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 August 9 – August 15, 2017.
Meaning of “Regular and Established Place of Business” – District Court
In McCain Foods Ltd. v. J.R. Simplot Co., 1:17-cv-01326 (N.D. Ill. Aug. 9, 2017) (Order, Judge Sara L. Ellis, Dkt. 40), the court granted the defendant’s motion to transfer to a more convenient venue, although, it noted that it also would have granted an improper venue motion if defendant had not admitted that venue was proper in its answer. The defendant did not have a “regular and established place of business” because it did not “have facilities of any kind that would constitute an established business” in the district and its “only contact with Illinois is through the sale of its products, which, prior to [the Federal Circuit’s] VE Holding, the Seventh Circuit deemed insufficient for venue under § 1400(b).”
The District of Delaware denied Apple’s motion to dismiss for improper venue in Prowire LLC v. Apple Inc., 1-17-cv-00223 (D. Del. Aug. 9, 2017) (Order, Judge Mark A. Kearney, Dkt. 46). Apple argued that having only one retail store in Delaware was insufficient to establish a “permanent and continuous presence” that qualifies as a “regular and established place of business.” The court rejected Apple’s position, noting that Apple “sells the alleged infringing technology to consumers on a daily basis.” For a full summary of the case, please see our post entitled Single Retail Store Has a “Permanent and Continuous Presence” That Is a “Regular and Established Place of Business”.
In Jarratt et al v. Amazon.Com, Inc., 5:16-cv-05302 (W.D. Ark. Aug. 10, 2017) (Order, Judge P.K. Holmes, III, Dkt. 52), the court granted Amazon’s motion to transfer the Western District of Washington. The court reasoned that Amazon is headquartered there and “it inarguably has a regular and established place of business in that district,” and that any allegedly infringing acts of selling products through the website “occurred there, as much as they occurred anywhere.” Notably though, the court also dismissed Amazon’s motion to dismiss for improper venue because it had waived the defense by not raising it at the outset of the case. The court held that the Supreme Court’s TC Heartland decision was not an intervening change in the law that qualifies as an exception to waiver.
The Eastern District of Virginia granted Defendants’ motion to dismiss for improper venue in Glasser v. Barboza et al., 1-17-cv-00322 (E.D. Va. Aug. 11, 2017) (Order, Judge Claude M. Hilton, Dkt. 38). The court determined that online sales through Amazon.com, without a corresponding presence, do not create a “regular and established place of business for the purposes” of meeting the venue test under the second prong of 28 U.S.C. § 1400(b). The court therefore held that venue is improper in the Eastern District of Virginia. For a full summary of the case, please see our post entitled Online Sales Do Not Create a "Regular and Established Place of Business"; TC Heartland Applies to Unincorporated Entities.
TC Heartland Applies to Unincorporated Entities
The Eastern District of Tennessee granted Plastic Development Group’s (“PDG”) motion to transfer for improper venue in Maxchief Investments Ltd. v. Plastic Development Group, LLC (TWP2), 3:16-cv- 00063 (E.D. Tenn. Aug. 14, 2017) (Order, Judge Thomas W. Phillips, Dkt. 57). In so doing, the court determined that the Supreme Court’s TC Heartland decision applies to unincorporated entities, which have traditionally been treated like corporations for venue purposes. The Supreme Court explicitly declined to reach this issue in TC Heartland. For a full summary of the case, please see our post entitled Online Sales Do Not Create a "Regular and Established Place of Business"; TC Heartland Applies to Unincorporated Entities.