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 19, 2017 – October 27, 2017.
Meaning of “Regular and Established Place of Business”
In Regents of the University of Minnesota v. Gilead Sciences, Inc., 16-cv-2915 (D. Minn. Oct. 20, 2017), the court determined that Defendant Gilead Sciences did not have a “regular and established place of business” for purposes of venue under 28 U.S.C. § 1400(b). While Gilead had twelve employees who lived and worked in the district, the court held that Gilead failed to satisfy any element of the Federal Circuit’s In re Cray three-part test for establishing a “regular and established place of business.” For example, the homes of Gilead’s employees were not sufficiently “regular and established” because the employees were not contractually bound to live or work in the district. Moreover, the homes were not a place of business “of the defendant” because the employees worked primarily on-site at the facilities of Gilead’s customers. Finally, Gilead did not own or rent any physical “place of business” in the district. For a full summary of the court’s analysis, please read our post entitled District of Minnesota Finds That Having Twelve Employees in the District is Not Enough to Establish Venue Under In re Cray.
Waiver of Objection to Venue
In Danco, Inc. v. Fluidmaster, Inc., 16-cv-0073 (E.D. Tex. Oct. 25, 2017), the Eastern District of Texas once again found that the defendant had waived its venue defense by failing to timely raise the objection. Here, the defendants generally objected to venue in their answer to plaintiff’s first amended complaint and also filed a motion to transfer venue based on convenience under 28 U.S.C. § 1404. After the Supreme Court’s TC Heartland decision, defendants filed a motion to dismiss or transfer for improper venue under 28 U.S.C. § 1400(b). The court denied the motion, holding that the defendants had waived the defense by not objecting to venue “in their first defensive move.” While the defendant objected to venue in its initial answer and filed a motion to transfer venue, the court held that these actions did not preserve the venue objection.
Yahoo Holings Inc. is seeking mandamus from an order denying its motion to dismiss for improper venue in Almondnet, Inc. et al. v. Yahoo! Inc., 16-cv-1557 (E.D.N.Y. Sept. 7, 2017). In its mandamus petition, Yahoo has sought review of two related questions. First, whether the district court erred in finding that TC Heartland did not constitute a change in law. Second, whether the court erred in finding that Yahoo had waived its right to challenge venue. Yahoo contends that it did not waive the defense where it expressly reserved the right to challenge venue in the event of a subsequent change in law. Yahoo! then filed its motion to dismiss shortly after the Supreme Court’s TC Heartland opinion. The Federal Circuit has ordered briefing on Yahoo’s petition, so this case may resolve how district courts should address waiver issues in the wake of TC Heartland.
No Waiver of Objection to Venue
In Jenny Yoo Collection, Inc. v. Watters Design Inc. et al., 16-cv-2205 (S.D.N.Y. Oct. 20, 2017), the court granted a motion to transfer for improper venue. After the Supreme Court’s TC Heartland decision issued, Defendants supplemented their pending motion to dismiss to include an improper venue argument. The court allowed the Defendants to supplement their motion because the TC Heartland decision was an intervening change of the law governing venue and defendants had not acted in bad faith in failing to raise the improper venue argument in their original motion. The court then granted the motion, finding that the plaintiffs had failed to demonstrate that venue is proper in the district.
Scope of the TC Heartland Decision
In Steuben Foods, Inc. v. Shibuya Hoppmann Corp., 10-cv-0781 (W.D.N.Y. Oct. 19, 2017), the court held that the Supreme Court’s TC Heartland decision concerns only the 2011 amendments to 28 U.S.C. § 1391, and therefore does not apply to an action commenced in 2010. Consequently, the court held that the Federal Circuit’s VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (1990) decision remains controlling over cases brought under the 1988 amendment to § 1391. The court therefore declined to revisit its prior denial of the defendant’s motion to dismiss for improper venue.