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 October 4 – October 12.
Meaning of “Regular and Established Place of Business”
In American GNC Corp. v. ZTE Corp., Civ. No. 4:17-cv-620-ALM-KPJ (E.D. Tex. Oct. 4, 2017), the magistrate judge recommended denial of the defendant’s motion to dismiss for improper venue. The report and recommendation found that that a call center in Plano, Texas operated by a third party, iQor, should be considered a regular and established place of business of ZTE. The court reasoned, among other things, that iQor has more than sixty customer service representatives dedicated to ZTE USA, that ZTE USA has at least two full-time supervisor employees on site, and that ZTE’s website seamlessly integrates with the support center. Thus, the court was “not persuaded by ZTE USA’s argument that the call center is not a regular and established place of business simply because ZTE USA has chosen to delegate its call center operations to a third party.” The opinion does not cite or discuss the Federal Circuit’s recent In re Cray decision, in which the Federal Circuit stressed that the regular and established place of business must be “of the defendant” (see our recap of In re Cray here).
In Patent Holder, LLC v. Magill, 1:17-cv-22826-UU (S.D. Fla. Oct. 6, 2017), the court granted defendants’ motion to transfer due to improper venue. Applying In re Cray, the court held that plaintiffs presented no evidence that defendants maintained a physical place of business in the district. Evidence that defendants sold accused products to distributors in the district did not meet the regular and established place of business standard.
Similarly, in JPW Industries, Inc. v. Olympia Tools International, Inc., 3:16-cv-03153-JPM (M.D. Tenn. Oct. 10, 2017), the court found improper venue due to lack of a physical presence in the district. The defendant’s ongoing business connections with distributors, retailers, and consumers there did not constitute a regular and established place of business.
Waiver of Objection to Venue
In BASF Corp. v. SNF Holding Co., Civ. No. 4:14-cv-2733 (S.D. Tex. Oct. 6, 2017), the court denied defendants’ motion to dismiss for improper venue. Although the defendants had previously moved to transfer venue for convenience, they had not previously moved to dismiss for improper venue. The parties had already filed dispositive motions and were nearing trial. Under these circumstances, the court found that the defendants had waived their objection to venue. Moreover, the court agreed with the decisions finding that TC Heartland is not an intervening change in the law that excuses waiver because the defense based on the Supreme Court’s 1957 decision in Fourco, which was available prior to the Court’s recent TC Heartland decision.