In a recent development from the Eastern District of Texas, Magistrate Judge Roy S. Payne concluded that defendants Globalfoundries, Qualcomm, and Samsung waited too long prior to moving to dismiss or transfer the case due to improper venue (see report and recommendation here). KAIST IP US LLC filed its complaint back in November 2016, and a significant portion of discovery already occurred. Similar to In re Micron (which we previously covered here), defendants reserved the right to challenge venue pending the decision in TC Heartland, in their respective answers to the complaint. However, it was not until September 2017, about four months after the decision in TC Heartland issued, that defendant Globalfoundries affirmatively challenged venue. Qualcomm and Samsung filed similar motions a month later. The defendants argued that “after lengthy negotiations… it become clear that KAIST did not have a legitimate, good faith interest in an agreed transfer to a proper venue.”

MJ Payne disagreed, largely because the parties were already immersed in claim construction briefing. MJ Payne opined that “[g]ranting such untimely motions at this stage of the proceeding would disrupt the efficiency of the judicial process, both here and in the proposed transferee district.” Further, MJ Payne was perplexed as to why defendants sat on their hands for four to five months after the TC Heartland decision to move. Accordingly, the court denied defendants motions to dismiss or transfer venue citing In re Micron (affirming a district court’s ability to find forfeiture when a party does not raise a timely objection to venue). We will continue to track any developments regarding this matter.

Further to our ongoing coverage of the post-TC Heartland patent litigation landscape, a pair of recent and interesting cases from Texas and Delaware further evolved this important venue-related jurisprudence.

On November 22, 2017, in Intellectual Ventures II LLC v. FedEx Corp. et al., Case Number 2:16-cv-00980 (E.D. TX Nov. 22, 2017), Judge Rodney Gilstrap denied defendants’ motion to dismiss for improper venue due to their conduct in view of the Federal Circuit’s recent decision in In re Micron, which determined that TC Heartland was a change in the law, potentially reviving venue-based transfer motions previously waived. (We previously covered the In re Micron case here.) Defendants sought to dismiss the case for improper venue a few days after the denial of their IPR petitions. After they participated actively in litigation for months, the court did not take kindly to defendants’ motion. Citing In re Micron, the court reasoned that “defendants who take a ‘tactical wait-and-see’ approach in objecting to venue present ‘an obvious starting point for a claim of forfeiture.’” Further, the court noted that prior to the TC Heartland decision, defendants sought to transfer the case to the Western District of Tennessee under § 1404 rather than § 1406. Judge Gilstrap noted that this reliance on § 1404 was important because that statute “is premised on venue being proper in the transferor court whereas a motion under § 1406 reflects an objection to the current venue as being proper.” Accordingly, the court concluded that defendants’ waived their venue objection based on their own conduct, the judicial resources already expended, and the prejudice to plaintiff in reopening a dormant venue dispute “simply because it has become convenient for Defendants to litigate the issue now.” Continue Reading Lower Courts Continue to Grapple with Venue in the Wake of In re Micron and In re Cray

In an interesting development in the post-TC Heartland world, it appears that the Federal Circuit will soon answer the question whether the Supreme Court’s venue decision was a change in the law, or merely a course-correction to honor preexisting law. Here, in a case arising out of the Eastern District of New York, the Federal Circuit ordered AlmondNet, Inc., Datonics, LLC, and Intent IQ, LLC to respond to a petition for a writ of mandamus submitted by Yahoo Holdings, Inc.  In its petition, Yahoo argued that the District Court erred in denying its motion to transfer, and specifically that it waived the right to challenge venue on the basis that TC Heartland did not change the law of venue.

Continue Reading Yahoo Asks Federal Circuit to Determine Whether TC Heartland Changed, or Merely Clarified, Venue Rules

The United States Supreme Court decided earlier this year that a 1957 opinion is still valid and still limits venue choices for patent infringement actions under 28 U.S.C. § 1400.  See TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. ___ (2017) (citing Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 226 (1957)).  In its extensively-covered TC Heartland decision issued in May, the Court held that “[a]s applied to domestic corporations, ‘reside[nce]’ in § 1400(b) refers only to the State of incorporation,” where the accused infringer has a “regular and established place of business” in the venue. While framed as merely confirmation of precedent from the 1950s, many practitioners and commentators viewed this decision as a dramatic change in the patent litigation landscape.

Since TC Heartland came down, lower courts have applied the new paradigm in differing ways.  As trends have developed in recent months, we thought it useful to provide a sampling of the various approaches to venue issues post-TC Heartland.  These issues include, for example, whether defendants who did not contest venue prior to the TC Heartland decision waived the defense of improper venue because the case was—or was not—an “intervening change” in the law, and how to assess whether a defendant has regular and established place of business in a particular venue.

Continue Reading Making the Sausage: Lower Courts Grapple With the Supreme Court’s TC Heartland Venue Decision

The Supreme Court’s decision five months ago in TC Heartland v. Kraft Food Group Brands was a sea change in the way courts interpret venue for patent infringement cases.  Since the Federal Circuit’s decision in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), venue in patent infringement cases has been determined using 28 U.S.C. § 1391(c), which equates a corporate defendant’s residence with personal jurisdiction.  In TC Heartland, the Supreme Court effectively abrogated VE Holding by finding that a corporate defendant “resides” only in its State of incorporation for venue purposes.

Continue Reading District Courts Remain Split on TC Heartland and Waiver of Improper Venue Defense