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 23 – August 29, 2017.
Meaning of “Regular and Established Place of Business”
In Kranos IP Corp. v. Riddell, Inc., Civ. No. 2:17-cv-443-JRG (E.D. Tex. Aug. 28, 2017), the Eastern District of Texas denied the defendant’s motion to dismiss for improper venue. The court held that defendant’s activities in the district, including employing two full-time sales representatives there, created a regular and established place of business. For a full summary of the case, please see our article entitled “Applying Raytheon, Judge Gilstrap Finds Two Sales Reps Creates a Regular and Established Place of Business for Venue.”
In Free-Flow Packaging International, Inc. v. Automated Packaging Systems, Inc., Civ. No. 17-cv- 1803-SK (N.D. Cal. Aug. 29, 2017), the Northern District of California granted the defendant’s motion to dismiss for improper venue. Defendant Automated had three sales representatives residing in the district and a fourth representative working in the district. The court noted, however, that “the location of [the employees’] residence appears to [be] one of convenience and choice for the employees, as opposed to a requirement by Automated [on] the location of their workplace.” Moreover, while the employees spent time working in the district, they also “covered a large area” and “spent, at most, less than twenty-five percent of their time” there. The facts were, therefore, distinguishable from other cases—notably, In re Cordis Corp., 769 F.2d 733, 737 (Fed. Cir. 1985) and Raytheon Co. v. Cray, Inc., Civ. No. 2:15-cv-01554- JRG, 2017 WL 2813896 (E.D. Tex. June 29, 2017)—that found a regular and established place of business based on the presence of employees dedicated to the particular district. Moreover, Automated’s sales representatives did not process sales orders themselves, but sent them to their headquarters outside of the district. Thus, the court found that Automated was merely “doing business” in the district, and held that it did not have a regular and established place of business there.
Waiver of Objection to Venue
In Eyetalk365, LLC v. Skybell Technologies, Inc., Civ. No. 3:16-cv-702-FDW-DCK (W.D.N.C. Aug. 24, 2017), the Western District of North Carolina denied the defendant’s motion to dismiss for improper venue. Although the defendant had initially preserved its venue challenge by including it in its first amended answer, “a defendant may still waive that challenge by actively participating in the case or by waiting a significant period of time to seek relief.” Because Skybell continued litigating the case for an additional two months before filing the motion to dismiss, including participating in discovery and receiving infringement contentions, the court held that Skybell waived its right to contest venue.
No Waiver of Objection to Venue
In Smart Wearable Technologies., Inc. v. Fitbit, Inc., Civ. No. 3:16-cv-77 (W.D. Va. Aug. 29, 2017), the Western District of Virginia granted Fitbit’s motion to transfer venue. Plaintiff did not dispute that venue was improper following TC Heartland, but argued that Fitbit waived its right to challenge venue by failing to raise it in its initial Rule 12 response. The court observed that there is split in authority on whether TC Heartland constitutes an intervening change in the law (an exception to waiver). Ultimately, the court sided with the line of cases recognizing the change in the law. “This precise argument was previously foreclosed by controlling Federal Circuit precedent. Thus, as a practical matter, the legal basis for Fitbit’s motion to transfer was unavailable prior to TC Heartland.”