JLG Industries, Inc. v. Mark Industries

684 F. Supp. 1283, 8 U.S.P.Q. 2d (BNA) 1697, 1988 U.S. Dist. LEXIS 4003, 1988 WL 44563
CourtDistrict Court, M.D. Pennsylvania
DecidedMay 6, 1988
DocketCiv. A. No. 87-1653
StatusPublished
Cited by1 cases

This text of 684 F. Supp. 1283 (JLG Industries, Inc. v. Mark Industries) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
JLG Industries, Inc. v. Mark Industries, 684 F. Supp. 1283, 8 U.S.P.Q. 2d (BNA) 1697, 1988 U.S. Dist. LEXIS 4003, 1988 WL 44563 (M.D. Pa. 1988).

Opinion

MEMORANDUM

RAMBO, District Judge.

Before the court is the motion of defendant to dismiss or transfer this action on the basis of improper venue. Also before the court is plaintiff’s motion to enjoin defendant from initiating or further prosecuting patent infringement actions against customers of plaintiff. The motions have been fully briefed and are ripe for disposition.1 The following recitation of facts is based on undisputed assertions of fact contained in the affidavits, exhibits, and briefs which accompany the parties’ motions.

Background

Both plaintiff and defendant manufacture and sell aerial work platforms. Plaintiff is a Pennsylvania corporation, having its principal place of business in Pennsylvania. Defendant is a California corporation, with its principal place of business in that state. Defendant has one distributor, known as Forklifts, Inc., located in the Middle District of Pennsylvania. Defendant has no representative, no office, no employee, no telephone number, and no bank account in this district. According to the affidavit of defendant’s vice-president of finance, the extent to which defendant does business or advertises in this district is no greater than the extent to which defendant engages in those activities nationwide.

With respect to at least one of its products, a self-propelled and extensible boom, defendant owns a patent. On November 17,1980 an attorney for defendant wrote to plaintiff advising plaintiff that one of plaintiff’s products appeared to be infringing defendant’s patent. Counsel for defendant again wrote to plaintiff on May 8, 1986 and offered to plaintiff a license under the patent that was the subject of the 1980 letter. Counsel also informed plaintiff that defendant had been successful in litigation concerning the validity of certain claims in the patent. Plaintiff apparently did not accept defendant’s license offer.

In September, 1987 defendant initiated a patent infringement action against Mobile Scaffolding Management and Sales, Inc., a customer of plaintiff. The action was brought in the United States District Court for the Central District of California. Defendant alleged that certain equipment which was sold, rented, or used by Mobile and manufactured by plaintiff violated defendant’s patent. Although plaintiff in the case at bar is not a party in the California action, plaintiff is handling Mobile’s defense in that action. The California action is currently pending.

On November 23, 1987 plaintiff brought the instant action in this court, seeking in part a declaration that defendant’s patent is invalid or that equipment manufactured [1285]*1285by plaintiff does not infringe defendant’s patent. According to plaintiff, the basis for this court’s jurisdiction over plaintiff’s claim is the Declaratory Judgments Act, 28 U.S.C. §§ 2201-2202, and federal law concerning patents. Plaintiff further asserts that venue is proper here on the grounds that defendant does business in this district. Discovery in this case and in the California action has proceeded concurrently-

Pursuant to Fed.R.Civ.P. 12(b)(3), defendant moves to dismiss or transfer the case at bar on the basis of the argument that venue is improper in the Middle District of Pennsylvania. Plaintiff, of course, argues that venue is proper here and that the declaratory judgment action before this court should be accorded priority over the California action. Thus, plaintiff asks this court to stay litigation in the California action. Further, plaintiff seeks an injunction preventing defendant from bringing any more actions against plaintiff’s customers.

In disposing of the parties’ motions it is necessary for the court to address only the issue of whether venue is proper in the Middle District of Pennsylvania for the declaratory judgment action brought by plaintiff.

Discussion

“Venue in a declaratory judgment action for patent invalidity and noninfringement is governed by the general venue statute, 28 U.S.C. § 1391, [footnote omitted] rather than the patent infringement venue statute, 28 U.S.C. § 1400.” Conaway Enterprises, Inc. v. Dyna Industries, Inc., 547 F.Supp. 577, 579 (W.D.Pa.1982). The general venue statute provides, in part, as follows:

(b) A civil action wherein jurisdiction is not founded solely on diversity of citizenship may be brought only in the judicial district where all defendants reside, or in which the claim arose, except as otherwise provided by law.
(c) A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes.

28 U.S.C. § 1391(b), (c).

Although plaintiff in its complaint relies only on subsection (c) of § 1391 for its allegation that venue is proper here, plaintiff also argues in response to defendant’s motion that venue is proper pursuant to subsection (b). Thus, the court will determine whether venue is proper under either of the two subsections. In making its determination, the court bears in mind the principle that “[ojnce venue has been challenged, it is incumbent upon the Plaintiff to establish that venue is proper.” Conaway Enterprises, 547 F.Supp. at 579.

A. § 1391(b)

The question of whether defendant resides in this district for venue purposes will be addressed in the discussion of subsection (c). The court will focus its discussion of subsection (b) solely on plaintiff’s argument that its claim arose in this district. The controlling case on the question of where a claim arose for venue purposes is Leroy v. Great Western United Corp., 443 U.S. 173, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979).

The Leroy case involved a Texas corporation which sought to acquire shares of an Idaho corporation. Upon receiving a letter at its offices in Texas from an Idaho state official objecting to its attempted compliance with Idaho statutes in the matter, the Texas corporation brought suit in a federal court in Texas asking, in part, that the Idaho statute be declared invalid. The Idaho defendants challenged venue in the Texas district court, and the Supreme Court ultimately agreed with the Idaho defendants that venue was not properly laid in Texas. In reaching that conclusion the Court announced several principles regarding § 1391(b) venue which are helpful in the case at bar.

In the first place the Court found that “[i]n most instances, the purpose of statutorily specified venue is to protect the defendant against the risk that a plaintiff will select an unfair or inconvenient place of trial, [footnote omitted] For that rea[1286]*1286son, Congress has generally not made the residence of the plaintiff a basis for venue in nondiversity cases.” Id.

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684 F. Supp. 1283, 8 U.S.P.Q. 2d (BNA) 1697, 1988 U.S. Dist. LEXIS 4003, 1988 WL 44563, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jlg-industries-inc-v-mark-industries-pamd-1988.