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Koninklijke Philips N.V. v. Asustek Computer Inc.

United States District Court, D. Delaware

July 19, 2017

KONINKLIJKE PHILIPS N.V. and U.S. PHILIPS CORPORATION, Plaintiffs,
v.
ASUSTeK COMPUTER INC. and ASUS COMPUTER INTERNATIONAL, Defendants. MICROSOFT CORPORATION, Intervenor-Plaintiff,
v.
KONINKLIJKE PHILIPS N.V., U.S. PHILIPS CORPORATION, Intervenor-Defendants. KONINKLIJKE PHILIPS N.V., U.S. PHILIPS CORPORATION, Intervenor- Defendants/Counterclaim Plaintiffs in Intervention
v.
MICROSOFT CORPORATION, Intervenor- Plaintiff/Counterclaim Defendant in Intervention AND MICROSOFT Mobile Inc. Counterclaim Defendant Intervention KONINKLIJKE PHILIPS N.V. and U.S. PHILIPS CORPORATION, Plaintiffs,
v.
HTC CORP. and HTC AMERICA, INC. Defendants. KONINKLIJKE PHILIPS N.V. and U.S. PHILIPS CORPORATION, Plaintiffs,
v.
VISUAL LAND INC., Defendant. MICROSOFT CORPORATION, Intervenor-Plaintiff,
v.
KONINKLIJKE PHILIPS N.V., U.S. PHILIPS CORPORATION, Intervenor-Defendants. KONINKLIJKE PHILIPS N.V., U.S. PHILIPS CORPORATION, Intervenor- Defendants/Counterclaim Plaintiffs in Intervention
v.
MICROSOFT CORPORATION, Intervenor- Plaintiff/Counterclaim Defendant in Intervention AND MICROSOFT Mobile Inc. Counterclaim Defendant Intervention U.S. PHILIPS CORPORATION, Plaintiffs,
v.
SOUTHERN TELECOM INC., Defendant. KONINKLIJKE PHILIPS N.V. and . U.S. PHILIPS CORPORATION, Plaintiffs,
v.
DOUBLE POWER TECHNOLOGY INC., ZOWEE MARKETING CO., LTD., SHENZEN ZOWEE TECHNOLOGY CO., LTD., Defendants. MICROSOFT CORPORATION, Intervenor-Plaintiff,
v.
KONINKLIJKE PHILIPS N.V., U.S. PHILIPS CORPORATION, Intervenor-Defendants. KONINKLIJKE PHILIPS N.V. and U.S. PHILIPS CORPORATION, Plaintiffs,
v.
YIFANG USA, INC., d/b/a E-FUN, INC., Defendant. KONINKLIJKE PHILIPS N.V. and U.S. PHILIPS CORPORATION, Plaintiffs,
v.
ACER INC. and ACER AMERICA CORPORATION, Defendants.

          MEMORANDUM

         I. INTRODUCTION

         Presently before the court in the above-captioned related patent infringement actions is Defendants' Joint Motion to Transfer, seeking to transfer for improper venue under 28 U.S.C. § 1406(a), or alternatively to transfer all of the actions to the Northern District of California under 28 U.S.C. § 1404(a).[1] (D.I. 166) Additionally, Microsoft Corporation and Microsoft Mobile Inc. ("Microsoft") filed a Motion to Transfer venue to the Northern District of California pursuant to 28 U.S.C. § 1404(a) that is before the court. (D.I. 173.)[2] For the reasons set forth below, the court will deny Defendants' Joint Motion to Transfer and Microsoft's Motion to Transfer.

         II. BACKGROUND

         The plaintiffs Koninklijke Philips N.V. and U.S. Philips Corporation (collectively, "Philips") initiated patent infringement lawsuits against ASUSTeK Computer Inc. et al., HTC Corp. et al. ("HTC"), Visual Land Inc., Southern Telecom Inc., Double Power Technology Inc. et al., YiFang USA, Inc., and Acer Inc. et al. (collectively, "the defendants") between December 7, 2015 and December 18, 2015.[3] On March 8, 2016, defendants filed jointly-administered contemporaneous motions to dismiss for improper venue under Rule 12(b)(3) and 28 U.S.C. § 1406(a). (D.I. 12.) On April, 11, 2016, Philips filed First Amended Complaints in these cases, alleging infringement against defendants on either nine or ten asserted patents. (D.I. 18.)

         On June 22, 2016 defendants withdrew their respective motions to dismiss for lack of venue in light of the Federal Circuit's decision in In re TC Heartland, 2016 U.S. App. LEXIS 7753 (Fed. Cir. Apr. 29, 2016). (D.I. 31.) The court entered a Scheduling Order in all of the related cases on September 15, 2016 setting forth all dates leading up to trial. On November 23, 2016, Philips filed a Second Amended Complaint asserting infringement of an additional patent. (D.I. 76.) On December 22, 2016, defendants filed answers to the Second Amended Complaint. (D.I. 87.)

         The court held a claim construction hearing on May 3, 2017. On June 6, 2017, Microsoft filed a motion to transfer venue to the Northern District of California. (D.I. 173.) On July 11, 2017, the court issued a claim construction order, construing the terms from the patents-in-suit. (D.I. 212.)

         III. LEGAL STANDARDS

         Federal Rule of Civil Procedure 12(b)(3) allows a defendant make a motion to dismiss for improper venue. Upon such a motion, the district court must determine whether venue is proper according to the appropriate statutes. See Reed v. Weeks Marine, Inc., 166 F.Supp.2d 1052, 1054 (E.D. Pa. 2001); see also Kerobo v. Southwestern Clean Fuels Corp., 285 F.3d 531, 538 (6th Cir. 2002). The movant has the burden of proving that venue is improper in the selected forum. See Myers v. American Dental Ass'n, 695 F.2d 716, 724 (3d Cir. 1982).

         Section 1406(a) provides that: "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a). In patent infringement actions, venue is proper "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." 28 U.S.C. § 1400(b); see TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514, 1516 (2017). In TC Heartland, 137 S.Ct. at 1517, the Supreme Court reaffirmed its decision in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 226 (1957), holding "that a domestic corporation 'resides' only in its State of incorporation for purposes of the patent venue statute."

         Under 28 U.S.C. § 1404(a), a district court has "broad discretion to determine, on an individualized, case-by-case basis, whether the convenience and fairness considerations weigh in favor of transfer." Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir. 1995). The court engages in a two-step inquiry. It first determines whether the action could have been brought originally in the proposed transferee forum and then asks whether transfer would best serve the convenience of the parties and witnesses as well as the interests of justice. Smart Audio Techs., LLC v. Apple, Inc., 910 F.Supp.2d 718, 725 (D. Del. 2012). It is the defendant's responsibility to demonstrate that transfer is appropriate at each step, Jumara, 55 F.3d at 879-80, and, "unless the balance of convenience of the parties is strongly in favor of defendant, the plaintiffs choice of forum should prevail." Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970).

         IV. DISCUSSION

         Defendants argue that the actions should be transferred for improper venue because the defendants neither "reside []" nor "ha[ve] a regular and established place of business" within the District of Delaware. (D.I. 167 at 4-5.) In response, Philips argues that defendants "expressly and irrevocably" waived their defense of improper venue. (D.I. 191 at 2, 8-12.) The court agrees with Philips.

         A defense of improper venue may be waived because of a party's conduct that is inconsistent with asserting the privilege. See Wyrough Loser, Inc. v. Polmor Labs., Inc., 376 F.2d 543, 546 (3d Cir. 1967) ("defendant may waive the [venue] defense by action or conduct other than his voluntary appearance."); Davis v. Smith, 253 F.2d 286, 288 (3d Cir. 1958) ("The underlying theory of waiving venue or consenting to suit is that the litigant performs some act which indicates to the court that he elects not to raise his privilege of venue."). Federal Circuit precedent also makes clear that "[a] defendant may waive such affirmative defenses by actively litigating the suit, even where the defenses are properly included in the defendant's answer." United States v. Ziegler Bolts & Parts Co., 111 F.3d 878, 882 (Fed. Cir. 1997).[4]

         Here, defendants waived any challenge to venue in this court through their conduct actively litigating this case since December 2015. On June 22, 2016, defendants voluntarily and expressly withdrew their original pending motion to dismiss for improper venue under Rule 12(b)(3) following the Federal Circuit's TC Heartland,821 F.3d 1338 (Fed. Cir. 2016) decision. (D.I. 31.) Defendants' subsequent conduct further demonstrated abandonment of the venue defense. Following withdrawal of the motion, defendants: (1) participated in a scheduling conference; (2) conducted discovery, (3) entered into a stipulation and protective order with the plaintiff; and (4) moved the court to allow their out of state counsel to appear pro hac vice. See Plunkett v. Valhalla Inv. Servs., Inc., 409 F.Supp.2d 39, 41 (D. Mass. 2006) (finding that a defendant had abandoned defense of improper venue based on ostensible conduct which demonstrated consent to venue in the district). ...


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