United States District Court, D. Delaware
ORDER ON MOTION TO DISMISS FOR IMPROPER
A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE.
wastewater treatment system manufacturer moves to dismiss a
patent infringement suit brought by a patent trust, arguing
improper venue. Based on intervening caselaw from the United
States Supreme Court in TC Heartland LLC v. Kraft Foods
Group Brands LLC, 137 S.Ct. 1514 (2017), because the
defendant's characteristics do not meet the statutory
requirements as interpreted by the Supreme Court for proper
venue in a patent infringement action, the Court finds that
venue in the District of Maine is improper. Concluding that
transfer of the case is in the interest of justice and that
the District of Delaware is the proper venue for this action,
the Court transfers the case to the District of Delaware.
February 22, 2017, Presby Patent Trust (Presby) filed suit
alleging that Infiltrator Water Technologies, LLC and
Infiltrator Systems, Inc. (collectively Infiltrator)
infringed two of its patents. Compl. (ECF No. 1). On
April 28, 2017, Infiltrator moved to dismiss for improper
venue pursuant to Federal Rule of Civil Procedure 12(b)(3)
and 28 U.S.C. § 1406(a). Defs.' Mot. to Dismiss
for Improper Venue (Defs.' Mot.) (ECF No.
14). In the alternative, Infiltrator requested that the Court
defer ruling on the motion until the Supreme Court issued a
decision in a case Infiltrator argued would control- TC
Heartland LLC v. Kraft Foods Group Brands LLC. Id. at 7.
Infiltrator attached three exhibits. Id. Attachs.
1-3. Presby filed its opposition on May 18, 2017.
Pl.'s Obj. to Defs.' Mot. to Dismiss for Improper
Venue (Pl.'s Opp'n) (ECF No. 15). On
May 22, 2017, the Supreme Court issued its decision in TC
Heartland. Infiltrator replied to Presby's
opposition on June 1, 2017, attaching a copy of the TC
Heartland opinion. Defs.' Reply in Supp. of its
Mot. to Dismiss for Improper Venue (Defs.'
Reply) (ECF No. 16); Defs.' Reply Attach.
Relevant Factual Allegations
is a corporation organized and existing under the laws of the
state of Delaware. Defs.' Mot. at 3. Its
headquarters and principal place of business are located in
Old Saybrook, Connecticut. Compl. ¶ 2;
Defs.' Mot. at 3. Infiltrator has sold, through
Maine distributors or otherwise, products and systems that
infringe patents held by the plaintiff, or has caused the
installation of products and systems, the use of which
infringes patents held by the plaintiff, within the state of
Maine. Compl. ¶¶ 5, 23. Specifically,
Infiltrator has directly infringed Presby's patents by
making, using, importing, selling, and/or offering to sell
its Advanced Leachfield Treatment (ATL) product.
Compl. ¶¶ 27, 29. Infiltrator has
indirectly infringed the patents by inducing its customers to
directly infringe the claims of those patents or by knowingly
providing an infringing product (the ATL) that has no
substantial non-infringing uses. Compl. ¶¶
motion, Infiltrator argues that the plain language of the
relevant venue statutes and Supreme Court precedent at the
time of the filing make clear that 28 U.S.C. § 1400(b)
is the specific, unique provision that exclusively governs
venue in patent infringement cases. Defs.' Mot.
at 1-2, 4.
argues that Presby's reliance in its Complaint on the
more expansive, general venue statute, 28 U.S.C. § 1391,
is misplaced. Id. at 1. Infiltrator acknowledges
that the Federal Circuit endorsed borrowing the definition of
corporate residence from § 1391(c) in patent
infringement suits in its opinion in TC Heartland.
Id. at 1-2 (citing In re TC Heartland LLC,
821 F.3d 1338, 1341 (Fed. Cir. 2016)). However, Infiltrator
asserts that the Federal Circuit ruled incorrectly and
predicted that the Supreme Court, which at the time of
Infiltrator's filing had granted certiorari in that case,
would reverse. Id. at 1-2, 4, 5-7; see In re TC
Heartland LLC, 821 F.3d 1338 (Fed. Cir. 2016), cert
granted, 137 S.Ct. 614 (U.S. Dec. 14, 2016) (No.
claims that applying § 1400(b) to the facts in this case
reveals that venue is improper in the District of Maine. The
statute provides that, for patent infringement actions, venue
is proper only in a judicial district “(1) where the
defendant resides, or (2) where the defendant has committed
acts of infringement and has a regular and established place
of business.” Id. at 4. In applying §
1400(b), Infiltrator quotes Fourco Glass Company v.
Transmirra Products Corporation, 353 U.S. 222, 226
(1957): “28 U.S.C. § 1400(b) is the sole and
exclusive provision controlling venue in patent infringement
actions, and that it is not to be supplemented by the
provisions of 28 U.S.C. § 1391(c).” 353 U.S. at
229. Infiltrator also cites the Supreme Court's holding
in Fourco that, with respect to corporations, the
phrase “where the defendant resides” in §
1400(b) means “the state of incorporation only.”
Id. at 226. Infiltrator asserts that, because it is
not incorporated in Maine, the first clause of § 1400(b)
does not support proper venue in the District of Maine.
Defs.' Mot. at 3.
goes on to point out that the test in the second clause is
equally inapplicable in this case because Infiltrator does
not have “a regular and established place of
business” in Maine. In support of this assertion,
Infiltrator states that it does not maintain, own, or lease
any offices, facilities, retail locations, warehouses, or
other property of any kind in the state of Maine.
Id. at 3. Infiltrator accepts all orders from its
regular place of business in Old Saybrook, Connecticut, and
it ships orders to its customers from manufacturing and
warehouse facilities located outside of Maine. Id.
The only presence of any kind that Infiltrator claims to have
in Maine is one employee who resides in the state and works
remotely from his own home by personal choice, not at the
request of or for the business purposes of Infiltrator.
Id. at 3 n.4. That employee is not involved in the
sale or advertisement of Infiltrator products within Maine,
and he does not keep an inventory of products at his home,
nor does he provide technical consulting to any customers
located in Maine. Id. It argues that this one
employee working remotely from home does not constitute a
“regular and established place of business.”
Id. Therefore, Infiltrator concludes, § 1400(b)
does not support proper venue in the District of Maine.
Section 1400(b) being the exclusive provision governing venue
in cases of this sort, venue is improper here.
does not dispute Infiltrator's arguments about how §
1400(b), under Fourco, would apply to the facts of
this case. Nor does it dispute any of Infiltrator's
assertions about its presence (or lack thereof) in Maine.
Instead Presby argues that Fourco is dead letter and
bases its opposition upon disputing the proposition that
§ 1400(b) is to be read without reference to §
1391(c) in interpreting where a corporate defendant
“resides” for purposes of determining proper
venue in patent infringement cases.
writes that “Fourco has not been controlling
precedent for years, ” Pl.'s Opp'n at
1, and that, as such, the broad definition of corporate
“residency” in § 1391(c) should be borrowed
to give meaning to § 1400(b)'s reference to where a
defendant “resides.” In support, Presby cites the
Federal Circuit's decision in In re TC Heartland
LLC, (then under review by the Supreme Court), as well
as another Federal Circuit case, VE Holding Corporation
v. Johnson Gas Appliance Company, 917 F.2d 1574, 1578
(Fed. Cir. 1990).Pl's. Opp'n at 2-7. It
goes on ...