IP Law Daily, PATENT—E.D. Mich.: Change of venue unwarranted in patent dispute over design of toy loom, (Nov 5, 2013)

By Mark Engstrom, J.D.

In a patent infringement action involving the design of a toy loom that used colored rubber bands to create bracelets and other jewelry, defendants LaRose Industries and Toys “R” Us could not transfer to the District of New Jersey a suit that Choon’s Design had filed in the Eastern District of Michigan, the federal district court in Detroit has ruled (Choon’s Design, LLC v. LaRose Industries, LLC, November 1, 2013, Berg, T.). The defendants’ motion to transfer venue under 28 U.S.C. §1404(a) was denied.

Background. Choon’s Design invented and patented the “Rainbow Loom” and sold it though specialty toy and craft stores. LaRose created a competing product, the “cra-Z-loom,” and sold it through Toys “R” Us. Choon’s filed patent infringement claims in the Eastern District of Michigan and the defendants sought a transfer of venue to the District of New Jersey.

In determining whether to transfer the case under §1404(a), the court first had to find that the action could have been brought in the District of New Jersey. If the court decided that it could have, the court considered two additional factors: (1) the convenience of the parties and witnesses and (2) the interest of justice. The court noted that the defendants had to demonstrate, by a preponderance of the evidence, that a venue change was warranted. Although the court could consider the chosen forum of Choon’s, a plaintiff’s choice of forum was “no longer as dominant a factor” in a §1404(a) venue analysis.

Filing in New Jersey. Choon’s conceded that it could have filed its patent infringement action in New Jersey. The threshold requirement was therefore met.

Convenience. If the case were transferred to New Jersey, litigation would be more convenient for the defendants and their witnesses, the court observed. A New Jersey forum, however, would create an inconvenience for Choon’s and its witnesses. In the court’s view, witnesses from both sides would suffer a “roughly equal” inconvenience from litigating the case in the forum that was chosen by the opposing party. Accordingly, the convenience factor did not heavily favor either party.

Interests of justice. The defendants argued that the interests of justice favored a transfer to New Jersey because LaRose had filed an action against Choon’s—for a declaratory judgment of non-infringement—and that action was pending in New Jersey.

The mere fact that LaRose had filed an action in the District of New Jersey—after Choon’s had filed its lawsuit in the Eastern District of Michigan—did not tip the interests of justice in the defendants’ favor, the court explained. The court acknowledged that LaRose had also filed a tortious interference claim in the New Jersey Action, but nothing prevented LaRose from asserting that cause of action as counterclaim in this case, or from continuing to pursue the tortious interference claim in New Jersey.

Balancing the factors. Transferring the case to New Jersey would shift the inconvenience of litigation from the defendants to the plaintiff, the court observed. That shift, however, was insufficient, by itself, to show that a change in venue was warranted. Ultimately, Choon’s chose a forum to which it was strongly connected and the convenience analysis did not tip heavily in favor of either party. Accordingly, the defendants failed to meet their burden of showing that fairness and practicality favored litigation in the District of New Jersey.

The case is No. 13-13569.

Attorneys: Brian S. Tobin (Carlson, Gaskey & Olds, P.C.) for Choon’s Design, LLC. Kathleen A. Lang (Dickinson Wright) for LaRose Industries, LLC and Toys R Us, Inc.

Companies: Choon’s Design, LLC; LaRose Industries, LLC; Toys “R” US, LLC

Cases: Patent MichiganNews