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.
The summaries below are grouped by topic and cover the period September 22 – September 29, 2017.
Meaning of “Regular and Established Place of Business”
In Talsk Research Inc. v. Evernote Corp., 16-cv-2167 (N.D. Ill. Sept. 26, 2017), the Northern District of Illinois became the first court to apply the Federal Circuit’s decision in In re Cray, Inc., No. 2017-129 (Fed. Cir. Sept. 21, 2017), concerning the requirements for a “regular and established place of business” under 28 U.S.C. § 1400(b). The court held that a software company did not have a “physical, geographical location” in Illinois sufficient to establish venue, despite having a network of independent contractors in the district who promoted the allegedly infringing products. Talsk will likely be the first in a long line of decisions that grapple with applying the In re Cray test to technology companies that conduct much of their business online. For a full summary of the case, please see Northern District of Illinois Becomes First to Apply Federal Circuit’s Decision in In re Cray.
Waiver of Objection to Venue
In Oyster Optics, LLC v. Ciena Corp., 2:17-cv-511 (E.D. Tex Sept. 22, 2017), the Eastern District of Texas (Judge Gilstrap) denied a motion to dismiss for improper venue under 28 U.S.C. § 1400. In denying the motion, the court noted that failing to raise venue as part of an earlier Rule 12(b)(6) motion was a “procedural defect” resulting in waiver of the defense. The court further held that it is irrelevant whether TC Heartland is an intervening change in the law because the Federal Circuit “[did] not permit broad application of the intervening law doctrine as an exception to waiver, especially when waiver arises from a procedural misstep, such as an untimely filing.” The court also held that even if Fifth Circuit regional law were to govern, as other courts have suggested, the defendant’s motion still would have failed. Nonetheless, the court eventually transferred the case to the Northern District of California for convenience under 28 U.S.C. § 1404.
In Insidesales.com, Inc. v. SalesLoft, Inc., 2:16CV859 (D. Utah Sept. 26, 2017), the court denied the defendant’s motion to dismiss or transfer for improper venue. Even while the District of Utah has held that TC Heartland was an intervening change in the law, the court nonetheless found that the defendant had waived its venue defense by waiting for the outcome of an earlier-filed Rule 12(b)(6) motion before raising its challenge following the TC Heartland decision. The court stated: “SalesLoft similarly could have, and should have, notified the court of the TC Heartland decision if it did not want to waive the venue challenge. By waiting to see how the court would come out on its unpatentability motion, SalesLoft waived its venue challenge.”
In Bd. of Trs. of the Univ. of Ill. v. Micron Tech., Inc., 2:11-cv-2288 (C.D. Ill. Sept. 28, 2017), the court held that the defendant, Micron, had waived its venue defense to the plaintiff’s claims of patent infringement. In so holding, the court found that TC Heartland was not an intervening change in the law that would excuse Micron’s waiver.
The Doctrine of “Pendent Venue”
In Omega Patents, LLC v. CalAmp Corp., 6:13-cv-1950 (M.D. Fla. Sept. 22, 2017), Judge Byron of the Middle District of Florida relied on the rarely used doctrine of “pendent venue” to deny a motion to vacate a jury verdict due to improper venue. In particular, the court found that venue was proper with respect to all of the plaintiff’s claims because the defendant had previously consented to venue with respect to one of the claims. The court’s reliance on the doctrine of “pendent venue” may signal another avenue for plaintiffs seeking to avoid the full effects of TC Heartland. If a plaintiff can establish venue over one claim, then the plaintiff may seek to add other claims for which venue would otherwise be improper under TC Heartland. Courts, however, will need to explore the boundaries of this rarely-invoked doctrine and several earlier decisions suggest “pendent venue” may not be applicable to claims where venue is governed by 28 U.S.C. § 1400. For a full summary of the case, please see Court Relies on Doctrine of “Pendent Venue” in Denying Motion to Vacate Based on Improper Venue.