The IP Litigation Team at Fried Frank is continuously tracking the impact of TC Heartland. Every week, we provide a roundup of the courts’ latest orders and opinions concerning venue-related issues in patent infringement cases.
Meaning of “Regular and Established Place of Business”
In Mallinckrodt IP v. B. Braun Medical Inc., 17-cv-00365 (D. Del. Dec. 14, 2017), the court denied defendant’s motion to dismiss for improper patent venue. The court reasoned that the “place” of a corporate affiliate or subsidiary could be considered the “place” of the parent company in at least some circumstances, such as where there is no formal corporate separateness between parent and subsidiary companies. The court therefore ordered venue-related discovery to determine the relationship between the defendant and its Delaware-based subsidiaries.
In Hand Held Products, et al. v. Code Corp., 17-cv-00820 (D. Utah Dec. 8, 2017), the plaintiff asked the court to transfer the case back to the District of South Carolina, where the case was originally filed. The plaintiff argued that the court in South Carolina had erred in granting defendant’s motion to transfer for improper venue. The Utah court disagreed, finding that the defendant did not have a “regular and established place of business” in South Carolina to justify venue in that jurisdiction. In so holding, the court relied on defendant’s sworn evidence that: (1) it does not own or lease real property in South Carolina; (2) maintains no offices, facilities, or distribution centers there; (3) it is not licensed to do business in South Carolina; (4) its South Carolina sales representative does not reside there; and (5) it has only one employee in South Carolina who works from home and does not maintain inventory.
In Plexxikon Inc. v. Novartis Pharmaceuticals Corp., 17-cv-04405 (N.D. Cal. Dec. 7, 2017), the court denied defendant’s motion to transfer for improper venue. The court found that defendant had a “regular and established place of business” in the district under the three-part test set forth in In re Cray. 1 In particular, the court held that venue was proper because defendant leases and operates a manufacturing facility and research facility in the Northern District of California.
In Westech Aerosol Corp. v. 3M Co., et al., 17-cv-05067 (W.D. Wash. Dec. 6, 2017), the court granted defendants’ motion to dismiss for improper venue. Defendants noted that the plaintiff had failed to allege specific facts demonstrating that venue was proper and instead offered conclusory allegations without factual support. Consequently, the court found that there was no factual basis upon which it could conclude that defendants had a “regular and established place of business” in the district that would justify venue.
In Caffeinate Labs, Inc. v. Vante Inc. et al, 16-cv-12480 (D. Mass. Dec. 12, 2017), the court granted defendants’ motion to transfer for improper venue, holding defendants had not waived their challenge to venue because, as the Federal Circuit recognized in In re Micron, the TC Heartland decision was an intervening change of law.2 The court further held that the case is “primarily one alleging patent infringement” and, as such, “the patent venue rules will be applied, and . . . this Court will not apply the doctrine of pendent venue,” which would have extended venue based on the plaintiff’s additional Lanham Act claim.