Before Lourie, Mayer, and Reyna. Appeal from the United States District Court for the Western District of Washington.
Summary: To establish proper venue, a plaintiff must allege specific facts showing that the defendant has a regular and established place of business physically located in the judicial district.
Westech sued 3M for patent infringement. In a motion to dismiss, 3M argued that venue was improper because it did not have a regular and established place of business in the judicial district. In response, Westech argued, in part, that the presence of 3M’s sales representatives and actual sales in the district supported venue. 3M’s reply included a declaration stating that 3M did not own, lease, use, or maintain property at any locations identified by Westech. The district court agreed with 3M that a sales presence in the district did not, by itself, satisfy the patent venue statute, but gave Westech a chance to amend its complaint to allege proper venue. Upon review of Westech’s amended complaint, the district court held that Westech failed to provide a factual basis demonstrating that 3M had a “regular and established” place of business in the district and therefore granted the motion to dismiss. Westech appealed and 3M moved for sanctions, arguing that Westech’s appeal was frivolous.
Westech argued on appeal that its complaint, which parroted 28 U.S.C. § 1400(b) by alleging that “3M has one or more regular and established places of business in this judicial district,” was sufficient to establish venue at the pleading stage. While recognizing that there is a “presumption that facts pleaded in the complaint are true,” the Federal Circuit noted that such presumption “does not supplant a plaintiff’s burden to plead specific facts showing that the defendant has a regular and established place of business physically located in the judicial district.” Thus, the Federal Circuit affirmed the dismissal.
The Federal Circuit agreed with 3M that Westech’s appeal was frivolous “as argued” because Westech disregarded controlling law that was “clearly contrary” to Westech’s position. However, the Federal Circuit denied 3M’s motion for sanctions since the issue of who bears the burden of establishing proper venue in patent infringement cases was not settled at the time Westech filed its appeal.