Siemens Aktiengesellschaft v. Sonotone Corporation

370 F. Supp. 970, 18 Fed. R. Serv. 2d 463, 179 U.S.P.Q. (BNA) 647, 1973 U.S. Dist. LEXIS 12641
CourtDistrict Court, N.D. Illinois
DecidedJuly 18, 1973
Docket73 C 296
StatusPublished
Cited by13 cases

This text of 370 F. Supp. 970 (Siemens Aktiengesellschaft v. Sonotone Corporation) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Siemens Aktiengesellschaft v. Sonotone Corporation, 370 F. Supp. 970, 18 Fed. R. Serv. 2d 463, 179 U.S.P.Q. (BNA) 647, 1973 U.S. Dist. LEXIS 12641 (N.D. Ill. 1973).

Opinion

MEMORANDUM OPINION

DECKER, District Judge.

This is a patent infringement action by Siemens Aktiengesellschaft (Siemens) against Sonotone Corporation (Sonotone) and Beltone Electronics Corporation (Beltone), manufacturers of allegedly infringing hearing aid devices, and Sonotone Corporation of Chicago (Sonotone Chicago), a distributor of hearing aids. Defendants Sonotone and Sonotone Chicago have moved for severance of the complaint against them and, pursuant to 28 U.S.C. § 1404(a), an order transferring the venue of this action as to those defendants to the United States District Court for the Southern District of New York.

*972 By its terms, Section 1404(a) allows for transfer only to a district in which the action “might have been brought.” ■ Although Sonotone Chicago has joined in the motion for severance and transfer, the phrase in Section 1404(a) “where it might have been brought” cannot be interpreted to mean “where it may now be rebrought, with defendants’ consent,” Hoffman v. Blaski, 363 U.S. 335, 343, 80 S.Ct. 1084, 1089, 4 L.Ed.2d 1254 (1960); transfer under this statute does not depend upon the “wish or waiver of the defendant.” Hoffman v. Blaski, supra. The situation when the suit was instituted is the sole relevant factor. At that time, this action could not have been brought against Sonotone Chicago in the proposed transferee district because it has neither resided nor maintained a regular and established place of business in that jurisdiction. 1 This court, therefore, is without power to transfer the action as to Sonotone Chicago to New York.

This does not mean, however, that transfer as to the defendant Sonotone would be improper. Courts have authorized severance and transfer of claims as to less than all defendants in a multi-defendant suit upon a determination that the defendant as to whom venue is improper in the transferee district is only peripherally involved in the litigation. Wyndham Associates v. Bintliff, 398 F. 2d 614 (2d Cir.), cert. denied, 393 U.S. 977, 89 S.Ct. 444, 21 L.Ed.2d 438 (1968); Mobile Oil Corp. v. W. R. Grace & Co., 334 F.Supp. 117 (S.D.Texas 1971); Burroughs Corp. v. Newark Electronics Corp., 317 F.Supp. 191 (N. D.Ill.1970); General Elec. Credit Corp. v. James Talcott, Inc., 271 F.Supp. 699 (S.D.N.Y.1966); Leesona Corp. v. Cotwool Mfg. Corp., Judson Mills Div., 204 F.Supp. 139 (W.D.S.Car.), appeal dismissed, 308 F.2d 895 (4th Cir. 1962). Although some courts apparently refuse to transfer in multiple defendant cases unless all the defendants can be transferred, see, e. g., Leyden v. Excello Corp., 188 F.Supp. 396, 397 (D.N.J. 1960); Anschell v. Sackheim, 145 F. Supp. 447 (D.N.J.1956), this court has previously adopted the former view. Burroughs Corp. v. Newark Electronics Corp., supra. Were the rule otherwise, “a plaintiff could preclude the court from considering whether transfer would serve the interest of justice by including a defendant, not subject to suit in the more convenient district, who was in some manner peripherally involved in the alleged wrongdoing.” Wyndham Associates v. Bintliff, supra, 398 F.2d at 619, quoted in Burroughs Corp. v. Newark Electronics Corp., supra, 317 F. Supp. at 193.

The question thus arises whether defendant Sonotone Chicago is only secondarily involved in the subject matter of this suit. Sonotone Chicago, a proprietorship, is an independent retail distributor of hearing aids and was apparently included in this suit because it purchases and resells the allegedly infringing products of Sonotone. Sonotone Chicago does not manufacture hearing aids and has a servicing capability limited to minor repairs, such as cleaning dirty contacts and fixing bad connections; any problems which require rebuilding or replacement of Sonotone hearing aids are referred to New York. The distributor in no way participates in the manufacture of the allegedly infringing devices and could only be liable if Sonotone is found to be infringing plaintiff’s patent. Moreover, Sonotone Chicago also markets hearing devices of other companies, including Siemens. Thus, as between Sonotone and Sonotone Chicago, the real party in interest is Sonotone. Burroughs Corp. v. Newark Electronics Corp., supra; Leesona Corp. v. Cotwool Mfg. Corp., Judson Mills Div., supra; Bar’s Leaks Western v. Pollock, 148 F.Supp. 710 (N.D.Cal.1957).

*973 The remaining question is whether transfer would be “ [for] the convenience of parties and witnesses, [and] the interest of justice.” In considering these three - factors, “ [i]t is well established that a plaintiff’s choice of forum ‘should not lightly be set aside,’ Dairy Industries Supply Association v. LaBuy, 207 F.2d 554, 558 (7th Cir. 1953), and that defendant must make a clear showing that the balance of convenience weighs in its favor, Butterick Company v. Will, 316 F.2d 111, 112 (7th Cir. 1963).” Burroughs Corp. v. Newark Electronics Corp., supra, 317 F.Supp. at 193. The affidavits and other papers in this suit demonstrate that transfer of the action as to Sonotone would be proper under Section 1404(a).

Sonotone is a New York corporation and has its only office and place of business in that state. It is a wholly-owned subsidiary of Gould, Inc., a Delaware corporation which has its executive and principal place of business in Chicago. There is some overlap between the officers and directors of Sonotone and Gould, to the extent that all of Sono-tone’s directors and principal officers are located in Chicago. In addition, the financial status of Sonotone is incorporated in a consolidated financial statement of Gould; Sonotone has no separate financial statement. Although the foregoing contacts of Sonotone might otherwise support retention of the suit in this court, they are considerably outweighed by more significant factors. All documents with respect to Sonotone’s design, manufacture, distribution, and advertising of the products involved and apparatus used in connection with the manufacture of the deyiees are located in New York. At trial, Sonotone intends to rely upon testimony of officers and employees who work and reside in New York; the witnesses will also respond to any demands for discovery. To require these witnesses to travel to this district would take them away from their families and work for an extended period and would cause Sonotone considerable transportation and housing expense. The expert witnesses which Sonotone expects to call are also located in New York. The directors and officers who work or reside in Chicago are not expected to be called by this defendant at trial and have visited Sonotone in New York only occasionally or not at all, and have little or no knowledge of the facts and issues involved in this suit. Thus, all Sonotone documents and personnel with any significant relation to the present action are located in New York.

The defendant Beltone is an Illinois corporation with its principal place of business in Chicago.

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Bluebook (online)
370 F. Supp. 970, 18 Fed. R. Serv. 2d 463, 179 U.S.P.Q. (BNA) 647, 1973 U.S. Dist. LEXIS 12641, Counsel Stack Legal Research, https://law.counselstack.com/opinion/siemens-aktiengesellschaft-v-sonotone-corporation-ilnd-1973.