This is a 1400(b) case in which the court passes on the plaintiff’s claim that the “regular and established place of business” test was satisfied. But the case had an interesting twist I had not seen previously.
Fourteen years ago now, two residents of the Eastern District of Texas drove the few miles that separated their homes from LBJ Freeway in Dallas, where they were rear-ended by a truck driver from Tyler, resulting in the death of their daughter/granddaughter in the back seat. Several months later the survivors of that collision, who had since moved out of the Eastern District, filed a product liability case in the Eastern District.
In its rulings (there were three) on the petition for mandamus of the district court’s order denying the defendant’s motion to transfer venue the Fifth Circuit held that it was the plaintiffs’ current residence, i.e. the residence at the time the suit was filed, that was relevant, not their residence at the time the cause of action arose. The consequences of that ruling have affected the actions of parties, district courts and the Federal Circuit ever since, including in a recent order publicly reprimanding an attorney for inaccurate factual contentions contained in his client’s declaration opposing a motion to transfer.
This motion began life challenging venue as improper and inconvenient. The portion alleging improper venue was later withdrawn, so the only issue remaining was whether venue was “clearly more convenient” in the Dallas Division of the Northern District of Texas.
This case has an interesting procedural history with respect to venue. Five months after TC Heartland the defendant filed a Section 1404 motion, but didn’t challenge venue as improper. That motion was denied, as was the mandamus petition challenging it. Ten months after the mandamus denial, after a change in lead counsel, the defendant filed a motion asserting improper venue. The order on that motion addresses several issues, including venue over foreign defendants, the geographic jurisdiction of the court, creative uses of the marking statute, and even more creative arguments regarding venue waiver.
Today’s second case addresses the same issues in a case involving the same plaintiff – but with different facts as to a different defendant. And I wanted to point out some additional analysis involving the Federal Circuit’s recent decision in In re HP.
Today’s posts deal with a couple of instances of the issue of venue practice by foreign corporations in patent cases. Currently this often takes the place of a motion to dismiss for lack of personal jurisdiction under FRCP 12(b)(2) and an alternative motion to transfer under 28 USC Section 1404. Today we have a couple of examples of this.
Docket Navigator has a new report out looking at how the 2017 landmark Supreme Court decision reshaped the patent litigation landscape. It seeks to answer the questions: Did TC Heartland reduce the overall level of patent litigation activity in the U.S. or merely shift litigation to different courts? How has TC Heartland impacted cases that were pending when the decision was issued, with particular focus on the Eastern District of Texas? How has TC Heartland affected highly assertive patentees differently than other patentees? The report uses a new term, “highly assertive entities” or HAEs to try to break out the effect of the ruling on different types of litigants, and contains a useful color-coded listing of courts’ decisions to date on what is and is not a “regular and established place of business” (REPB). It also has lots of good data on transfer rates and other things you might want to know about the effect TC Heartland has had on patent filings. Plus it has lots and lots of blue, and I just like blue. It is not the correct “purple” tint of blue used by U.S. naval camouflage in 1942-45 (and accordingly, this weblog) but still. Even though he doesn’t own a major sports franchise, as our other recent speaker additions do, Docket Navigator CEO Darryl Towell will also be joining us at the EDTX bench bar later this month to talk about … well, venue after TC Heartland.
The issue of when venue discovery is proper comes up frequently in patent litigation post TC Heartland, and especially since the Federal Circuit clarified in In re ZTE that the plaintiff, not the defendant, bears the burden of showing that venue is proper. This opinion sets out Judge Gilstrap’s standard on when venue discovery is proper, as well as providing another illustration of when a physical place of business that is regularly established is “of the defendant”.
Several months ago I announced the last ruling that dealt with a claim of waiver for failure to assert an improper venue claim timely following TC Heartland. I was premature, because there was still this case, which was stayed due to pending IPR proceedings three months before Heartland was decided. When the stay was lifted several weeks ago, the defendant asserted an improper venue argument, and the plaintiff asserted that the defense had been waived.
One of the more recent examples of the venue order is this one from Judge Payne last month which denies a motion seeking a transfer to Delaware . What makes this order different than the run of the mill orders – what Justice Scalia would have called “mine run” for reasons that still baffle legal scholars – is that it’s based on some forum selection clauses in prior patent license agreements, as well as a judicial economy argument due to prior Delaware cases.