According to the Eastern District of Texas, no. In our continued post-TC Heartland coverage, for the purpose of establishing venue, courts typically will decline to treat the place of business of one corporation as the place of the business of the other, even when the two are related, so long as a formal separation of entities is preserved.
Andrew DeVoogd is a Member in the firm and is based in our Boston office. He focuses on patent litigation, particularly concerning Section 337 investigations in the International Trade Commission, and has participated in all phases of numerous high-stakes ITC investigations involving some of the largest technology companies in the world. Drew has also litigated patent infringement cases and other complex business disputes in federal district courts across the United States. In addition, he provides strategic counseling to help clients protect and leverage IP rights to maximize their value.
A recent order from the Northern District of California provides some succinct guidance on the relevancy of discovery concerning litigation funding. In Space Data Corp. v. Google LLC, 5-16-cv-03260, the court denied Defendants Google and Alphabet’s motion to compel discovery as to potential litigation funding allegedly considered by Plaintiff Space Data.
Space Data sued Google and its patent company Alphabet over Google’s Project Loon – an Internet-beaming balloon initiative. Space Data alleged that Google unlawfully used confidential information and trade secrets disclosed during their partnership discussion in 2007 and claimed that Google infringed three of Space Data’s U.S. patents.
According to a recent decision from the Southern District of New York, no. In our continued post-TC Heartland coverage, the court in CDX Diagnostic, Inc. v. U.S. Endoscopy Group, Inc. clarified that a storage unit does not qualify as a regular and established place of business. Specifically, retrieving materials from a storage unit does not qualify as actually engaging in business activity. While a storage unit is of course a physical place in the district, the plaintiffs failed to meet their burden to prove that the defendant engaged in any business in or from the storage unit.
A recent opinion from the District of New Jersey is a cautionary tale for patent practitioners regarding conduct during patent prosecution that can be framed as bad faith. This can become an expensive misstep during subsequent litigation. In Howmedica Osteonics Corp. v. Zimmer, Inc. et al., 2-05-cv-00897, the court granted defendant Zimmer, Inc.’s (“Zimmer”) motion for over $13 million in attorney fees and costs under 35 U.S.C. § 285 over plaintiff Howmedica Osteonics Corp.’s (“Howmedica”) argument that its actions did not support a finding of an exceptional case.
A recent order from the Northern District of California provides patent practitioners interesting guidance regarding conduct during licensing discussions—and may be a cautionary tale to potential licensors engaged in efficient infringement. In Finjan, Inc. v. SonicWall, Inc., 5-17-cv-04467, the court denied the defendant SonicWall’s motion to dismiss the plaintiff Finjan, Inc.’s (“Finjan”) willfulness allegations. Finjan alleges both that SonicWall infringes ten of Finjan’s patents covering behavior-based and antimalware security, and also that SonicWall’s infringement was willful because it engaged in insincere licensing discussions in order to intentionally delay the infringement litigation.
In another interesting development in our ongoing coverage of the application of the TC Heartland patent venue standard by lower courts, the District Court for the Western District of Texas recently determined that when a parent company ratifies its subsidiary company’s place of business, it can be considered a “regular place of business” for purposes of establishing proper venue. In Board of Regents, The University of Texas System, and Tissugen, Inc.v. Medtronic PLC, Medtronic, Inc., and Tyrx, Inc., Cause No. A-17-CV-0942-LY (May 17, 2018 W.D. TX), it was undisputed that neither defendant was incorporated in the Western District of Texas. As such, the Court looked to whether either business maintained a regular and established business within the district, and concluded that Medtronic did.
In our continuing coverage of the post-TC Heartland landscape, the Federal Circuit recently clarified that venue is proper in only one district per state in In re BigCommerce, Inc., 2018-122 (Fed. Cir. May 15, 2018) (slip op.). Last year, the Supreme Court held in TC Heartland that a company resides where it is incorporated. Among the many unresolved questions flowing from that decision involved the treatment of patent venue in states with multiple districts. Specifically, no appellate court had determined whether a domestic corporation incorporated in a multi-district state “resides” only in the single judicial district where it maintains a principal place of business or registered office, or whether venue could be proper in all judicial districts within that state.
In a May 10, 2018 ruling, discussed earlier on this blog, Magistrate Judge Payne affirmed the jury’s willfulness finding largely on the ground that TCL did not proffer any evidence that it held a subjective, good faith belief that it did not infringe the patent-in-suit or that the patent was invalid. The fact that TCL filed over a dozen petitions for inter partes review of the asserted patents did not mean, as a matter of law, that TCL held such a subjective, good faith belief. The ruling demonstrates the importance, post-Halo, of alleged infringers performing their own investigation of allegations against them – mere pleadings taking non-infringement or invalidity positions may not suffice to defeat a willfulness allegation. Continue Reading Willfulness Finding in EDTX Ruling in <i>TCL v. Ericsson</i> Illustrates the Risk to Accused Infringers of Failing to Investigate Allegations
On May 10, 2018, Magistrate Judge Payne reconsidered his previous March 2018 order which had vacated a jury award, and granted plaintiff Ericsson’s motion for reconsideration. The May ruling makes clear that the accused infringer bears the burden of production for royalty-stacking and other mitigatory arguments on damages. Whereas the March ruling excluded Ericsson’s damages expert for failing to account properly for the royalty stack on the accused products that his damages theory implied, the May ruling scrutinized the record and found that TCL had failed to submit any evidence into the record that would support even a jury instruction on royalty stacking. The decision underscores the importance of developing an affirmative record in support of each element of a damages theory or counter-theory.
The ruling also stands in stark relief to Judge Selna’s 2017 ruling in the Central District of California case between the parties. There, Judge Selna determined that approximately $20 million would represent a fair, reasonable, and non-discriminatory (FRAND) royalty for TCL’s infringement of Ericsson’s worldwide portfolio of patents declared essential to various telecommunications standards (SEPs) – thousands of patents that, the parties agreed, represented a significant share of the value of the technology in those standards.
Further to our ongoing coverage of post-TC Heartland patent litigation, in a recent case in the Western District of Wisconsin, the court granted defendants’ motion to transfer for improper venue. In doing so, it rejected the plaintiff’s contention that venue can be proper where one corporation “works closely” with another corporation resident in the jurisdiction.
In Unity Opto Technology Co. Ltd. v. Lowe’s Home Centers LLC and LG Sourcing, Inc., 18-cv-27-jdp (W.D. Wis.) (May 4, 2018), co-defendant Lowe’s Home Centers has a place of business in the district, namely a physical store located in Plover, Wisconsin. However, co-defendant LG Sourcing does not own, lease, maintain, or operate any facilities in the district, nor does LG Sourcing employ any residents that reside in the district either.