A Marshall jury in Judge Robert W. Schroeder III’s court returned a split verdict on infringement yesterday in a case involving an Israeli defense contractor’s patents on broadband technology that has already seen one trip to the Federal Circuit on the TC Heartland improper venue issue.
This is a patent infringement case filed last fall. By February of this year, only one defendant was left. That defendant challenged venue in its answer, and five days after the scheduling conference TC Heartland came out. The remaining defendant filed a motion to dismiss for improper venue shortly afterwards. Judge Love’s opinion granting the motion addresses a the proffered waiver argument, as well as the plaintiff’s claim that the motion should be denied because multidistrict litigation was “imminent.”
What gets attention since TCH is the effect of the decision on new patent case filings in the EDTX, and depending on which week you check filings, they have decreased by around half as plaintiffs voluntarily decide that they don’t have the venue facts to file here and choose to file elsewhere. What gets less attention is the effect of the decision on pending cases where plaintiffs come to the same conclusion.
These decisions show how those decisions come about, and what the Court does when the parties agree that the plaintiff needs its ticket punched, but can’t decide whether to dismiss or transfer.
One of the most active corners of the venue world in recent weeks has been when an improper venue defense that is waived for failure to assert in a defendant’s initial filings under FRCP can be revived. We recently have seen cases interpreting whether the Supreme Court’s TC Heartland counts as an intervening change in the law, and last week we saw another strategy tried.
I posted the other day on Judge Gilstrap’s opinion denying the defendant’s motion to transfer venue in Raytheon v. Cray. Below is additional information on the Federal Circuit proceedings in the case, current through just a few moments ago.
It’s not EDTX, but it’s useful. A judge in another district issued an opinion in a patent case last week setting the appropriate boundaries for venue discovery, and I thought it bears reviewing in light in Judge Gilstrap’s recent opinion on the subject for two reasons. First, it tells us what parties are seeking, and second, it tells us what courts are allowing.
On May 26, four days after the U.S. Supreme Court issued TC Heartland, Judge Rodney Gilstrap issued an order in a number of cases sua sponte calling for supplemental briefing as to the effect of TCH on motions that were either recently denied or still pending in which the defendants asserted the Fourco improper venue defense. That briefing would conclude on or about June 15.
Although not included with those cases, the defendant in Raytheon v. Cray had asserted Fourco in a motion which was subsequently denied based on VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990) in 2016, and on June 1, 2017, it reurged the improper venue defense approximately three months before trial. The Court set a briefing schedule concluding on June 22, and seven days later Judge Gilstrap issued a 27 page opinion that denied the motion.
Although a footnote on the last page of the opinion states that the opinion rests on the Federal Circuit’s holding regarding the “regular and established place of business” in In re Cordis Corp., 769 F.2d 733 (Fed. Cir. 1985), which was its last opinion on the subject before it essentially mooted the language in VE Holdings, the opinion contains an extensive analysis of the issues surrounding this language as a result of the numerous contested motions to dismiss or transfer, and provides guidance and a set of factors to be applied in future cases.
This isn’t unprecedented for common issues – Judge Gilstrap did the same for Section 285 motions earlier this year in Iris Connex, as did Judge Heartfield for motions to transfer a few years back in Mohamed v. Mazda (referred to by some down Beaumont way as the “Magna Carta” of venue jurisprudence for a number of years as it contained state of the art research on every venue issue district courts commonly saw), and Judge Hall on the same subject a few years earlier in 1992 in Box v. Ameritrust – analysis that he revisited in the first Marshall patent case Texas Instruments v. Micron the next year, incidentally).
I wanted to go through the opinion noting the issues it does (and does not) decide, since as the Court notes, they are being raised in numerous cases.
Documents can be filed a variety of ways in CM/ECF, which is the federal courts’ system for electronic filing. They can be notices, documents or motions, and it’s usually a good idea to file the document using the appropriate ECF event. But it is very, very important that a motion be filed as a motion. And there hangs a tale …
One of the questions presented after TC Heartland was whether waiver would apply in the cases of defendants who did not assert the Fourco defense of improper venue prior to the Supreme Court’s decision TC Heartland. In a recent case an EDTX court reviewed recent decisions by other courts finding that waiver does apply and agreed, at least in the situation of a looming trial date.
It wasn’t at a pretrial conference, but instead in an initial responsive pleading that Apple today challenged a plaintiff’s complaint for failure to state a claim under 12(b)(6), but did not challenge venue under 12(b)(3) under TC Heartland.