1. TC Heartland and Its Aftermath
BAMSL | December 5, 2017
Keith Grady |Karen Morris| Richard Juang

2. Presentation Summary Pre-TC Heartland History on Patent Venue
The Decision: TC Heartland Recap
Post-TC Heartland Case Law Aftermath
Motions to Dismiss / Transfer
Change in Law / Transfers Granted
No Change in Law / Waiver
Fed Cir. Weigh-in with In re Micron Tech.
Case Law on Regular and Established Place of Business
Additional Thoughts

3. Patent Venue Before TC Heartland
Two statutes at play:
§1400(b): Any civil action for “patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”
§1391(c):  a corporation is deemed to be a resident of “any judicial district in which such defendant is subject to the court’s personal jurisdiction…”
Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957)
The Supreme Court held that § 1400(b) is not to be supplemented by §1391(c) and that “§1400(b) is the sole and exclusive provision controlling venue in patent infringement actions…”
VE Holding Corp. v. Johnson Gas Appliance Co., 917 F. 2d 1574 ( Fed. Cir. 1990)
Federal Circuit announced its view that the Judicial Improvements and Access to Justice Act of 1988 made §1391(c) applicable to patent infringement actions
Practitioners and courts followed VE Holding

4. TC Heartland Decision
28 U.S.C. §1400(b): The sole and exclusive provision governing venue in patent infringement actions; not supplemented by 1391(c)
Venue is established by:
1. State of incorporation; OR
2. Act of infringement AND regular and established place of business (REPOB)

5. TC Heartland Decision

6. Case Law Aftermath Somaltus LLC v. The NOCO Company, Inc.
Granted motions to Transfer / Dismiss / Leave to Amend
Somaltus LLC v. The NOCO Company, Inc.
Composite Resources Inc. v. Recon Medical LLC
F5 Networks, Inc. v. Radware, Inc.
Westech Aerosol Corp. v. 3M Co. et al.
Ford Global Tech. v. New World Intl, Inc.

7. Somaltus LLC v. The NOCO Company, Inc.
Case No. 17-cv-00037, 2017 WL , (E.D. Tex. May 25, 2017)
Defendant filed MTD or motion to transfer to N.D. Ohio because it is incorporated there and had no regular and established place of business in Texas
Plaintiff did not dispute these facts, but filed response brief in opposition before TC Heartland was decided by SCOTUS
Court ordered transfer

8. Composite Resources Inc. v. Recon Medical LLC
Case No. 17-cv (D.S.C. June 26, 2017), D.I. 28
Case filed in January 2017 | No discovery
Motion for change of venue from D.S.C.  D. Nev.
Technically unopposed
Court’s Text Order granted motion:
Defendant incorporation in Nevada;
Affidavit re no REPOB
Despite fact that Defendant acknowledged venue as being proper in counterclaim

9. F5 Networks, Inc. v. Radware, Inc.,
Case No. 16-cv-480 (W.D. Wash. May 30, 2017) (D.I. 97)
Defendant previously moved to dismiss under improper venue
Court denied it and noted the Federal Circuit’s decision at that time in TC Heartland was good law
After SCOTUS weighed in, defendant filed stipulated motion to transfer to N.D. Cal.
Court granted

10. F5 Networks, Inc. v. Radware, Inc.
-Id., Case No. 16-cv-480 (W.D. Wash. May 30, 2017) (D.I. 97)

11. Westech Aerosol Corp. v. 3M Co. et al.
Case No. 17-cv-5067, 2017 WL (W.D. Wash. June 21, 2017)
Defendants 3M and Northstar incorporated in Delaware and Massachusetts
Neither have a regular and established place of business in Washington
Sought leave to amend second motion to dismiss
Plaintiff argued waiver, and that improper venue argument was available to defendants since the Fourco decision in 1957
Held: Leave to amend granted
Briefing on motion to dismiss filed in early October

12. Westech Aerosol Corp. v. 3M Co. et al.
-Id., 2017 WL at *2 (W.D. Wash. June 21, 2017)

13. Westech Aerosol Corp. v. 3M Co. et al.
-Id., 2017 WL at *2 (W.D. Wash. June 21, 2017)

14. Ford Global Tech., LLC v. New World Intl., Inc. et al.
Case No. 15-cv-10394, 2017 WL (E.D. Mich. Nov. 7, 2017)
Parties agreed that venue was improper
Plaintiff’s assertion was that venue objections were waived by failure to challenge venue in initial pleading
Held: Motion to Transfer Granted

15. Ford Global Tech., LLC v. New World Intl., Inc. et al.

16. Case Law Aftermath Amax, Inc. v. ACCO Brands Corp.
Transfers and MTDs Denied Due to Change in Law / Waiver
Amax, Inc. v. ACCO Brands Corp.
iLife Tech. v. Nintendo
Chamberlain v. Techtronic Indus. Co.
Infogation Corp. v. HTC
Danco, Inc. v. Fluidmaster, Inc.

17. Amax, Inc. et al. v. ACCO Brands Corp.
Case No. 16-cv-10695, 2017 WL (D. Mass, June 30, 2017)
“Defendant’s contention that it preserved its defense of improper venue by stating in its answer that it ‘denies that venue is proper in this District’ is insufficient.” Id. at *2.
After filing its answer, defendant failed to raise the defense of improper venue because is sought transfer under 28 U.S.C 1404(a), which operates on the premises that the plaintiff has properly exercised his venue privilege
By filing a motion to transfer venue based upon convenience and failing to assert that venue was improper in that motion, defendant conceded that venue is proper in this Court

18. iLife Tech., Inc. v. Nintendo of America, Inc.
Case No. 13-cv-04987, 2017 WL , (N.D. Tex. June 27, 2017)
Original motion to transfer denied in 2014, Nintendo moves to transfer in light of TC Heartland
“The Court concludes, therefore, except where congressional abrogation of a Supreme Court decision is express, “only [the Supreme] Court may overrule one of its precedents”— whether through its own opinion or recognition of congressional override—and until that occurs, Fourco is and still was the law.” Id. at *7.
“In VE Holding, the Federal Circuit clearly thought that Congress had implicitly overridden Fourco by statutory amendment. However, until the Supreme Court considered the question, Fourco remained the law.” Id.

19. Chamberlain Group, Inc. v. Techtronic Indus. Co., Ltd. et al.
Case No. 16-cv-06097, 2017 WL (N.D. Ill. June 28, 2017)
“The Court finds that the Moving Defendants cannot overcome waiver by invoking TC Heartland.” Id. at *1.
The Moving Defendants twice pled that “Defendants admit that venue is proper in this district under 28 U.S.C. §§ 1391(b) and/or 1400(b).” Id.
“The conflict between Fourco and VE Holding was a defense that was available to Moving Defendants just as easily as it was to the plaintiff in TC Heartland.” Id.

20. Infogation Corp. v. HTC Corp.
Case No. 16-cv-01902, 2017 WL (S.D. Cal. Jul. 5, 2017)
Filed a motion to dismiss the action for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3)
Defendants waived their defense of improper venue
Agrees with other District Courts that “TC Heartland does not qualify for the intervening law exception to waiver because it merely affirms the viability of Fourco.”

21. Danco, Inc. v. Fluidmaster, Inc.
Case No. 16-cv-0073, 2017 WL (E.D. Tex. Oct. 25, 2017)
November, 2016: filed motion to dismiss / transfer to C.D. Cal. based on convenience
June 2, 2017: in response to first amended complaint, amended answer included affirmative defense of improper venue based on TC Heartland
Later, on June 5, filed motion to dismiss / transfer
Court held: Defense waived
“Fluidmaster’s first answer to the original complaint did not include an objection that venue was improper under §1400(b) as interpreted by Fourco Glass. . . The defense was therefore waived.” Id. at *3.

22. Case Law Aftermath
Federal Cir. weighs in on change of law with In re Micron Tech., Inc., ---F.3d---, 2017 WL (Fed. Cir. 2017)
Micron filed mandamus to set aside d.c.’s denial of motion to dismiss or transfer, based on waiver
Issue warranting mandamus: “[T]he result [of TC Heartland] has been widespread disagreement over the change-of-law question relevant to waiver under Rule 12(g)(2) and (h)(1)(A).” Id. at *1.
Rule 12(h)(1)(A) states that venue under 12(b)(3) is waived if omitted from a motion in the circumstances described in Rule 12(g)(2).
12(g)(2): “a party that makes a motion under this rule must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.”

23. In re Micron Tech.
“The venue objection was not available until the Supreme Court decided TC Heartland because, before then, it would have been improper, given controlling precedent, for the district court to dismiss or to transfer for lack of venue.” Id. at *4.
“The law of precedent is part of what determines what law controls. The language “was available” focuses on the time of the motion in the district court, not some future possibility of relief on appeal, thus pointing toward how the district court may permissibly act on the motion at the time—i.e., where the motion is for dismissal, whether it can dismiss the case and thereby avoid wasting resources on continued litigation.” Id.
District courts are bound by Federal Circuit precedent. Id.
The decision in V.E. Holdings did produce a “different statutory prescription” from the holding in Fourco Glass. Id. at *5.

24. In Re Micron Tech.
Although venue is not waived under rule 12(h) and (g), “[t]he Supreme Court recently confirmed that the Federal Rules of Civil Procedure ‘are not all encompassing’ and that there are ‘standard procedural devices trial courts around the country use every day in service of Rule 1's paramount command: the just, speedy, and inexpensive resolution of disputes.’” Id. at 6.
“[W]hereas the waiver rule of Rule 12(g)(2) and (h) (1)(A) requires a focus on the time the TC Heartland venue objection was “available” for the district court to adopt (i.e., on or after May 22, 2017), the non-Rule authority's general concern with timeliness is not necessarily so limited.” Id. at *8.
So, it may be proper for a court to deny a motion to transfer if brought close to trial
But the Fed. Cir. declines to set up framework, only pointing to only denials of mandamus for examples

25. In Re Micron Tech. applied
Treehouse Avatar LLC v. Valve Corp., Case No. 15-cv-427, 2017 WL (D. Del. Nov. 20, 2017)  magistrate recommended transfer to W.D. Wash.
Rillito River Solar v. Wencon Dev. Inc., Case No. 16-cv-03245, 2017 WL , (D. Ariz. Nov. 21, 2017)  transferred to N.D. Cal.
But see Intellectual Ventures II LLC, c. Fedex Corp. et. al. Case No. 2:16-CV JRG, 2017 WL , at (E.D. Tex. Nov. 22, 2017)  venue objection waived based on conduct, and regardless facts demonstrate venue proper

26. Case Law on REPOB
Regular and Established Place of Business is second way to establish venue
Raytheon Co. v. Cray, Inc.  overturned by. . .
In Re Cray Inc.
Post Consumer Brands, LLC v. Gen. Mills, Inc.
Billing Network Patent, Inc. v. Modernizing Med., Inc.

27. Raytheon Company v. Cray, Inc.
Case No. 15-cv-1554, 2017 WL (E.D. Tex June 29, 2017)
Denied motion to transfer because defendant committed acts of infringement and has a regular and established place of business in the district.
“Because Raytheon alleges Mr. Harless made offers to sell within the Eastern District of Texas while he was working for Cray, Mr. Harless’s offers to sell are considered acts of infringement.” – No need to be tied to defendant’s place of business. Id. at *6.
Examines four factors to ascertain “regular and established place of business”: Physical Presence, Defendant’s Representations, Benefits Received, Target Interaction with District. Id. at *11-13.

28. In Re Cray In Re Cray, Inc., 871 F.3d 1355 (Fed. Cir. 2017)
Cray petitioned for mandamus
Held: D.C. “misinterpreted scope and effect of precedent in determining “a regular and established place of business”
Facts:
No office space or any property in E.D. Tex.
Two employees who worked from home in Tex. Senior Territory manager and sales exec
No products or literature at employees homes
Three Part Test:
Physical place in the district (not virtual);
Regular and established place of business (not sporadic activity); and
Must be the place of defendant (not solely a place of an employee)

29. Post Consumer Brands, LLC v. General Mills, Inc.
Case No. 17-cv-2471, 2017 WL (E.D. Mo. Oct. 27, 2017)
MTD for improper venue or transfer
Defendants incorporated in Del.
In Re Cray three part test applied to Hannibal plant owned by different General Mills entity named General Mills Operations, LLC
Court: “[E]xcept where corporate formalities are ignored and an alter ego relationship exists, the presence of a corporate relative in the district does not establish venue.” Id. at *2.
No claim here
Court: Defendants’ handful of employees and contractors does not satisfy “physical” place of business. Id. at *2.
Transferred to D. Minn.

30. BillingNetwork Patent, Inc. v. Modernizing Med., Inc.,
Case No. 17-cv-5636, 2017 WL (N.D. Ill. Nov. 6, 2017)
MTD for improper venue
Defendant incorporated in Delaware but registered to do business in Illinois
Applying Cray’s test:
“That a defendant is registered to do business in a particular state has no bearing on whether it has the requisite ‘physical place’ of business in the state, let alone in a particular judicial district.” Id. at *2.
“Ultimately, the facts here ’merely show that there exists within the district a physical location where an employee of the defendant carries on certain work for his employer. ‘… That is not the same as Defendant having a regular and established place of business in this District.” Id. at *3.
No transfer because not requested and not briefed

31. Practical Implications & Additional Thoughts
Where to file
Busier dockets
Case Implications

32. Plaintiff’s Perspective: Where to File?
More restricted choice of forum
Pleading venue is less boilerplate
Analyze personal jurisdiction and venue separately
Repercussions otherwise: litigating over venue  more expense for client

33. Docket Impact
Source: Fried Frank – Into the Heartland Alert:

34. Docket Impact
Source: The Effect of TC Heartland on Patent Venue, Michael C. Smith. 55th Annual Conference of Property Law

35. Delaware Incorporations
Delaware Division of Corporations 2015 Annual Report listed:
1,181,00 legal entities incorporated in Delaware
66% of Fortune 500 companies are incorporated there
Source: Bullock, J.W., Delaware Division of
Corporations 2015 Annual Report, p. 1, retrieved at

36. Top Defendants Not Incorporated in Delaware
Samsung Electronics America, Inc. (#1 top defendant in 2016)  New York
LG Electronics, Inc.  California
Apple Inc.  California
Microsoft Corporation  Washington
HTC America, Inc.  Washington

37. Additional Impacts and Comments
Impact on JDGs
Impact on case length
LLC Issue
Personal Jurisdiction