JOEL A. PISANO, United States Magistrate Judge:
Presently before the Court is the motion of defendants Eli Lilly and Company and Shionogi & Co., Ltd. to transfer venue to the Southern District of Indiana pursuant to 28 U.S.C. § 1404(a). Opposition was filed by plaintiffs American Cyanamid Company and American Home Products Corporation. The Court heard oral argument on September 11, 1995. For the reasons stated herein, defendants' motion to transfer is granted.
Plaintiff American Cyanamid Company ("Cyanamid") is a Maine corporation with its principal place of business in Wayne, New Jersey and is a wholly owned subsidiary of plaintiff American Home Products Company ("AHP"). AHP is a Delaware corporation with its principal place of business in Madison, New Jersey. Defendant Eli Lilly & Company ("Lilly") is an Indiana corporation with its principal place of business in Indianapolis, Indiana. Defendant Shionogi & Company ("Shionogi") is a Japanese corporation with its principal place of business in Japan.
This action centers on several patents involving a broad-spectrum oral antibiotic known as cefaclor. Lilly obtained the U.S. patent on the cefaclor compound in 1975 as the assignee of the inventor, Robert R. Chauvette, a Lilly scientist (U.S. Patent No. 3,925,372). Subsequently Lilly obtained the U.S. patents on the nucleus of the cefaclor molecule, also through an assignment by Chauvette (U.S. Patent Nos. 3,917,587 and 4,064,343). Lilly has marketed cefaclor under the brand name "CECLOR" since 1979, and the product is currently one of the largest selling antibiotics in the United States.
Lilly's patents on the cefaclor compound expired on December 8, 1992. In addition to these two patents, Lilly obtained several patents describing different aspects of the processes for making cefaclor. Lilly has utilized these processes in its manufacture of cefaclor since obtaining them in the 1970s. By the end of 1994, all of these patents similarly had expired.
The patents at issue in this case involve a process for making cefaclor that is distinct from that utilized by Lilly in its years of manufacturing CECLOR (U.S. Patent Nos. 4,160,085 and 4,346,218). Shionogi held the patent rights to this process until Lilly purchased them on April 27, 1994. Despite their ownership of the patent rights, neither Lilly nor Shionogi has ever utilized this process to manufacture cefaclor for commercial sale in the United States or anywhere else. These patents will expire on July 3, 1996.
Immediately after acquiring the cefaclor process patents ("Shionogi/Lilly patents") from Shionogi, Lilly filed an action in the Southern District of Indiana against three New Jersey drug companies--Cyanamid, Zenith Laboratories, Inc. ("Zenith"), and Biocraft Laboratories, Inc. ("Biocraft")--and an Italian drug company--Biochimica Opos, S.p.A. ("Opos"). Lilly brought the action against the New Jersey defendants in connection with their importation and sale of cefaclor. Following the expiration of the original Lilly cefaclor patents, Zenith and Cyanamid obtained Food and Drug Administration ("FDA") approval to sell cefaclor in the United States, and both currently do so. Biocraft is awaiting FDA approval to manufacture and sell cefaclor domestically. Opos manufactures cefaclor in Italy and is the supplier of the cefaclor sold by Zenith and Cyanamid.
Lilly's Indiana suit seeks a declaratory judgment that the drug companies' importation of cefaclor manufactured by Opos infringes the Shionogi/Lilly patents. Conversely, Cyanamid's and AHP's New Jersey action seeks a declaratory judgment of non-infringement and unenforceability of the Shionogi/Lilly patents. Plaintiffs here also seek injunctive relief barring Lilly and Shionogi from asserting their patent rights against Cyanamid, AHP, or their suppliers and customers. Finally, the complaint asserts claims of unfair competition, tortious interference with contract, and common law conspiracy to engage in tortious conduct. Plaintiffs Cyanamid and AHP assert identical claims in this action and in their counterclaims against Lilly in the Indiana suit.
The defendants in the Indiana action moved the district court there to transfer venue to the District of New Jersey. On July 11, 1995, Chief Judge Barker of the Southern District of Indiana denied defendants' motion to transfer Lilly's suit to this district. Lilly and Shionogi now move this Court to transfer the New Jersey action to the Southern District of Indiana.
Defendants' motion requests that the Court transfer this action to the Southern District of Indiana pursuant to 28 U.S.C. § 1404(a) which provides that
For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
28 U.S.C. § 1404(a). The party seeking a transfer under Section 1404(a) bears the burden of proving the propriety of the transfer. Lony v. E.I. DuPont de Nemours & Co., 886 F.2d 628, 633 (3d Cir. 1989); Myers v. American Dental Ass'n, 695 F.2d 716, 724 (3d Cir. 1982). Thus, Lilly and Shionogi undertake the burden to meet this test. See Lony, 886 F.2d at 633.
A court may transfer an action "only if the plaintiff had an unqualified right to bring the action in the transferee forum at the time of the commencement of the action." Shutte v. Armco Steel Corp., 431 F.2d 22, 24 (3d Cir. 1970), cert. denied, 401 U.S. 910, 27 L. Ed. 2d 808, 91 S. Ct. 871 (1971). See 28 U.S.C. § 1404(a). Thus, the Court first will address whether this action could have been brought in the Southern District of Indiana.
This is a patent suit arising out of the laws of the United States, and subject matter jurisdiction is premised on 28 U.S.C. §§ 1331, 1338, and 2201-02. As such, 28 U.S.C. § 1391(b) and (c) is controlling to determine where venue is proper.
Section 1391(b) provides in pertinent part:
A civil action wherein jurisdiction is not founded solely on diversity of citizenship may . . . be brought only in 1) a judicial district where any defendant resides, if all defendants reside in the same State, 2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred . . . or 3) a judicial district in which any defendant may be found, if there is no judicial district in which the action may otherwise be brought.