.
Id. (citation omitted).

In contrast, infringement is a broader

inquiry to determine liability “when an unauthorized party
‘makes, uses, offers to sell, or sells any patented invention,
within the United States or imports into the United States any
patented invention during the term of the patent.’”

43

See

Superior Indus., LLC v. Thor Global Enters. Ltd., 700 F.3d 1287,
1294 (Fed. Cir. 2012) (quoting 35 U.S.C. § 271(a)).
Inquiries into infringement and colorability, therefore,
are distinct.
ii.

The Settlement Agreement and the Stipulated Consent
Judgment Are Limited to the 2010 American Brass
Product and “Colorable Imitations” of That Product.

The forum-selection clauses in the Settlement Agreement and
the Stipulated Consent Judgment are limited to disputes
regarding the 2010 American Brass Product and “colorable
imitations thereof.”

The Settlement Agreement states that:

“[American Brass] shall . . . refrain in the Unites States from
making, selling, offering for sale, using, and/or importing
Accused Products”; and that “‘Accused Products’ as used in this
Agreement is understood to mean the [2010 American Brass
Product] and all colorable imitations thereof.”
at PageID 175.)

(ECF No. 20-2

The Stipulated Consent Judgment states that the

Colorado District Court “permanently enjoins [American Brass and
its successors and ensigns] from directly or indirectly
infringing [WCM’s Patent] . . . by making, using, selling,
offering for sale, and importing [the 2010 American Brass
Product] and colorable imitations thereof.”

(ECF No. 7-3 at

PageID 107.)
The Settlement Agreement incorporates the Stipulated
Consent Judgment and states that it “shall be governed by and
44

construed in accordance with the laws of the State of Colorado.”
(ECF No. 20-2 at PageID 175, 177.)

Colorado courts “consider

written contracts that are complete and free from ambiguity to
express the intention of the parties, and [Colorado courts] will
enforce these contracts according to their plain language.”
SDI, Inc. v. Pivotal Parker Commercial, LLC, 292 P.3d 1165, 1169
(Colo. App. 2012) (citing Ad Two, Inc. v. City & Cnty. of Denver
ex rel. Manager of Aviation, 9 P.3d 373, 376 (Colo. 2000)).
Both the Settlement Agreement and the Stipulated Consent
Judgment unambiguously state that they are limited to the 2010
American Brass Product and “colorable imitations thereof.”

(See

Settlement Agreement, ECF No. 20-2, at PageID 175; D. Colo. J.,
ECF No. 7-3, at Page ID 107.)

Based on the plain language of

the agreements, the Court finds that the forum-selection clauses
contained in those agreements are limited to the 2010 American
Brass Product and “colorable limitations thereof.”
WCM’s argument to the contrary is not persuasive.

WCM

argues that interpreting the forum-selection clause so as not to
apply to IPS’s claim “places the cart before the horse, and
would produce a perverse result.”
20, at 7.)

(See Def.’s Reply, ECF No.

WCM argues that the “illogical and absurd result” of

such an interpretation would be that “a dispute involving a
redesigned press-in trim kit could be brought in any district
court, and only if that court found that the redesigned product
45

was a ‘colorable imitation’ would venue be appropriate in
Colorado.”

(Id.)

Contrary to WCM’s argument, the Court’s interpretation of
the forum-selection clauses does not mean that those clauses are
triggered only if a product is found to be a colorable imitation
of the 2010 American Brass Product.

Rather, the forum-selection

clauses are triggered if either party brings a claim regarding
the 2010 American Brass Product or a “colorable imitation
thereof.”

It is not an “illogical and absurd result” for the

Court to limit the forum-selection clauses to claims regarding
the 2010 American Brass Product or “colorable imitations
thereof” based on the plain language of the Settlement Agreement
and Stipulated Consent Judgment.
At the hearing, WCM asserted that it intended to bring
claims for violations of the Settlement Agreement and the
Stipulated Consent Judgment.

The Court will not consider claims

that WCM may bring at some undetermined time in the future.
AstraZeneca Pharm. LP v. Apotex Corp., 669 F.3d 1370, 1380 (Fed.
Cir. 2012) (“‘A claim is not ripe for adjudication if it rests
on contingent future events that may not occur as anticipated,
or indeed may not occur at all.’” (quoting Texas v. United
States, 523 U.S. 296, 300 (1998))); Winget v. JP Morgan Chase
Bank, N.A., 537 F.3d 565, 582 (6th Cir. 2008) (“As a rule, we do
not allow litigation on premature claims to ensure that courts
46

litigate only existing, substantial controversies, not
hypothetical questions or possibilities.” (internal quotation
marks omitted)).
iii. IPS Requests Relief Regarding Infringement, Not
Regarding Colorability.
IPS requests a declaration that the 2012 Product does not
infringe WCM’s Patent:
enter judgment:

“Plaintiff IPS Prays that this Court

(a) Declaring that Plaintiff, and including

specifically [the 2012 Product] . . . has not infringed and is
not infringing any valid purported patent rights of WCM in
[WCM’s Patent] . . . .”

(Compl., ECF No. 1, ¶ 24(a).)

IPS’s

Complaint, therefore, requests relief regarding infringement of
WCM’s Patent; it does not request relief regarding whether the
2012 Product is a “colorable imitation” of the 2010 American
Brass Product or whether the 2012 Product violates the
Settlement Agreement or the Stipulated Consent Judgment.
WCM’s arguments to the contrary are not persuasive.

WCM

argues that “IPS brought this [declaratory-judgment] action to
seek a declaration that the [2012 Product] is not a colorable
imitation of the [2010 American Brass Product].”
ECF No. 20, at 3.)

(Def.’s Reply,

This argument is belied by the language of

the Complaint, which uses the words “infringed” and “infringing”
and not the words “colorable imitation.”
¶ 24(a).)

47

(See ECF No. 1

WCM also makes two assertions based on the fact that the
Settlement Agreement refers to “any dispute arising from the
Settlement Agreement.”

(See Def.’s Reply, ECF No. 20, at 4; see

also Settlement Agreement, ECF No. 20-2, at PageID 177.)

WCM

relies on those assertions to conclude that “[t]he single count
asserted by IPS, which seeks a declaration of non-infringement
of [WCM’s Patent by] a redesign of the [2010 American Brass
Product], is really a claim that the [2012 Product] does not
breach the Settlement Agreement.”

(Def.’s Reply, ECF No. 4, at

4.)
WCM’s assertions are baseless.

First, WCM relies on Union

Planters Bank, N.A., to assert that the United States District
Court for the Western District of Tennessee has enforced a
forum-selection clause “that used broad language, such as
‘arising,’ as is present in the parties’ Settlement Agreement.”
(Id.)

The agreement under consideration in Union Planters Bank,

N.A., stated that “all disputes arising hereunder shall be
submitted to” Texas courts, see Union Planters Bank, N.A., 67 F.
Supp. 2d at 917, and the Settlement Agreement in the instant
action states that the Colorado District Court “will have
exclusive jurisdiction over any dispute arising from this
Settlement Agreement” (ECF No. 20-2 at PageID 177).
WCM, however, overlooks an important distinction between
the agreement considered in Union Planters Bank, N.A., and the
48

Settlement Agreement being considered by this Court.

The

Settlement Agreement forbids IPS “from making, selling, offering
for sale, using, and/or importing” the 2010 American Brass
Product “and all colorable imitations thereof.”
20-2 at PageID 175.)

(See ECF No.

In Union Planters Bank, N.A., there is no

indication that the agreement under consideration had a similar
provision limiting the term “arising hereunder.”
Planters Bank, N.A., 67 F. Supp. 2d at 917.

See Union

Union Planters

Bank, N.A., therefore, does not allow WCM to infer that the
language “arising from” in the Settlement Agreement negates the
language that limits the Settlement Agreement to the 2010
American Brass Product “and all colorable imitations thereof.”
Second, WCM asserts that “[t]here can be little debate that
the central dispute between the parties in this action ‘arises’
out of the Settlement Agreement.”
4.)

(Def.’s Reply, ECF No. 20, at

WCM supports this assertion by citing to three cases.

(See

id.)
The cases cited by WCM, however, are not applicable to the
instant action because those cases interpreted broader contract
language contained in arbitration clauses.

(See id.)

WCM first

cites GATX Management Services, LLC v. Weakland, 171 F. Supp. 2d
1159, 1163 (D. Colo. 2001).

In GATX Management Services, LLC,

the Colorado District Court interpreted a contract provision
much broader than the one before this Court:
49

“The arbitration

provision mandates arbitration for ‘any and all claims, demands,
causes of action, disputes, controversies, and other matters in
question arising out of or relating to this Agreement, any of
its provisions, or the relationship between the parties created
by this Agreement.’”
1163.

GATX Mgmt. Servs., LLC, 171 F. Supp. 2d at

Furthermore, the Colorado District Court found that

arbitration clause broad enough to include “not only those
issues arising out of the employment contract, but even those
issues with any connection to the contract or to the
relationship between the parties” in light of the “strong
federal policy favoring arbitration for dispute resolution” that
“‘requires a liberal reading of arbitration agreements.’”

Id.

at 1162-63 (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 22 n.27 (1983)).
WCM then cites P & P Industries, Inc. v. Sutter Corp., 179
F.3d 861, 871 (10th Cir. 1999), which interpreted an arbitration
clause mandating arbitration for “‘[a]ny controversy, claim, or
breach arising out of or relating to this agreement’” in light
of “the strong presumption in favor of arbitrability.”

P & P

Indus., Inc., 179 F.3d at 871 (alteration in original).

The

last case cited by WCM is American Recovery Corp. v.
Computerized Thermal Imaging, Inc., 96 F.3d 88, 93 (4th Cir.
1996), which interpreted an arbitration clause mandating
arbitration of “any dispute that ‘ar[ose] out of or related to’
50

the consulting agreement” in light of Supreme Court precedent
stating that “‘as a matter of federal law, any doubts concerning
the scope of arbitrable issues should be resolved in favor of
arbitration.’”

Am. Recovery Corp., 96 F.3d at 92-93 (alteration

in original) (quoting Moses H. Cone Mem’l Hosp., 460 U.S. at 2425).
In the cases cited by WCM, not only is the language of the
contracts at issue broader, but the courts also interpreted that
language in light of the federal policy favoring arbitration.
There is no indication in those cases that interpretation of the
broader language of those contracts should apply to the narrower
language at issue in the instant case, which refers only to “any
dispute arising from this Settlement Agreement” (ECF No. 20-2 at
PageID 177).

Furthermore, there is no indication that the

federal policy in favor of arbitration agreements should apply
to the Settlement Agreement, which does not contain an
arbitration clause.

WCM’s citations, therefore, do not support

its assertion that the instant action “‘arises’ out of the
Settlement Agreement” (see Def.’s Reply, ECF No. 20, at 4).
In summary, the forum-selection clauses are not applicable
to the action currently before this Court.

As a result, the

forum-selection clauses do not influence the considerations
under 28 U.S.C. § 1404(a).

Since those considerations weigh

51

against transferring this action to the Colorado District Court,
the Court finds that transfer of venue is not appropriate.
c.

Even If Considered in Light of the Forum-Selection
Clauses, the Considerations Under 28 U.S.C. § 1404(a)
Do Not Favor Transfer.

“[T]he forum selection clause [is] considered as one of the
factors in the motion to transfer test” under 28 U.S.C.
§ 1404(a).

Preferred Capital, Inc., 489 F.3d at 307 (citing

Stewart Org., Inc., 487 U.S. at 29-30); see also Langley, 546
F.3d at 369.

The district court should “address such issues as

the convenience of [the indicated] forum given the parties’
expressed preference for that venue, and the fairness of
transfer in light of the forum-selection clause and the parties’
relative bargaining power.”

Stewart Org., Inc., 487 U.S. at 29.

“It is conceivable in a particular case . . . that because of
[the factors considered under 28 U.S.C. § 1404(a)] a district
court acting under [28 U.S.C.] § 1404(a) would refuse to
transfer a case notwithstanding the counterweight of a forumselection clause . . . .”

Id. at 30-31.

WCM asserts that the forum-selection clauses “outweigh[]
any convenience arguments [IPS] has made in an attempt to
maintain the case in Tennessee.”
3.)

(Def.’s Reply, ECF No. 20, at

In addition, WCM refers to the arguments it made regarding

considerations under 28 U.S.C. § 1404(a):

52

In its Motion, WCM has presented the reasons why,
should the Court find that dismissal is not proper, it
must therefore transfer this action to the District of
Colorado pursuant to [28 U.S.C. §] 1404(a).
Those
same reasons apply in view of the forum selection
clause IPS agreed to in October, 2010.
(Id. at 6.)
In the instant action, the parties do not argue that the
“relative bargaining power,” see Stewart Org., Inc., 487 U.S. at
29, of the parties that negotiated the forum-selection clauses
is significant.

As a result, the Court does not rely on this

consideration.
The Court considers, in turn, the forum-selection clauses’
effect on WCM’s arguments regarding considerations of private
convenience and public interest.
i.

Even in Light of the Parties’ Expressed Preference for
the Colorado District Court, Considerations of
Convenience Would Not Favor Transfer.

First, WCM argues that “a substantial number of the
material witnesses and evidence of WCM are located in Colorado,
and Colorado is where the alleged acts of WCM in conducting its
business are likely to have been committed.”
Supp., ECF No. 7-1, at 10.)

(Def.’s Mem. in

The forum-selection clauses,

however, do not change the fact that “[i]n patent infringement
cases, the bulk of the relevant evidence usually comes from the
accused infringer.”

See In re Genentech, Inc., 566 F.3d at 1345

(internal quotation marks omitted).

53

Second, WCM argues that “IPS has not provided allegations
or evidence which link any facts or conduct to witnesses or
sources of proof in Tennessee.”
No. 7-1, at 10.)

(Def.’s Mem. in Supp., ECF

The forum-selection clauses, however, do not

change the Court’s finding that IPS has provided such
allegations and evidence.

See supra Part II.C.1.a.

Finally, after the present action was commenced, WCM filed
a separate action with this Court alleging that IPS infringed
six unrelated patents held by WCM.
02019, ECF No. 1.)

(W.D. Tenn. No. 2:13-cv-

While the six patents referenced in WCM’s

infringement action are different from the patent at issue in
the instant action, transferring the instant action to the
Colorado District Court would require the parties to pursue
litigation with one another in two different forums.
WCM does not indicate how enforcing the forum-selection
clauses would counterbalance the inconvenience of litigating in
two forums.

As indicated by the docket in the action between

American Brass and WCM, and as admitted by WCM at the hearing,
the Colorado District Court did not make any findings regarding
WCM’s Patent or the 2010 American Brass Product before the
parties settled.

(See D. Colo. No. 1:10-cv-00994.)

As a

result, the parties’ choice of forum does not reflect a
preference for a court that is more familiar with the issues
raised in the present action.
54

The forum-selection clauses, therefore, do not change the
Court’s conclusion regarding considerations of private
convenience.

See supra Part II.C.1.

Even if considered in

light of the forum-selection clauses, the Court finds that
considerations of private convenience would still weigh against
transfer.
ii.

Even in Light of the Forum-Selection Clauses, PublicInterest Concerns Would Not Favor Transfer.

First, WCM argues that “local courts have a strong interest
in having local controversies decided at home.”

(Def.’s Mem. in

Supp., ECF No. 7-1, at 10 (citing Coors Brewing Co., 549 F.
Supp. 2d at 773).)

The forum-selection clauses, however, do not

change the fact that the controversy is between parties from
different states and that IPS’s plumbing division is located in
the Western District of Tennessee.

See supra Part II.C.2.a.

The controversy remains just as local to the United States
District Court for the Western District of Tennessee as it does
to the Colorado District Court.
Second, the forum-selection clauses do not change the fact
that the Colorado District Court has no special expertise or
knowledge regarding WCM’s Patent.

See supra Part II.C.2.a.

Finally, WCM argues that “there is no possibility of an
unfair trial or harassment by transferring this action to
Colorado, because IPS transacts a significant amount of business

55

in Colorado and receives a significant amount of revenue and
other benefits from Colorado.”
No. 7-1, at 11.)

(Def.’s Mem. in Supp., ECF

At most, the forum-selection clauses indicate

that IPS’s successor, American Brass, agreed that it will not be
subject to an unfair trial or harassment in the Colorado
District Court.

As stated above, this argument does not favor

transfer because it merely indicates that transfer to the
Colorado District Court would not be inappropriate for this
reason.

See supra Part II.C.2.b.

Even if considered in light of the forum-selection clauses,
therefore, the Court finds that public-interest concerns would
not weigh in favor of transfer.
In summary, the forum-selection clauses do not indicate
that considerations of private convenience or public interest
favor transfer.

Under these circumstances, the Court finds that

this is a case in which “a district court acting under [28
U.S.C.] § 1404(a) [can] refuse to transfer a case
notwithstanding the counterweight of a forum-selection clause.”
See Stewart Org., Inc., 487 U.S. at 31.
4.

WCM Does Not Offer Any Considerations that Favor
Transfer to the Colorado District Court.

The considerations raised by the parties related to private
convenience and public interest do not weigh in favor transfer
of this action to the Colorado District Court.

56

Rather, the

considerations are either neutral or weigh against transferring
this action.

The forum-selection clauses in the Settlement

Agreement and the Stipulated Consent Judgment are not applicable
to the action presently before this Court because those forumselection clauses are limited to the 2010 American Brass Product
and “colorable imitations thereof.”

Furthermore, even if

considered in light of the forum-selection clauses, the
considerations under 28 U.S.C. § 1404(a) do not weigh in favor
transferring this action to the Colorado District Court.
As a result, the Court holds that transferring this action
to the Colorado District Court is not appropriate.

See 28

U.S.C. § 1404(a).
III. CONCLUSION
For the reasons stated above, Defendant’s “Motion to
Dismiss for Lack of Declaratory Judgment Jurisdiction, Improper
Venue Pursuant to FRCP 12(b)(3), or in the Alternative, to
Transfer Action to the District of Colorado” (ECF No. 7) is
DENIED.

IT IS SO ORDERED, this 29th day of March, 2013.
/s/ Jon P. McCalla
JON P. McCALLA
CHIEF U.S. DISTRICT JUDGE

57