United States District Court, D. Delaware
BOSTON SCIENTIFIC CORPORATION and BOSTON SCIENTIFIC SCIMED, INC., Plaintiffs,
COOK GROUP INCORPORATED and COOK MEDICAL LLC, Defendants.
L. Pascale and Pilar G. Kraman, YOUNG CONAWAY STARGATT &
TAYLOR, Wilmington, DE Matthew M. Wolf, Edward Han, Marc A.
Cohn, Amy DeWitt, Nicholas Nyemah, Patrick Reidy, and Tara
Williamson, ARNOLD & PORTER KAYE SCHOLER LLP, Washington,
DC Assad H. Rajani, ARNOLD & PORTER KAYE SCHOLER LLP,
Palo Alto, CA Ryan Nishimoto and Marty Koresawa, ARNOLD &
PORTER KAY SCHOLER LLP, Los Angeles, CA Attorneys for
E. Moore, Bindu A. Palapura, and Stephanie E. O'Byrne,
POTTER ANDERSON & CORROON LLP, Wilmington, DE Dominic P.
Zanfardino, Bradley G. Lane, Jeff Nichols, Jason W.
Schigelone, James M. Oehler, Andrew S. McElligott, David L.
Bernard, and Andrea L. Shoffstall, BRINKS GILSON & LIONE,
Chicago, IL Attorneys for Defendants.
U.S. DISTRICT JUDGE
before the Court is Defendants Cook Group Incorporated
("CGI") and Cook Medical LLC's ("Cook
Medical") (collectively, "Defendants" or
"Cook") motion to dismiss for improper venue or,
alternatively, to transfer venue in light of the Supreme
Court's decision in TC Heartland LLC v. Kraft Food
Group Brands LLC, 137 S.Ct. 1514 (2017). (D.I. 282)
undisputed that after TC Heartland, which held that
a corporate defendant "resides" only in its state
of incorporation for purposes of determining where venue is
proper in a patent case, see 28 U.S.C. §
1400(b), Defendants, who are not Delaware corporations, can
no longer be said to "reside" in Delaware. TC
Heartland did not, however, address the second prong of
§ 1400(b), which makes venue proper in a district
"where the defendant has committed acts of infringement
and has a regular and established place of business."
After reviewing thorough briefing and hearing oral argument,
the Court finds that Defendants do not have a "regular
and established place of business" in Delaware.
Therefore, the Court concludes that venue is improper in
Delaware for this action. Accordingly, the Court will grant
Defendants' motion and transfer this case to the United
States District Court for the Southern District of Indiana,
a patent infringement action brought by Plaintiffs Boston
Scientific Corporation ("BSC") and Boston
Scientific SciMed, Inc. ("BSSI") (collectively,
"Plaintiffs" or "Boston Scientific"),
alleging that Defendants infringe U.S. Patent Nos. 8, 685,
048; 8, 709, 027; 8, 974, 371; and 9, 271, 731, which
generally describe and claim a hemostatic clip apparatus and
methods for using such clip, for example, to stop
gastrointestinal bleeding. (D.I. 19 at ¶¶ 1, 10)
a Delaware corporation with its principal place of business
in Marlborough, Massachusetts. (D.I. 19 at ¶ 2) It
develops, manufactures, and supplies medical devices,
including endoscopic products for the treatment of diseases
of the digestive system, such as its Resolution™ Clip.
(Id. at ¶¶ 2, 10) BSSI is a Minnesota
corporation with its principal place of business in Maple
Grove, Minnesota. (Id. at ¶ 3) A wholly-owned
subsidiary of BSC, BSSI develops and manufactures endoscopic
products, including hemostatic clips distributed by BSC.
(Id.) BSSI is the owner by assignment of the
an Indiana corporation with its principal place of business
in Bloomington, Indiana. (Id. at ¶ 4) It is
alleged to be a major competitor of Plaintiffs in the
endoscopic hemostatic clip market. (Id. at ¶
15) Cook Medical is an Indiana limited liability company that
also has its principal place of business in Bloomington.
(Id. at ¶ 5) It, too, is alleged to be a major
competitor of Plaintiffs in the endoscopic hemostatic clip
market, and it has sold the Instinct™ Endoscopic
Hemoclip since at least 2013. (Id. at ¶ 15;
D.I. 52 at 4)
initiated this action on October 27, 2015, alleging that
Defendants infringed three of the patents-in-suit. (D.I. 1)
On March 9, 2016, Plaintiffs filed an amended and
supplemental complaint for infringement as to all four
patents. (D.I. 19) On July 15, 2016, Defendants filed an
amended answer and counterclaims seeking declaratory judgment
of noninfringement and invalidity of each of the asserted
patents. (D.I. 52 at 15-17) Then, on December 19, 2016,
Defendants filed a motion to stay pending inter
partes reviews ("IPR"). (D.I. 74) That motion
was initially denied without prejudice to renew at a time
after the United States Patent and Trademark Office's
Patent Trial and Appeal Board ("PTAB") decided
whether to institute review on the IPR petitions at issue.
After the PTAB's institution of IPR proceedings on many
of the asserted claims, Defendants renewed their motion to
stay on May 22, 2017. (D.I. 254) On August 16, 2017, the
Court granted the motion to stay but excluded from the stay,
inter alia, any efforts necessary for resolution of
the instant motion. (D.I. 304 at 22)
meantime, on April 28, 2017, Defendants filed a motion for
leave to file an amended pleading, seeking to add a defense
and counterclaim of inequitable conduct. (D.I. 218) After
that motion was denied without prejudice on June 2, 2017
(D.I. 268), Defendants filed a renewed motion for leave to
file an amended pleading on June 9, 2017 (D.I. 274). In
addition to the inequitable conduct defense and counterclaim,
this latest proposed amended pleading seeks to plead improper
venue in light of the Supreme Court's decision in TC
Heartland, which was issued on May 22, 2017.
filed their improper venue motion on June 22, 2017, seeking
dismissal or, in the alternative, transfer of this action to
the Southern District of Indiana, pursuant to Federal Rule of
Civil Procedure 12(b)(3) and 28 U.S.C. § 1406. (D.I.
282) They contend that venue is not proper under either prong
of § 1400(b). (Id.) Briefing on the motion was
initially complete as of July 27, 2017 (see D.I.
283, 296, 298), although supplemental submissions have been
filed (D.I. 307, 310, 312). The Court heard oral argument on
August 24, 2017. (See Transcript
"venue provisions are designed, not to keep suits out of
the federal courts, but merely to allocate suits to the most
appropriate or convenient federal forum." Brunette
Mach. Works, Ltd. v. Kockum Indus., Inc., 406 U.S. 706,
710 (1972). Rule 12(b)(3) authorizes a party to move to
dismiss a lawsuit for improper venue. When such a motion is
filed, the Court must determine whether venue is proper in
accordance with the applicable statutes. See Albright v.
W.L. Gore&Assocs., Inc., 2002 WL 1765340, at *3 (D.
Del. July 31, 2002). Venue in apatent infringement action is
governed solely and exclusively by the patent venue statute,
28 U.S.C. § 1400(b). See TC Heartland, 137
S.Ct. at 1516. The general venue statute, 28 U.S.C. §
1391(c), does not have any application in a patent case.
See Id. at 1521.
Court grants a Rule 12(b)(3) motion based on improper venue,
the Court "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. §
"it is not necessary for the plaintiff to include
allegations in his complaint showing that venue is
proper." Great W. Mining & Mineral Co. v. ADR
Options, Inc., 434 F.App'x 83, 86-87 (3d Cir. 2011).
Hence, when confronted with a motion to dismiss for improper
venue, the Court may consider both the complaint and evidence
outside the complaint. See 14D Wright & Miller,
Federal Practice & Procedure § 3826 (4th ed. 2017).
The Court will accept any venue-related allegations in the
complaint as true, unless those allegations are contradicted
by the defendant's affidavits. See Bockman v. First
Am. Mktg. Corp., 459 F.App'x 157, 158 n.l (3d Cir.
2012); In re First Solar, Inc. Derivative Litig.,
2013 WL 817132, at *2 (D. Del. Mar. 4, 2013). In addition,
the Court may consider affidavits submitted by the plaintiff.
See Bookman, 459 F.App'x at 161 (affirming
District Court's dismissal of complaint "because
Defendants satisfied their burden of showing improper venue
by offering evidence that the wrongful acts alleged in the
Complaint did not occur in Pennsylvania, and Plaintiffs
failed to rebut that evidence").
are not uniform in their views as to which party bears the
burden of proof with respect to venue. Some hold that a
plaintiff must prove that venue is proper in its chosen
district, while others hold instead that a defendant must
prove that such district is an improper venue. See
14D Wright & Miller, Federal Practice & Procedure
§ 3826 (4th ed. 2017) ("There are many cases -
predominantly, but not exclusively, from the Third and Fifth
Circuits - holding that the burden is on the objecting
defendant to establish that venue is improper, because venue
rules are for the convenience and benefit of the
defendant."). At present, it appears the majority view
is that "when the defendant has made a proper objection,
the burden is on the plaintiff to establish that the chosen
district is a proper venue." Id. Notably,
however, the Court of Appeals for the Third Circuit - the
Circuit in which this District is located - has expressly
held that the moving party has the burden of proving that
venue is improper. See Myers v. Am. Dental Ass
'n, 695 F.2d 716, 724 (3d Cir. 1982) ("[O]n a
motion for dismissal for improper venue under Rule 12 the
movant has the burden of proving the affirmative defense
asserted by it."); see also Great W. Mining,
434 F.App'x at 87 ("Because improper venue is an
affirmative defense, the burden of proving lack of proper
venue remains - at all times - with the defendant.").
the parties here are in agreement as to what the Third
Circuit has held with respect to the burden on venue motions,
they disagree as to whether Third Circuit law governs the
pending motion. Plaintiffs contend that Third Circuit law
applies, while Defendants insist that, rather, the Court must
apply the law of the Court of Appeals for the Federal
Circuit. Notably, however, Defendants concede that there is
no Federal Circuit precedent as to either (i) whether Federal
Circuit law controls a motion to dismiss for improper venue,
or (ii) which party bears the burden of proof on such a
do cite to Hoover Group, Inc. v. Custom Metalcraft,
Inc., 84 F.3d 1408 (Fed. Cir. 1996), which observed that
"[v]enue is based on the facts alleged in the
well-pleaded complaint, " id. at 1410 (citing
Dody v. Brown, 659 F.Supp. 541, 544 n.2 (W.D. Mo.
1987); McGhan v. F.C. Hayer Co., 84 F.Supp. 540, 541
(D. Minn. 1949)). But Hoover does not purport to
answer the questions this Court faces now. In
Hoover, the Federal Circuit did not make clear
whether it was applying Federal Circuit law or
regional-circuit law. Nor did Hoover make any statement
as to which party bears the burden of proof on venue issues.
Thus, there appears to be no binding Federal Circuit decision
on these points.
Federal Circuit, when reviewing a district court's
decision, applies the law of the regional circuit where that
district court sits for non-patent issues but applies its own
law for issues of substantive patent law. See In re
Queen's Univ. at Kingston, 820 F.3d 1287, 1290 (Fed.
Cir. 2016). Thus, to determine whether Federal Circuit law
controls which party has the burden here, the Court must
examine whether the issue is one that is unique to patent
matters generally are not considered to be unique to patent
law. See Versata Software, Inc. v. Callidus
Software, Inc., 780 F.3d 1134, 1136 (Fed. Cir. 2015);
Bd. of Trs. of Leland Stanford Junior Univ. v. Roche
Molecular Sys., Inc., 583 F.3d 832, 840 (Fed. Cir.
2009). Still, "a procedural issue that is not itself a
substantive patent law issue is nonetheless governed by
Federal Circuit law if the issue pertains to patent law, if
it bears an essential relationship to matters committed to
[the Federal Circuit's] exclusive control by statute, or
if it clearly implicates the jurisprudential responsibilities
of [the Federal Circuit] in a field within its exclusive
jurisdiction." Midwest Indus., Inc. v. Karavan
Trailers, Inc., 175 F.3d 1356, 1359 (Fed. Cir. 1999)
(internal citations, alterations, and quotation marks
Court's view, the issue of which party bears the burden
of proof on a venue challenge is a procedural, non-patent
issue controlled by the law of the regional circuit. Such a
challenge must comply with, and is brought pursuant to, the
Federal Rules of Civil Procedure. By operation of the Federal
Rules of Civil Procedure, the venue challenge must be brought
in a responsive pleading or as a separate motion under Rule
12(b)(3) - and the burden-of-proof allocation is properly
viewed as simply another procedural aspect of a venue
dispute. A motion for improper venue under Rule 12(b)(3) is
akin to other motions authorized by the Federal Rules of
Civil Procedure, such as Rule 12(b)(6) motions to dismiss for
failure to state a claim and motions for judgment as a matter
of law. The procedural aspects of these types of motions are
controlled by regional-circuit law. See K-Tech
Telecomms., Inc. v. Time Warner Cable, Inc., 714 F.3d
1277, 1282 (Fed. Cir. 2013) ("Because it raises a purely
procedural issue, an appeal from an order granting a motion
to dismiss for failure to state a claim upon which relief can
be granted is reviewed under the applicable law of the
regional circuit."); Finjan, Inc. v. Secure
Computing Corp., 626 F.3d 1197, 1202 (Fed. Cir. 2010)
(reviewing "denial of post-trial motions for JMOL and
new trial under regional circuit law").
venue motions are procedural - and therefore governed by the
law of the regional circuit - is true even though the
substantive questions at issue may be controlled exclusively
by Federal Circuit law. See, e.g., In re TLICommc 'ns
LLC Patent Litig., 823 F.3d 607, 610 (Fed. Cir. 2016)
(applying "regional circuit law to the review of motions
to dismiss for failure to state a claim under Rule
12(b)(6)" on issue of whether Rule 12's plausibility
standard had been met, even where motion to dismiss was based
on purported failure of patentee to claim patent-eligible
subject matter under 35 U.S.C. § 101). Hence, while the
substance of a venue challenge in a patent case will turn on
§ 1400(b), subject matter that is controlled by Federal
Circuit law, the Federal Rules - as opposed to a
patent-unique statute - provide the procedural vehicle for
such a challenge. Cf. Atlas IP, LLC v. Medtronic,
Inc., 809 F.3d 599, 6.04-05 (Fed. Cir. 2015) (applying
Federal Circuit law to issues of finality because applicable
statute, 28 U.S.C. § 1295(a)(1), is unique to patent
the Court will apply Third Circuit law to the procedural
aspects of Defendants' improper venue motion, which
places the burden on Defendants to prove improper venue.
See, e.g., Koninklijke Philips N. V. v. ASUSTeK Comput.
Inc., 2017 WL 3055517, at *2 (D. Del. July 19, 2017);
Graphics Props. Holdings Inc. v. Asus Comput. Int'l,
Inc., 964 F.Supp.2d 320, 324 (D. Del. 2013). However,
all issues of interpretation of § 1400(b), a
patent-specific statute, are controlled by Federal Circuit
law. See Midwest Indus., 175 F.3d at 1359; see
also Tr. at 16 (Defendants agreeing on this point); Tr.
at 61 (Plaintiffs agreeing on this point). Therefore, the
Court will look to Federal Circuit precedent to understand
and apply the provisions of § 1400(b). See In re
Cordis Corp., 769 F.2d 733, 737 (Fed. Cir. 1985).
patent venue statute, 28 U.S.C. § 1400(b), provides:
Any civil action for patent infringement may be brought in
the judicial district  where the defendant resides, or 
[(a)] where the defendant has committed acts of infringement
and [(b)] has a regular and established place of business.
undisputed that under the Supreme Court's decision in
TC Heartland, venue in this case is not proper in
Delaware under the "resides" portion of the
statute, as Defendants are incorporated in Indiana.
Defendants, therefore, each "reside" in Indiana,
parties' disputes are, instead, threefold. First, they
disagree as to whether Defendants have waived their
opportunity to challenge whether Delaware is a proper venue.
Second, assuming Defendants are permitted to press the
improper venue issue, the parties disagree over whether
Defendants have a "regular and established place of
business" in Delaware, which is part of §
1400(b)'s second basis on which venue may be proper.
Finally, the parties also dispute whether, should the Court
be uncertain as to whether Defendants have a "regular
and established place of business" here, the Court
should or should not order "venue-related
discovery." The Court will address each of these issues
main argument in opposition to the instant motion is that
Defendants waived any challenge to venue by failing to object
to venue in any of their pleadings and failing to otherwise
assert improper venue for nearly two years after this case
was filed, all while actively participating in the litigation
(including through discovery, claim construction, and
significant motions practice). (See D.I. 296 at 7-8)
Defendants do not contest the relevant facts underlying
Plaintiffs' argument, but instead argue that waiver is
inapplicable here in light of the Supreme Court's recent
decision in TCHeartland. (See D.I. 283 at 7-11; D.I.
298 at 3-8) In assessing the parties' competing
positions, it is useful to first describe the history of the
underlying legal issues driving the Court's analysis.
noted above, in a patent infringement action, 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). In 1957, the Supreme Court held that
§ 1400(b) was "not to be supplemented by the
provisions of 28 U.S.C. § 1391(c), " the general
venue statute. Fourco Glass Co. v. Transmirra Prods.
Corp.,353 U.S. 222, 229 (1957). As such,
Fourco held that ...