The IP Litigation Team at Fried Frank is continuously tracking the impact of TC Heartland. Below, we provide a roundup of the latest orders and opinions concerning venue-related issues in patent infringement cases.
Meaning of “Regular and Established Place of Business”
In Reflection, LLC v. Spire Collective LLC, No. 3:17-cv-01603 (S.D. Cal. Jan. 5, 2018), the court granted the defendant’s motion to dismiss for improper venue, finding that Amazon’s Fulfillment Center in the district was not a “regular and established place of business” of the defendants because the defendant did not control the fulfillment centers where its products are stored. Rather, Amazon controlled the fulfillment centers and decided where to store the goods. After finding venue to be improper, the court dismissed the case because neither party had requested a transfer or designated a more appropriate forum. The court also found that the plaintiff would not be severely prejudiced by dismissal given the early stage of the litigation.
In Parkervision, Inc. v Apple Inc., No. 3:15-cv-1477 (M.D. Fla. Jan. 9, 2018), the magistrate judge recommended that both defendant Apple and defendant Qualcomm’s motions to dismiss for improper venue be denied. The magistrate found that venue was proper with respect to Apple given that the company has “9 retail stores and 2 non-retail leased facilities” in the district. The magistrate noted that venue was a “closer question” with respect to Qualcomm. In particular, Qualcomm had two “regular and established” offices in the district, but both offices were closed a few weeks before the plaintiff filed the complaint. The magistrate, however, decided to test venue for Qualcomm as of “when the causes of action accrued” (when the offices were still open), rather than as of the filing of the complaint.
In Automated Packaging Systems, Inc. v. Fre Flow Packaging International, Inc., No. 5:14-cv-2022 (N.D. Ohio Jan. 12, 2018), the court granted the defendant’s motion to dismiss for improper venue, transferring the case to the Northern District of California. The court found that the defendant had not waived its venue defense where the case had been stayed for years, had not progressed past briefing on claim construction, the defendant had moved to transfer within one month of TC Heartland, and the defendant had not strategically delayed its motion. Also, even though the defendant had previously made three admissions that venue was proper, they were made before TC Heartland and thus, “it [made] no difference whether [the defendant] remained silent or affirmatively conceded that venue was proper . . . .” After determining that the defendant had not waived its venue defense, the court analyzed whether the defendant had a “regular and established place of business” in the district. The court found that it did not because none of the employees living in the district kept inventory for sale in their homes, and the defendant had not otherwise rented, leased, owned, or controlled any buildings in the district. The court also dismissed the plaintiff’s “rather creative argument” that the defendant’s business model created “regular and established places of business” because it had supplied its end use customers with equipment to be used at the customers’ facilities. The court found this fact insufficient to establish the customers’ facilities as “places” of the defendant under In re Cray.
Meaning of “Acts of Infringement”
In RAH Color Technologies, LLC v. Quad/Graphics, Inc., No. 1:17-cv-04931 (N.D. Ill. Jan. 16, 2018), the court denied the defendant’s motion to dismiss for improper venue. The defendant argued that it had not committed “acts of infringement” in Illinois as required under Section 1400(b) because defendant’s Illinois facilities do not use the software accused of infringement. The plaintiff responded by citing evidence from the defendant’s interrogatory responses and deposition testimony. The court denied the defendant’s motion, noting that factual conflicts on a motion under Rule 12(b) must be resolved in the favor of the plaintiff.
Waiver of Objection to Venue
In Steuben Foods, Inc. v. Shibuya Hoppmann Corp., No. 1:10-cv-00781 (W.D.N.Y. Jan. 16, 2018), the magistrate judge recommended that the defendants’ renewed motion to dismiss or transfer due to improper venue be denied. The magistrate had previously the denied defendants’ improper venue motion before In re Micron was decided (see our analysis here), and denied it again because the case had been pending for over seven years and a claim construction hearing was set to begin imminently. The court determined that it had the “inherent power to control its docket,” and although the court recommended denial, it did so without prejudice, indicating that the defendants could bring their motion again upon completion of claim construction.
In Agr Labs Holding LLC v. Taplogic, LLC, No. 1:15-cv-26 (N.D. Ind. Jan. 16, 2017), the court denied the defendant’s motion to dismiss for improper venue. Defendant filed the motion one month after TC Heartland and concurrently with a motion for summary judgment. The court found that the motion was “not timely given the circumstances of the case,” which included the fact that the case had been pending for three years, that the venue objection had been filed concurrently with the summary judgment motion (in violation of the local rules), and that “significant judicial resources [had] already been expended.”