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 November 7 – November 17, 2017.
No Waiver of Objection to Venue
In In re Micron Tech., Inc., No. 2017-138 (Fed. Cir. Nov. 15, 2017), the Federal Circuit resolved a deeply divided district court split (see our prior coverage of the split between courts) by holding that TC Heartland was an intervening change in the law of venue. Defendants did not waive their venue defenses by failing to raise those defenses under Rule 12 because the venue arguments were not “available” prior to TC Heartland. Notwithstanding its interpretation of Rule 12, the court left the door open for district courts to exercise their “inherent powers” to find venue defenses waived where the defenses are “untimely” or “forfeited.” For a more detailed analysis of this critical decision, please see our article here.
In Rotex Global, LLC v. Gerard Daniel Worldwide, Inc., No. 3:16-cv-00523 (W.D. Wis. Nov. 14, 2017), the court held that the Federal Circuit’s decision in In re Cray, 871 F.3d 1355 (Fed. Cir. 2017), was an intervening change in the law of venue because it changed the standard for a “regular and established place of business” under 28 U.S.C. § 1400(b). Even though the case was filed in July 2016, the defendant waited until September 27, 2017, six days after Cray, to request a transfer to the Middle District of Pennsylvania. The court dismissed the plaintiff’s argument that the defendant had impliedly consented to venue through its participation in the litigation. The court also found that the plaintiff would suffer little prejudice as a result of transfer because “the discovery already taken [was] likely to be every bit as useful in Pennsylvania as it [was] in Wisconsin.” For a more detailed analysis of this decision, please see our article here.
In Cooper Lighting, LLC v. Cordelia Lighting, Inc. No. 1:16-cv-02669 (N.D. Ga. Nov. 13, 2017), the court held that TC Heartland was an intervening change in the law of venue. The court, however, still found venue proper as to defendant Cordelia under In re Cray because Cordelia (1) leased office space in the district, thus establishing a “physical presence”; (2) had operated its office continuously for seven years, making it “regular and established”; and (3) provided signage and an answering service that clearly identified the office as their location.
Waiver of Objection to Venue
In Nichia Corp. v. VIZIO, Inc., 2:16-cv-01453 (E.D. Tex. Nov. 15, 2017), Judge Gilstrap denied a motion to dismiss or transfer for improper venue because the defendant had waived its venue defense. The court held that the defense was waived because the defendant’s “omission of improper venue from [its] first 12(b) motion constitute[d] a ‘procedural misstep’” that cannot be excused even if TC Heartland is an intervening change in the law. Judge Gilstrap’s “procedural misstep” doctrine thus limits the applicability of the intervening change of law exception to waiver. It is unclear, however, whether the Nichia decision can be reconciled with the Federal Circuit’s decision in In re Micron on the same day (see our summary, above). In Micron, the Federal Circuit held that TC Heartland is an intervening change of law that excuses waiver under Rule 12. As such, the Micron decision appears to squarely reject the rationale of Nichia that a “procedural misstep” under Rule 12 somehow suspends application of the intervening change of law exception.
TC Heartland Transfer Issues
In Leach v. Day to Day Imports, Inc., Case No. 2:17-cv-07351 (C.D. Cal. Nov. 14, 2017), the court transferred a patent case to the Western District of Oklahoma under the first-to-file rule and dismissed the plaintiffs’ argument that transfer was inappropriate because venue in Oklahoma was unsupported by TC Heartland. The court found that the plaintiffs had waived their right to contest venue in Oklahoma when they brought their first action there, and also noted that the defendants had expressly consented to suit in Oklahoma.
In Traxcell Technologies., LLC v. ALE USA Inc., No. 2:17-cv-00041 (E.D. Tex. Nov. 13, 2017), the court granted plaintiff leave to conduct venue-related discovery where the Secretary of State’s website had evidence that the defendant was conducting business in Texas and there was a job posting for a “sales engineer” position within the district.
In Xodus Medical Inc. v. Allen Medical Systems, Inc., No. 2:17-cv-00581 (W.D. Pa. Nov. 8, 2017), the court granted the plaintiff’s motion for venue discovery before ruling on the defendant’s motion to dismiss for improper venue. The court noted that the “Amended Complaint fairly set out a basis for venue in this District, and that the Defendant [had] directly controverted it with new facts.” Further, the court explained that “[t]he Defendant may be correct as to those facts, and the consequences of them, but neither the Plaintiff nor the Court [was] obligated to simply take the Defendant at its word.” The court also noted that “branding the Plaintiffs’s request as a fishing expedition does little or nothing to advance the analysis, since in the Court’s experience, at times even a fishing expedition catches fish.”
In Niazi v. St. Jude Medical S.C., Inc., No. 3:17-cv-00183 (W.D. Wis. Nov. 7, 2017), the court denied venue-related discovery after determining venue to be improper under In re Cray, 871 F.3d 1355 (Fed. Cir. 2017). The court noted that the plaintiff had not cited any standard for determining when venuerelated discovery is appropriate. The court thus used the Seventh Circuit standard for discovery related to personal jurisdiction and determined that the plaintiff had failed to make a prima facie showing that it was entitled to discovery because, “[a]fter all, if a defendant has ‘a regular and established place of business’ in a district, evidence of that generally should be easily accessible to anyone, even without discovery.”