A Western District of North Carolina decision recently granted a defendant's motion to transfer to a more convenient venue, InVue Security Products Inc. v. Mobile Tech, Inc., 3-15-cv-00610 (W.D. N.C. Aug. 21, 2017) (Order, Judge Max O. Cogburn, Jr., Dkt. 65), but in doing so, decided that venue was proper under the second prong of 28 U.S.C § 1400(b). The district court determined that "field technicians who actively engage with customers" show that the defendant has a "regular and established place of business," for purposes of § 1400(b), in the district.
Plaintiff InVue sued Mobile Tech for patent infringement. In response, Mobile Tech immediately moved to transfer to a more convenient venue under 28 U.S.C. §1404(a). As part of its venue analysis, the court considered whether “the defendant has both committed acts of infringement and has a regular and established place of business here” pursuant to 28 U.S.C § 1400(b). Citing to the Federal Circuit’s decision in In re Cordis, 769 F.2d 733 (1985), the court noted that a “fixed physical presence in a district is not dispositive” as to the inquiry and that “the guiding question is whether the corporate defendant does it [sic] business through a permanent and continuous presence in the district.”
With the “permanent and continuous presence in the district” question in mind, the court reviewed the recent decision in Hand Held Products et al. v. Code Corporation, 2:17-cv-00820 (D.S.C., July 18, 2017) (Order, Dkt. 63) for guidance. There, the court determined that the defendant did not have a “regular and established place of business” in the state because the defendant had only one “single, recently hired employee who does not make sales or interact with customers in South Carolina and who maintains no inventory in South Carolina.”1 The InVue court also looked to the Fourth Circuit’s interpretation of “regular and established place of business” in American Cyanamid Co. v. Nopco Chem. Co., 388 F.2d 818 (4th Cir. 1968). There the Fourth Circuit found that a defendant did not have a “regular and established place of business” because the defendant did not have any property or salespeople in the district, and only employed one sales manager who lived in the district and worked from a home office.
Applying these cases, the InVue court noted that Mobile Tech did not have any property in the district, but did employ six part-time field technicians “who are paid hourly.” The technicians “do not solicit orders, enter into contracts, or make sales, but instead service existing accounts,” including “on-site customer services related to Mobile Tech’s allegedly infringing products, as well as on-site training and education, emergency call response 24/7, and an inventory of replacement parts and specialized tools.”
The court found Mobile Tech’s contacts with the district to be more concrete than the defendants in Hand Held Products and American Cyanamid because “the instant case” involves “field technicians who actively engage with customers in the district and the company is registered to do business in the state.” The court therefore found that Mobile Tech had a “regular and established place of business” in the Western District of North Carolina, which made venue appropriate.
The InVue decision, like the Eastern District of Texas decision in Raytheon Company v. Cray, Inc., 2-15- cv-01554 (E.D. Tex. June 29, 2017) (Order, Dkt. 289),2 thus supports the proposition that the defendant need not have a “place” of business in the judicial district to establish venue under § 1400(b). Rather, employing agents (e.g., repair technicians) within the forum may subject a company to venue.