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The Valspar Corp. v. PPG Industries, Inc.

United States District Court, D. Minnesota

November 3, 2016

The Valspar Corporation and Valspar Sourcing, Inc., Plaintiffs,
v.
PPG Industries, Inc., Defendant.

          Garret A. Leach, Adam M. Kaufmann, Elizabeth A. Cutri, Kirkland & Ellis LLP, Patrick S. Williams, Briggs & Morgan, PA, F. Andrew Ubel, III, The Valspar Corporation, Minneapolis, Minnesota 55440, for Plaintiffs.

          Celine J. Crowson, Joseph J. Raffetto, Hogan Lovells U.S. LLP, 555 Thirteenth Street Northwest, Washington, District of Columbia 20004, Lewis A. Remele, Jr., and Jeffrey D. Klobucar, Bassford Remele, PA, 33 South Sixth Street, Suite 3800, Minneapolis, Minnesota, 55402, for Defendant.

          MEMORANDUM OPINION AND ORDER

          SUSAN RICHARD NELSON, United States District Judge

         I. INTRODUCTION

         Plaintiffs The Valspar Corporation and Valspar Sourcing, Inc. (collectively, “Valspar”), brought this suit against PPG Industries, Inc. (“PPG”), alleging that PPG has infringed four of Valspar's patents. PPG now moves the Court to transfer this case to the United States District Court for the Western District of Pennsylvania, pursuant to its discretionary authority under 28 U.S.C. § 1404(a). For the reasons set forth below, Defendant's Motion [Doc. No. 33] is denied.

         II. BACKGROUND

         A. The Parties

         Valspar Corporation is a Delaware corporation with its principal place of business in Minneapolis, Minnesota. (Am. Compl. [Doc. No. 32] ¶ 1.) Valspar Sourcing, Inc. is a Minnesota corporation also having its principal place of business in Minneapolis. (Id. ¶ 2.) As relevant to the present litigation, Plaintiffs are, respectively, the exclusive licensee and owner of several patents relating to spray-applied bisphenol A (“BPA”)-free coatings used on food and beverage cans. (Pls.' Mem. in Opp. to Def.'s Mot. to Transfer [Doc. No. 41] (“Pls.' Mem. in Opp.”) at 3.) In addition to its offices in Minnesota, Valspar maintains substantial operations within the Western District of Pennsylvania, including a “regional headquarters, ” a manufacturing facility, and a laboratory. (Leggett Decl. [Doc. No. 36], Ex. 1.)

         PPG is a Pennsylvania corporation with its principal place of business in Pittsburgh, Pennsylvania. (Answer [Doc. No. 40] ¶ 3.) As relevant to the present litigation, PPG “makes, sells, offers for sale, and/or uses coating compositions for food and beverage cans.” (Id.). Like Valspar, products containing its coatings are sold nationwide. (Karalis Decl. ¶ 20.)

         B. The Underlying Dispute

         In its Amended Complaint, Valspar alleges that PPG's INNOVEL HPS (“INNOVEL”) product infringes on four patents held by Valspar (collectively, the “Asserted Patents”) that relate to the production of BPA-free can coatings. (See Am. Compl. ¶¶ 24, 51, 78, 105.) PPG describes INNOVEL as a “waterborne, polymeric spray lacquer that, among other things, can be used to coat the interior of beverage cans.” (Def.'s Mem. in Supp. of Mot. to Transfer Venue [Doc. No. 35] (“Def.'s Mem. in Supp.”) at 3.) Like Valspar's competing valPure product, it is BPA-free. (See Karalis Decl. [Doc. No. 43] ¶ 7.; Am. Compl., Ex. F.) As the parties acknowledge, the ability to coat cans with BPA-free substances has become particularly important in light of the recent addition of BPA to the list of chemicals “known to the state of California” to cause cancer or reproductive toxicity. (See Karalis Decl. ¶ 8.) This designation requires the placement of warning labels on products containing BPA after May 11, 2016. (Id.) After becoming aware that PPG was selling its INNOVEL coating in the United States, Valspar brought this action on May 23, 2016.[1] (See generally Compl. [Doc. No. 1].)

         C. PPG's Motion to Transfer

         PPG brought the present motion to transfer venue to the Western District of Pennsylvania on September 9, 2016. (See generally Motion to Transfer Venue.) While acknowledging that venue in this District is proper pursuant to statute, and that Valspar's status as a Minnesota domiciliary raises a presumption in favor of its choice of forum, PPG contends that the unique facts of this case weigh in favor of transfer to Pennsylvania for the convenience of the parties and in the interests of justice. (See id; Answer ¶¶ 6, 15.) In support of this contention, PPG argues that “[t]his case will focus on (1) the technical details of the accused product [INNOVEL]; (2) the technical details of the coating compositions claimed in the asserted patents; and (3) the technical details of the prior art coating compositions that PPG developed in the mid-1990s that render the asserted patents invalid.” (Def.'s Reply Mem. in Supp. of Mot. to Transfer [Doc. No. 47] (“Def.'s Reply Mem. in Supp.”) at 1.) According to PPG, the relevant facts, witnesses, and documents associated with each of these three case elements are “overwhelming[ly]” located in the Western District of Pennsylvania. (Id. at 1, 3) Specifically, it notes that “[t]he alleged development of Valspar's claimed coating compositions occurred in Valspar's packaging coating laboratory in Pittsburgh, Pennsylvania. Four of the five inventors named on the asserted patents reside in the Western District of Pennsylvania, and . . . INNOVEL[, along with the prior art coatings, ] was designed and developed by PPG scientists in . . . the Pittsburgh area.” (Id. at 1-2.) PPG further identifies ten third-party witnesses “that either reside in the Western District of Pennsylvania or for whom the Western District of Pennsylvania is a more convenient forum, ” who it argues will be “essential” to the case. (Id. at 13.) In contrast to this cornucopia of contacts with Pennsylvania, PPG contends that the only truly relevant connection to Minnesota that Valspar can point to is that its headquarters are located there. (Def.'s Mem. in Supp. at 2.)

         In response, Valspar highlights not only its status as a Minnesota domiciliary, but also what it claims are several flaws in PPG's analysis of the relevant contacts. Among other arguments discussed at greater length below, Valspar contends that PPG errs in: (1) assuming that the “operative facts” of this patent infringement case center on Pennsylvania; (2) that its identified third-party witnesses located in Pennsylvania are actually essential and non-cumulative; and (3) that no relevant third-party witnesses are located either in Minnesota or in a location closer to Minnesota than Pennsylvania. (See Pls.' Mem. in Opp. at 7-9, 19-20, 21.) On the whole, Valspar notes that the party seeking transfer under 28 U.S.C. § 1404(a) bears a “heavy burden” of demonstrating that the facts ...


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