Court Declines to Exercise Pendent Venue Over a Patent Case and Denies Section 1400(b) Discovery

Olivia Garden, Inc. v. Stance Beauty Labs, Inc., et al., N.D. Cal (July 12, 2017) (Judge Haywood S. Gilliam, Jr.)

In a June 12, 2018, order, Judge Haywood S. Gilliam, Jr. granted the motion of defendant Stance Beauty Labs (“Stance”) to dismiss for improper venue, rejecting plaintiff Olivia Garden’s request that the court exercise pendent venue over its claims.  The court found that pendent venue was unavailable for patent claims, despite being brought alongside related claims that the plaintiff brought against a codefendant.

Specifically, Olivia Garden brought claims against Stance (represented by Orrick) and codefendant Burlington Coat Factory of Texas (“Burlington Texas”) alleging design patent infringement, trade dress infringement and unfair competition based on certain of the defendants’ brush products.  Stance subsequently moved to dismiss based on improper venue.  In opposition, Olivia Garden acknowledged that Stance was incorporated in Connecticut and that it lacked facts sufficient to show proper venue under the second prong of 28 U.S.C. § 1400(b). READ MORE

Could the Physical Presence of a Party’s Affiliate Make Patent Venue Proper?

Mallinckrodt IP et al. v. B. Braun Medical, C.A. Nos. 17-365-LPS, 17-660-LPS (D. Del. Dec. 14, 2017 Memorandum Order Requiring Venue Discovery).

In this patent infringement action, defendant B. Braun moved to dismiss the action for improper venue, arguing that venue is improper under TC Heartland and In re Cray because B. Braun does not reside in Delaware and does not have a regular and established place of business in Delaware. In response, plaintiff Mallinckrodt argued that that the places of business of any B. Braun entity, including B. Braun affiliates, subsidiaries, or alter egos, may be attributable to B. Braun for venue purposes. READ MORE

When Does a Work-at-Home Employee’s Residence Become the Employer’s Place of Business for Patent Suits?

Memorandum Opinion and Order Granting Motion to Dismiss for Improper Venue, BillingNetwork Patent, Inc. v. Modernizing Medicine, Inc.,
N.D. Ill. (November 6, 2017) (Judge Ruben Castillo)

We previously reported here about the Federal Circuit’s guidance in In re Cray, Inc. on what is a “regular and established place of business” for purposes of establishing venue over a corporation in patent infringement actions under 28 U.S.C. § 1400(b).  Venue is proper only if the corporation has a “physical place in the district” that is “a regular and established place of business,” and is also “the place of the defendant.”  A recent opinion from the Northern District of Illinois applies that guidance to address whether venue lies in a state where a company: (1) is registered to do business as a foreign corporation; (2) has a registered agent for service of process; and (3) maintains several work-at-home employees. Chief Judge Ruben Castillo concludes that, under In re Cray, Inc., these facts are insufficient to establish venue. READ MORE

Federal Circuit Rules that TC Heartland is a Change of Law Preventing a Waiver of Venue, But Rules That a Forfeiture of Venue May Still Exist

Granting Petition for Writ of Mandamus, In re: Micron Technology,
Fed. Cir. (November 15, 2017)

In the wake of the Supreme Court’s decision in TC Heartland, courts had been struggling with the question of whether defendants who had already answered waived their right to challenge the propriety of the plaintiff’s choice of venue.  This often turned on the question of whether TC Heartland was in fact a change of law.  If it was a change of law, then the post-TC Heartland venue challenge did not exist under Rule 12(g)(2), and therefore could not be considered waived under Rule 12(h)(1)(A).  If it was not a change of law, then there could be a waiver.  Today the Federal Circuit has settled this debate, but has also set forth that the district courts retain other bases to “reject a venue defense for non-merit reasons, such as by determining that the defense was not timely presented.”  Accordingly, the Federal Circuit opinion states that this ruling provides a “less bright-line, more discretionary framework[.]” READ MORE

District of Delaware “Clips”- Off Venue-Discovery for Medical Device Company but Allows It for Pharmaceutical Company

Boston Sci. Corp. v. Cook Grp., Inc., No. 15-980-LPS-CJB, 2017 U.S. Dist. LEXIS 146126, at *2 (D. Del. Sep. 11, 2017); Bristol-Myers Squibb Co. v. Mylan Pharm., Inc., No. 17-379-LPS, 2017 U.S. Dist. LEXIS 146372, at *3 (D. Del. Sep. 11, 2017)

In the wake of the Supreme Court’s TC Heartland decision, District of Delaware Chief Judge Stark recently decided two venue transfer motions in patent cases that may have far-ranging implications for future patent litigation in Delaware. In one case, he ordered further discovery on the appropriateness of venue in the other, given the past litigation conduct of the defendant. In the other, he transferred the case out of the district. These decisions may be especially important in Hatch-Waxman cases where generic drug companies lack a corporate presence in Delaware but previously have sought to challenge a patent under that statute. READ MORE

Venue in the Eastern District of Texas Post-TC Heartland

Raytheon Company v. Cray, Inc., E.D. Tex. (June 29, 2017) (Judge Rodney Gilstrap)

On June 29, 2017, Judge Gilstrap of the Eastern District of Texas issued an opinion analyzing the factors to consider when determining whether, in the absence of “residence” in the district, a defendant “has committed acts of infringement and has a regular and established place of business” there for purposes of satisfying the venue statute.  This is an issue that the Federal Circuit has not touched since 1985, leaving litigants and courts to review numerous, not always consistent, regional court decisions.

This particular patent case concerns technologies allegedly incorporated into a Cray XC40 supercomputer installed at the University of Texas Austin’s campus (which is not in the Eastern District of Texas).  While this case has been pending since 2015, Cray had timely filed a motion to dismiss for improper venue early in the action. READ MORE

TC Heartland – One Month Later Delaware, Texas, California and Illinois Courts Most Popular Venues

We previously reported on the early impact of the Supreme Court’s decision in TC Heartland based on the first few weeks of new filings. (For a summary of the TC Heartland opinion and its implications, click here.) It has now been one month, and based on the filing data for the month since TC Heartland as well as historical data since the beginning of 2016, we now have a better sense of how things have changed and how things may look in the future. Using data obtained from Docket Navigator, we compared filings in the month since TC Heartland came down on May 22 with filings earlier this year and also for all of 2016. READ MORE

The Northern District of California Shoots to Second Place After TC Heartland

It’s been just over two weeks since the Supreme Court decision in TC Heartland.  (For a summary of the opinion and its implications, click here.)  As plaintiffs and the courts now struggle to deal with venue in patent cases (and patent litigators brush up on venue law), we looked at recent filings to see what effect the decision had on where patent complaints are being filed.  Using data obtained from Docket Navigator, we compared filings in the sixteen days since TC Heartland came down on May 22 with filings earlier this year between March 1-May 21.  READ MORE

A “Virtual” Home Is Not a Home: Court Sanctions Plaintiffs for “Reckless Disregard” in Deciding the Proper Forum for Their Litigation

Usually, one benefit of being a plaintiff is deciding in what forum to pursue litigation.  Generally, even a foreign-based plaintiff may pursue litigation in a U.S. forum where a defendant may be found or in which there is a substantial connection to the litigation.  There are, however, limits on a plaintiff’s choice of forum, and a recent decision in Tapgerine LLC v. 50Mango, Inc. demonstrates that pushing those limits may result in sanctions. READ MORE

August Recap

In August 2014, we saw perhaps the first ND Cal decision awarding attorney’s fees under the Supreme Court’s Octane Fitness decision. Judge Illston based her exceptional case finding on the plaintiff’s lack of adequate pre-filing investigation and unreasonable litigation tactics. (Also interesting was her finding that plaintiff had waived attorney-client privilege by failing to adequately screen its document production.) Litigants were also reminded, however, that the recent Supreme Court decisions only help so much: finding that Akamai had been limited to the issue of indirect infringement, Judge Cousins barred a plaintiff from amending contentions to add a divided direct infringement theory.

Looking at threshold issues, Judge Chhabria transferred a case for insufficient ties to California while finding he had declaratory judgment jurisdiction when the patentee’s C&D letter identified accused features, even if it failed to name specific products. Meanwhile Judge Davila, consistent with prior practice, granted another stay pending a third-party IPR on the condition that defendants agreed to be bound by the same estoppel. Getting into merits issues, we saw a pair of decisions on expert reports, one by Judge Wilken applying Daubert and one by Judge Illston considering whether theories and evidence had been adequately disclosed during discovery. In addition, the Federal Circuit affirmed claim construction decisions by Judges Ware and Chen in Mformation Technologies v. RIM (also noted on Patently-O). And we’ll be getting more attention from the East Coast soon, as the Patent Office announced that its America Invents Act roadshow will be coming to Cupertino in October.