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Interlink Products International, Inc. v. Fan Fi International, Inc.

United States District Court, D. New Jersey

April 7, 2017

INTERLINK PRODUCTS INTERNATIONAL, INC., Plaintiff,
v.
FAN FI INTERNATIONAL, INC. and ETL, LLC, Defendants.

          OPINION AND ORDER

          Hon. Leda Dunn Wettre United States Magistrate Judge.

         Before the Court is the motion of Defendants, Fan Fi International, Inc. ("Fan Fi") and ETL, LLC ("ETL"), to transfer this consolidated action to the United States District Court for the District of Nevada, pursuant to 28 U.S.C. § 1404(a). (ECF No. 45). Plaintiff, Interlink Products International, Inc., filed an opposition to this motion (ECF No. 50), and Defendants filed reply papers (ECF No. 54). The Court having considered these filings, and for the reasons set forth below, Defendants' transfer motion is DENIED.

         I. UNDERLYING FACTS AND PROCEDURAL HISTORY

         Plaintiff manufactures and sells shower and bath parts, among other things. (Am. Compl., ECF No. 14, ¶¶ 7-8). It holds United States Letters Patent No. 7, 299, 510 ("the '510 Patent"), a patent for a dual showerhead diverter system. (Id. ¶¶ 15-16 & Ex. B). Plaintiff claims that Defendants sell within the United States dual showerheads with diverter devices that infringe the '510 Patent. (Id. ¶¶ 14, 17-26).

         Plaintiff commenced this action on February 29, 2016, alleging infringement of the '501 Patent by Fan Fi. (Compl., ECF No. 1). Plaintiff filed a First Amended Complaint on June 23, 2016, which added ETL as a defendant. (ECF No. 14). Defendants asserted counterclaims for declarations of patent invalidity and non-infringement in their Answer. (Answer, ECF No. 24).

         Not long after filing this action, Plaintiff filed another action in this Court against the same Defendants, alleging trademark infringement and unfair competition. Interlink Prods. Int'l, Inc. v. Fan Fi Int'l, Inc., Civ. A. No. 16-1244 (WHW) (CLW) (D.NJ.). The Complaint in that action alleges that Fan Fi sells showerheads in the United States under the trademark "POWERSPA" and that this mark infringes Plaintiffs usage of the mark "POWER SPA, " registered as Trademark No. 4137909. Interlink Prods. Int'l, Civ. A. No. 16-1244, Compl., ECF No. l, ¶¶7-23. Plaintiff added ETL as a defendant to that action on June 23, 2016. Interlink Prods. Int'l, Civ. A. No. 16-1244, Am. Compl., ECF No. 13. Defendants' Answer in that action asserts counterclaims for a declaration of non-infringement and for cancelation of Plaintiff s trademark. Interlink Prods. Int 7, Civ. A. No. 16-1244, Answer, ECF No. 23.

         In August 2016, Plaintiff filed a third action in this Court against Defendants, alleging claims for false advertising in violation of the Lanham Act, as well as for violations of state unfair competition law, deceptive trade practices laws, and false advertising laws. Interlink Prods. Int'l, Inc. v. Fan Fi Int'l, Inc., Civ. A. No. 16-4663 (WHW) (CLW) (D.N.J.), Compl., ECF No. 1. The Complaint in that action contends that Defendants falsely claim that their showerheads use patented technology to create a uniquely strong spray. Interlink Prods. Int'l, Civ. A. No. 16-4663, Compl., ECF No. 1.

         On September 28, 2016, U.S. District Judge Madeline Cox Arleo issued an order consolidating the three actions under this docket number, without prejudice to the parties' rights to seek deconsolidation following the completion of discovery. (ECF No. 40).

         II. MOTION AND ANALYSIS

         A. The Parties' Arguments

         Defendants now move to transfer this consolidated action to the United States District Court for the District of Nevada pursuant to 28 U.S.C. § 1404(a). (ECF No. 45). Defendants allege that they have no formal operations or business relationships in New Jersey and that they ship only 1% of their showerheads to New Jersey. (Mem. of Law, ECF No. 46, ¶¶ 8-10). They stress that their headquarters is located in Reno, Nevada, and that all research, design, development, and marketing decisions, as well as the bulk of distribution, take place in their Nevada facilities. (Id. ¶¶ 6, 11-19). Defendants urge that keeping this litigation in the District of New Jersey would unduly burden them, and they note that they filed an action for false advertising against Plaintiff in the District of Nevada in November 2016. (Id. ¶¶ 31-32).

         Defendants contend that the action's "center of gravity" lies in Nevada, given that the bulk of Defendants' acts underlying Plaintiffs claims occurred in Nevada and that most witnesses and documents pertinent to the case are located there. (Id. ¶¶ 20-30 & pp. 7-9, 10-11). Defendants posit that courts frequently transfer intellectual property actions to the home district of the defendant for these reasons. (Id. at 9). Acknowledging the deference typically owed to a plaintiffs choice of forum, Defendants assert that a plaintiffs filing of an action in a foreign district or in a district not central to the facts is "disqualifying" of such deference. (Reply Br., ECF No. 54, at 3 n.1). Defendants argue that permitting the case to remain in this district based on a small number of sales here would effectively nullify 28 U.S.C. § 1404(a). (Id. at 7). They dispute Plaintiffs position that a transfer would simply shift the burden of litigation from Defendants to Plaintiff, contending that most discovery will occur in Nevada and little unique discovery related to Plaintiffs claim would be found within New Jersey. (Id. at 10).

         Defendants further argue that a judgment would be more easily enforced in Nevada and that the convenience of resolving all of the claims between Plaintiff and Defendants should outweigh any convenience gained by leaving the matter before this Court, where Plaintiff has other similar actions pending against other defendants. (Id. at 12-13). Defendants contend that courts typically have no public interest in retaining patent cases, given the national scope of such actions. (Id. at 12).

         In opposition, Plaintiff argues that a plaintiffs choice of forum generally should receive deference, particularly when it is the plaintiffs home district, and it contends that transfer should not be granted where it would simply shift the burden of litigation from the defendant to the plaintiff. (Br. in Opp'n, ECF No. 50, at 7-8). Plaintiff asserts that design, development, and testing of Defendants' products could relate only to the patent claim, and not to the trademark or false advertising claims. (Id. at 11). In any event, Plaintiff argues that Defendants' product design and development do not in fact relate to the patent claim, as they assert that Defendants simply purchased the allegedly infringing diverter device from a supplier, and thus infringement occurred primarily through the product distribution and sales. (Id. at ...


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