Semiconductor Energy Laboratory Co., Ltd. v. Samsung Electronics Co., Ltd. et al

Filing 49

ORDER denying 14 Motion to Transfer. Signed by Chief Judge Barbara B. Crabb on 6/8/2009. (llj)

IN THE UNITED STATES DISTRICT COURT FO R THE WESTERN DISTRICT OF WISCONSIN --------------------------------------------S EM IC O N D U C T O R ENERGY LABORATORY CO., LTD., P l a i n t i ff , v. S AM S U N G ELECTRONICS CO., LTD., S-LCD CORPORATION, SAMSUNG E L EC T R O N IC S AMERICA, INC., and S AM S U N G TELECOMMUNICATIONS A M ER IC A, LLC, D efendan ts. --------------------------------------------In this civil action for patent infringement, defendants Samsung Electronics C o m p an y, Ltd., S-LCD Corporation, Samsung Electronics America, Inc. and Samsung Telecom m unications America, LLC have moved to transfer venue under 28 U.S.C. § 1404(a) to the United States District Court for the Eastern District of Virginia, which they allege is fam iliar with the issues in this case and is a more convenient forum for key witnesses. Dkt. # 15. Plaintiff Semiconductor Energy Laboratory Company, Ltd. opposes the transfer, arguin g that the parties have no connection to Virginia and that there is no related case in th at district at this time. Dkt. #33.

O P IN IO N AND ORDER 09-cv-1-bbc

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After analyzing the factors under § 1404(a), I find that defendants have failed to show that transfer to Virginia is clearly more convenient or necessary to promote judicial efficiency, particularly in light of the fact that the parties' previous litigation in that state ended eleven years ago. Therefore, defendants' motion to transfer venue will be denied. From the complaint and the documents the parties submitted in conjunction with the pen ding motion, I find the following facts to be undisputed.

FACTS A. Parties P lain tiff Semiconductor Energy Laboratory Company, Ltd. is a Japanese corporation w i th a principal place of business in Atsugi-shi, Japan. Plaintiff undertakes research and developm ent in the fields of semiconductor thin-film transistor technology, thin-film i n te grated circuits, liquid crystal display technology and organic light-emitting diode displays. Plaintiff has never had an office or conducted any research, design, development, engineering or manufacturing activities in the United States. All documents relating to the p aten ts-in -su it are located in Japan. D efen dan ts Samsung Electronics Company, Ltd. (Samsung Electronics) and S-LCD C o rpo ration (S-LCD) are Korean corporations, with their principal places of business in S outh Korea. Samsung Electronics owns a majority of the stock in and controls S-LCD.
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D efendant Samsung Electronics America, Inc. (Samsung Electronics America) is a New York co rp o ratio n with a principal place of business in Ridgefield Park, New Jersey. Samsung E lectro n ics America is a wholly owned subsidiary of Samsung Electronics. Defendant

Sam sung Telecommunications America, LLC (Samsung Telecommunications) is a Delaware co rp o ratio n with a principal place of business in Richardson, Texas. Samsung

T elecom m un ication s is a subsidiary of Samsung Electronics. All defendants manufacture, assem ble, import, distribute and sell LCD (liquid crystal display) products throughout the U nited States, including Wisconsin.

B. Patents-In-Suit and Alleged Infringing Products Plaintiff owns all rights, titles and interest in the following patents: 1. United States Patent No. 6,900,463 (the `463 patent), entitled "S em ico n du cto r Device," issued on May 31, 2005; 2. United States Patent No. 7,215,402 (the `402 patent), entitled "Electronic D e vice Having Liquid Crystal Display Device," issued on May 8, 2007; 3. United States Patent No. 7,394,516 (the `516 patent), entitled "Liquid C rystal Display Device Having A Particular Conductive Layer," issued on July 1 , 2008; and 4. United States Patent No. 7,413,937 (the `937 patent), entitled "Sem icon ductor Device," issued on August 19, 2008.

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T h e accused products include large-screen televisions, computer monitors, laptop com puters, digital cameras and mobile phones with LCD screens. The LCD screens in each o f these products are based on technology in which microscopically thin films of sem iconductor and other materials are formed sequentially to create "thin-film transistors" that individually turn on and off millions of pixels in a display. The technology helps create sharp images and vibrant colors. The patents-in-suit are directed to that technology. Until June 30, 2005, defendants held a license to manufacture and sell plaintiff's LCD pan els in the United States. After defendants' license lapsed on June 30, 2005, the parties attem pted to negotiate a license renewal. After failing to reach an agreement, plaintiff filed suit for patent infringement in this court on January 2, 2009. Defendants sold the accused p ro du cts at issue in this case on or after May 31, 2005.

C. Witnesses Shunpei Yamazaki is the president of plaintiff and an inventor of three of the four patents-in-suit. He works and resides in Japan. Between January 1995 and May 2000, Y a m a zak i traveled to the Eastern District of Virginia 11 times to meet with examiners from the United States Patent and Trade Office or plaintiff's patent prosecution attorneys. Since M ay 2000, Yamazaki has not traveled to Virginia but has traveled 27 times to Chicago, Illino is, to meet with plaintiff's attorneys.
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G erald Ferguson is a retired lawyer who lives in Fairfax County, Virginia. Before he retired in 1999, Ferguson prosecuted most of plaintiff's patents. He will appear voluntarily for a videotaped deposition in the vicinity of Washington, D.C. and, if necessary, will travel to Wisconsin to testify at trial. Eric Robinson, Jeffrey Costellia, John Hayden and Roberto Devoto are attorneys in V irginia or Washington, D.C., who have prosecuted plaintiff's patent applications. All are w illing to appear voluntarily for videotaped depositions or at trial in Wisconsin.

D. Previous Litigation In October 1996, plaintiff filed suit in the Eastern District of Virginia, alleging that the Samsung defendants in this case infringed the following patents belonging to it: United States Patent No. 5,349,204 (the `204 patent), United States Patent No. 5,521,400 (the `40 0 patent) and United States Patent No. 5,543,636 (the `636 patent). These patents relate to semiconductor materials, devices and thin film transistors, which are used in high-quality flat panel displays known as Active Matrix Liquid Crystal Displays (AMLCDs). A M L C D s are used in portable laptop computers and the video screens in television sets and desktop computers. The `463 patent at issue in the instant suit and the `636 patent at issue in the 1996 suit have some claims limitations in common. However, every claim of the `636

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p aten t contains a low impurity limitation, which requires a low concentration of carbon, nitro gen or oxygen in the channel region of a transistor. In support of plaintiff's opposition to a motion to transfer venue of the 1996 case, Y a m a zak i averred that plaintiff's "contacts are significantly closer to the Eastern District of V i rgin ia than to any other district in the United States" for the following reasons: 1) plaintiff's patents are its primary products and its patent attorney, Ferguson, and the United S tates Patent and Trade Office are located in the Eastern District of Virginia; 2) many do cum ents relating to the prosecution of plaintiff's patents are located in Ferguson's office; an d 3) as the inventor of the patents-in-suit and plaintiff's president, Yamazaki would be a key witness, and he travels to the Eastern District of Virginia any time he visits the United S t a t es . O n March 3, 1998, United States District Court Judge Ellis entered a stipulation and ord er by which plaintiff agreed not to assert the `204 and `400 patents, "or any reissues, reexam inations or continuations of those patents, against any Samsung active matrix display havin g the same thin film transistor structure, including impurity levels, as Samsung's current products." Semiconductor Energy Laboratory Company v. Samsung Electric

C om pan y, Case No. 96-1460-A (E.D. Va. Dec. 6, 1996) (SEL I). A month later, Judge Ellis fo un d that plaintiff had engaged in inequitable conduct during the prosecution of the `636

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patent, rendering the entire patent unenforceable.

Semiconductor Energy Laboratory

C om pan y v. Samsung Electric Company, 4 F. Supp. 477, 496 (E.D. Va. 1998). In 2000, plaintiff filed suit in the District Court for the District of Columbia, alleging th at the Samsung defendants had infringed its United States Patent No. 6,028,264 (the `264 patent), relating to the level of carbon in the material used to make active matrix displays. S em ico n du cto r Energy Laboratory Company v. Samsung Electric Company, Case No. 00750 (D.D.C. Aug. 2, 2000) (SEL II). The district judge transferred that case to the Eastern D istrict of Virginia because plaintiff had no ties to the District of Columbia, plaintiff had asserted in SEL I that the Eastern District of Virginia was the center of its United States activitie s and the threshold question in the case was whether plaintiff had violated the stip ulatio n and order entered in SEL I. SEL II, case no. 00-750, Aug. 2, 2000 order, at 3-4.

D I S C U S S IO N 28 U.S.C. § 1404(a) allows a district court to transfer a case when the moving party has shown that transfer would serve the convenience of parties and witnesses and promote the interests of justice. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 19 86 ). This requires an analysis of (1) the plaintiff's choice of forum; (2) the convenience to parties; (3) the convenience to witnesses; and (4) the interests of justice. Transfer is pro per when venue is proper in the transferor district, the transferee district is one in which
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the action could have been brought and the transferee court is "clearly more convenient." Id. The parties do not deny that venue is proper in this court or that the action could have been brought in the Eastern District of Virginia.

A. Choice of Forum and Convenience to Parties N either of these factors is dispositive. Plaintiff has never had an office or conducted an y research, design, development, engineering or manufacturing activities in the United States. Most of the defendants are foreign corporations and none has an office in Virginia. R elying on Yamazaki's 1996 affidavit, defendants attempt to argue that Virginia is m ore convenient for plaintiff. This argument is not persuasive for two reasons. First, defendan ts focus on plaintiff's convenience and not their own. Presumably, if plaintiff chose to file suit in Wisconsin, it is willing to overlook any inconvenience associated with litigating in this forum. In re National Presto Industries, Inc., 347 F.3d 662, 664 (7th Cir. 2003) ("unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed") (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947) (em phasis added)). Second, things have changed in the past 13 years. In 1996, Yamazaki averred that plaintiff's patent attorney, Ferguson, and many documents were located in V i rgin ia and that Yamazaki traveled regularly to Northern Virginia and the District of C olum bia. He now avers that since May 2000, he has traveled primarily to Chicago, Illinois
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to meet with plaintiff's attorneys and that all relevant documents are located in Japan. Thus, V irginia is no more convenient to the parties than Wisconsin. Id. ("when the inconvenience of the alternative venues is comparable there is no basis for a change of venue; the tie is aw arded to the plaintiff").

B . Convenience to Witnesses T o demonstrate this convenience, defendants are required to "clearly specify the key w itnesses to be called" and submit "affidavits, depositions, stipulations, or any other type of document containing facts tending to establish who (specifically) it planned to call or the m ateriality of that testimony." Heller Financial, Inc. v. Midwhey Powder Company, Inc., 883 F.2d 1286, 1293-94 (7th Cir. 1989). Defendants assert that key witnesses will include Y am azaki and the lawyers involved in plaintiff's patent prosecution: Ferguson, Eric

R obinson, Jeffrey Costellia, John Hayden, Scott Harris, Roberto Devoto and Joseph S tevenson . Although as previously explained, Wisconsin is more convenient for Yamazaki, all of the lawyers except for Harris and Stevenson reside in either Virginia or Washington, D .C. As plaintiff points out, defendants state definitively only that Yamazaki and Ferguson w ill be called as witnesses. With respect to the other patent lawyers, defendants state that "in e q u it a b le conduct will be a very important defense" and "access to these witnesses is
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particularly important." Dkt. #15, at 14. However, even if the lawyers' testimony is necessary, typically the location of such non-party witnesses is an important factor only w h en court compulsion is necessary to get such witnesses to testify. Milwaukee Electric Tool C orp . v. Black & Decker (N.A.) Inc., 392 F. Supp. 2d 1062, 1064 (W.D. Wis. 2005). Although defendants may prefer the in-court testimony of its witnesses, they fail to provide reaso n s why they cannot obtain deposition testimony in this patent suit, when "`in patent actions, depositions are customary and are satisfactory as a substitute for technical issues.'" Ad am s v. Newell Rubbermaind Inc., No. 07-C- 313-S, 2007 WL 5613420, at *3 (W.D. Wis. A ug. 21, 2007) (quoting Medi USA, L.P. v. Jobst Institute, Inc., 791 F. Supp. 208, 211 (N.D . Ill. 1992)). Further, all of the attorneys have agreed to be deposed and, if necessary, travel to the Western District of Wisconsin to testify. Under the circumstances in this suit, the convenience-to-witnesses factor favors neither side in the transfer analysis.

C. Interest of Justice T h e interest of justice includes such concerns as insuring speedy trials and trying related litigation together. Heller, 883 F.2d at 1293 (citing Coffey, 796 F.2d at 221). These in terests may be determinative in a particular case, even if the convenience of the parties and w i tn esses would suggest a different result. Coffey, 796 F.2d at 221. In this case, this factor is neutral. 10

D efendan ts' primary argument is that because the parties litigated similar technology an d patents in the Eastern District of Virginia, the interests of justice require transfer of this case to Virginia. They assert that Virginia will resolve this case just as fast as this court and that speed is not an important factor in this case because plaintiff does not practice its p a ten ts and has waited four years to assert the patents-in-suit. Although I agree that this court would not decide this case any faster than Virginia, I am not persuaded that the previo us litigation between the parties compels transfer. Defendants argue that even though SEL I occurred almost 11 years ago, Judge Ellis i s familiar with the parties and LCD technology at issue in this case. In support of their argum ent that the cases are sufficiently related, defendants cite the 2000 decision by the district court in SEL II to transfer the parties' case involving LCD technology to Virginia. H o w e ver, the threshhold issue in SEL II was whether plaintiff violated a stipulation and ord er entered by the District Court for the Eastern District of Virginia. Defendants also allege that plaintiff is attempting to circumvent Judge Ellis's invalidation of the `636 patent b y asserting several similar claims in the `463 patent. Even though both the `636 and `463 patents involve similar technology, the `636 patent has more specific limitations than the `463 patent. SEL I, 4 F. Supp. 2d at 478 ("It is the combination of the specific structure together with the low impurity levels that constitutes the invention.").

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Even if the inequitable conduct found in the previous case becomes relevant to the patents-in-suit, the fact that Virginia previously hosted litigation involving the same issues is of minimal import. Acer, Inc. v. Technology Properties Ltd., 2009 WL 279330, *2 (N.D. C a l. Feb. 4, 2009) (citing Micron Technology, Inc. v. Mosaid Technologies, Inc., 518 F.3d 8 9 7 , 905 (Fed. Cir. 2008) ("While the well-known patent forum of the Eastern District of T e xas has heard cases involving some of the same patents, the record does not show any on goin g litigation requiring consolidation.")); see also Furmanite America, Inc. v. Durango A sso ciates, Inc., 662 F. Supp. 348 (E.D. Va. 1986) (because parties entitled to de novo, im partial consideration, prior judicial experience is more negative than affirmative reason for transfer) (citing Codex Corp. v. Milgo Electronic Corporation, 553 F.2d 735, 739 (1st C ir. 1977)). Given that a completely different patent is at issue in this case, no related case is pending in Virginia, Judge Ellis has taken senior status and there is no guarantee that he even would be assigned or take the case, I find that the interest-of-justice factor does not w eigh in favor of transfer. Because defendants have failed to show that the Eastern District of Virginia is a clearly more convenient forum or that the interests of justice necessitate transfer to that district, defendants' motion to transfer venue will be denied.

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OR DER IT IS ORDERED that the motion of defendants Samsung Electronics Company, Ltd., S -L C D Corporation, Samsung Electronics America, Inc. and Samsung Telecommunications Am erica, LLC to transfer venue to the United States District Court for the Eastern District of Virginia, dkt. #15, is DENIED. Entered this 8t h day of June, 2009. B Y THE COURT: /s/ _ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ B AR B AR A B. CRABB D istrict Judge

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