In our continuing post-TC Heartland coverage, the District of Nevada recently identified a key factor in analyzing venue challenges in patent litigation: whether the public can access the defendant corporation or its services in the respective forum. In this case, the defendant did not have any officers, directors, or employees based in Nevada – nor did it have any office, land, facilities, or sales in Nevada.

The court granted the defendant’s motion to transfer for improper venue and rejected plaintiff’s argument that In re Cray’s three-part definition of “regular and established place of business” should not apply to web-based businesses. The Court concluded that in defining a regular and established business the “key inquiry is not whether physical objects are involved, but rather whether the public has access to the defendant corporation through an employee or office located in the district where a suit is brought or if the public directly accesses the services of defendant through a location in the respective forum.” Continue Reading Improper Venue for Web-Based Company in light of <i>In re Cray</i>

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.

Continue Reading Is a “necessary distributor” enough to qualify as a regular and established place of business for purposes of satisfying proper venue?

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.

Continue Reading Can retrieving materials from a storage unit qualify as engaging in business activity for purposes of establishing proper patent venue?

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.

Continue Reading Patent Venue Is Proper Where a Parent Company Defendant “Ratifies” Its Non-Party Subsidiary’s Regular Place of Business in the Forum District

On May 14, 2018, the United States Court of Appeals for the Federal Circuit, In re: ZTE (USA) Inc., No. 2018-113, held that Federal circuit law governs the burden of proof for venue challenges under 28 U.S.C. § 1400(b) and that the burden of proof rests on the plaintiff to demonstrate proper venue upon a defendant’s motion to dismiss for lack of venue. Accordingly, the Federal Circuit granted defendant ZTE USA’s petition for mandamus and vacated an order from the United States District Court for the Eastern District of Texas denying ZTE USA’s motion to dismiss for lack of venue.

Continue Reading Federal Circuit Holds Federal Circuit Law Applies to Patent Venue Challenges and Places Burden on Plaintiffs to Establish Venue

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.

Continue Reading Venue Cannot Be Bootstrapped to a Defendant that Only “Works Closely” with a Resident Corporate Relative Co-Defendant

Further to our ongoing coverage of post-TC Heartland patent litigation, in a recent development from the Northern District of Illinois, the court granted counterclaim defendants’ motion to dismiss for improper venue.  In Shure Incorporated v. ClearOne, Inc., 1-17-cv-03078 (ILND March 16, 2018, Order), the court was blunt in dismissing the plaintiff’s argument regarding the applicability of purported “ancillary” venue.  Plaintiff argued that the doctrine of ancillary venue, where parties are added in conjunction with a compulsory counterclaim are within the court’s supplemental jurisdiction, does not require an independent basis for venue.  The court disagreed, and did not mince words: “[t]his argument is rejected. ClearOne cites no authority for the proposition that the doctrine of ancillary venue (whatever that really is) can override the clear terms of the patent venue statute.”

In properly assessing venue, the court analyzed whether venue was proper under the first part of 28 U.S.C. § 1400(b), which permits a patent infringement action to be brought in the judicial district where the defendant “resides.”  Here, the court dismissed counterclaim defendants’ because both defendants lacked a regular and established place of business in the district.  One defendant was incorporated in Delaware, and the other was based out of California.  The court determined that neither company could be deemed to “reside” in the Northern District of Illinois.

Continue Reading Doctrine of “Ancillary Venue” Does Not Trump <i>TC Heartland</i>

map_2951165992On Monday, January 9, 2017, the U.S. Supreme Court denied, without comment, Mylan Pharmaceuticals’ petition for certiorari to reverse an opinion by the Court of Appeals for the Federal Circuit, which affirmed a broad scope of personal jurisdiction over generic ANDA filers in patent infringement suits under the Hatch-Waxman Act.

Continue Reading Supreme Court Declines to Revisit Broad Personal Jurisdiction Over ANDA Filers

On March 31, 2016, in a blow to the software and entertainment industries, the Federal Circuit denied the International Trade Commission’s (“ITC”) request for a rehearing en banc of the Federal Circuit’s November 10, 2015 decision in ClearCorrect Operating, LLC v. ITC, in which the Federal Circuit found that the ITC’s jurisdiction was limited to “material things” and did not include the ability to bar digital imports.  No. 2014-1527, Slip Op. at 3 (Fed. Cir. Nov. 10, 2015).

Align Technology instituted an ITC investigation in April 2012 claiming that Respondents ClearCorrect Pakistan and ClearCorrect Operating LLC infringed patents relating to technology for repositioning teeth. ClearCorrect made models of the U.S. patients’ teeth which were then scanned and converted into digital data sets, which were then transmitted to Pakistan. In Pakistan the data sets were manipulated and adjusted data sets were sent back to ClearCorrect in the United States.  No physical articles were imported – only a digital data set. In April 2014, the ITC found that ClearCorrect infringed the patents, and issued exclusion and cease and desist orders barring ClearCorrect from importing the data sets.

The case was appealed to the Federal Circuit, and (as we previously discussed here) the panel overturned the Commission’s decision that it had jurisdiction to exclude digital transmissions and items imported digitally. The ITC then petitioned for an en banc rehearing of the case.

Continue Reading Federal Circuit Decides Not to Rehear ClearCorrect Operating, LLC v. ITC, Finding the ITC Does Not Have Jurisdiction over Digital Imports

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On Friday, March 18, the Court of Appeals for the Federal Circuit affirmed two District of Delaware rulings that non-resident defendant generic ANDA filer, Mylan, is subject to personal jurisdiction in two Hatch-Waxman suits filed in the state.  (See Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., No. 14‐935‐LPS (D. Del. Jan. 14, 2015); AstraZeneca AB v. Mylan Pharmaceuticals Inc., No. 14‐696‐GMS (D. Del. Nov. 5, 2014).  For coverage of the oral argument in these appeals, see our prior blog post.)  The Federal Circuit found that specific personal jurisdiction exists over Mylan in Delaware because Mylan’s ANDA filings reliably indicate its intent to engage in actions that will harm plaintiffs’ patent rights in the jurisdiction.  The court did not reach the issue on appeal of whether Mylan’s compliance with Delaware’s registration statute established consent to general personal jurisdiction in the state, an issue on which the lower court opinions split.  However, Judge Kathleen M. O’Malley, concurring in the majority’s judgement, would also have found Mylan consented to general personal jurisdiction in light of Delaware’s interpretation of its registration statute.

Filing an ANDA Satisfies the Minimum Contacts Requirement of Specific Personal Jurisdiction

The court held that “the particular actions Mylan has already taken–its ANDA filings–for the purpose of engaging in that injury-causing and allegedly wrongful marketing conduct in Delaware” satisfy the minimum contacts with Delaware required to establish specific personal jurisdiction.  The court began by observing that, if Mylan had already begun the generic drug marketing activities for which it seeks permission by filing an ANDA, “there is no doubt that it could be sued for infringement in Delaware,” and elsewhere that it seeks to market the generic ANDA products.  Mylan’s ANDA filings, in turn, are “formal acts that reliably indicate plans to engage in” that same infringing activity.  Thus, the ANDA filings, like the contemplated marketing acts they seek approval for, establish personal jurisdiction over Mylan in Delaware.

Continue Reading Federal Circuit Finds Personal Jurisdiction over Mylan in Two Hatch-Waxman Appeals