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S.A. v. HTC Corp.

United States District Court, D. Delaware

December 18, 2017

3G LICENSING, S.A., KONINKLIJKE KPN N.V. and ORANGE S.A., Plaintiffs,
v.
HTC CORPORATION and HTC AMERICA INC., Defendants.

          MEMORANDUM ORDER

          HONORABLE LEONARD P. STARK JUDGE

         Pending before the Court is Defendants HTC Corporation ("HTC Corp.") and HTC America Inc.'s ("HTC America" and collectively with HTC Corp., "HTC" or "Defendants") motion to dismiss (1) both Defendants for improper venue, or, in the alternative, to transfer venue to the Western District of Washington; and (2) HTC Corp. for lack of personal jurisdiction (D.I. 21). Having considered the parties' motion briefing (D.I. 22, 28, 30) and letter briefing in response to the Court's September 11, 2017 Oral Order (D.I. 43, 50, 51, 54, 55), and for the reasons stated below, IT IS HEREBY ORDERED that Defendants' motion to dismiss (D.I. 21) is GRANTED-IN-PART and DENIED-IN-PART.

         The Venue Defense Is Not Untimely

         As an initial matter, Defendants' venue challenge is not untimely. As the Court of Appeals for the Federal Circuit recently held, "[t]he Supreme Court changed the controlling law when it decided TC Heartland[1]in May 2017." In re Micron Tech., Inc., 875 F.3d 1091, 1099 (Fed. Cir. 2017). Therefore, "[t]he venue objection was not available until the Supreme Court decided TC Heartland because, before then, it would have been improper, given controlling precedent, for the district court to dismiss or to transfer for lack of venue." Id. at 1096.

         HTC America is Not a Delaware Resident for Purposes of Patent Venue

         Venue in a patent case for domestic corporations is governed exclusively by 28 U.S.C. § 1400(b), TC Heartland, 137 S.Ct. at 1516, which provides: "[a]ny civil action for patent infringement may be brought 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." For purposes of § 1400(b), a defendant which is a domestic corporation "resides" only in its state of incorporation. See TC Heartland, 137 S.Ct. at 1517. It is undisputed that HTC America - which is incorporated in Washington (D.I. 20 at ¶ 10) - does not "reside" in Delaware.

         Venue is Not Proper in Delaware for HTC America Under the Second Prong of § 1400(b)

         Venue is proper in this District unless HTC America can show that the second prong of § 1400(b) is not satisfied. See Boston Scientific Corp. v. Cook Group Inc.___, F.Supp.3d ___, 2017 WL 3996110, at *4 (D. Del. Sept. 11, 2017) (holding that burden is on party opposing venue). With respect to the second prong's requirement that a defendant have committed "acts of infringement" in the District, it is undisputed that HTC America has sold and offered for sale its allegedly infringing products in Delaware. (See D.I. 22 at 3-5; D.I. 28 at 11) Therefore, Delaware is a proper venue for this lawsuit unless HTC America can meet its burden to show it does not have a regular and established place of business in Delaware. If HTC America can show that that is true, then venue here is improper as to it, and the Court will have to dismiss or transfer this case (at least as to HTC America).

         HTC America has met its burden - and, indeed, Plaintiffs no longer seriously dispute that Delaware is an improper venue as to HTC America. (See D.I. 50 at 2-3; D.I. 54 at 1) In HTC America's sworn declaration, it indicates that it has no physical location or facility in Delaware, and it has no employees located in Delaware. (D.I. 22 Ex. A at ¶¶ 5-6) HTC America has shown that it does not have a regular and established place of business in this District. Thus, venue does not lie in Delaware for HTC America under the second prong of Section 1400(b).

         HTC Corp. is a Foreign Defendant and May be Sued in Any Judicial District

         HTC Corp. is a foreign defendant; specifically, it is a Taiwanese corporation with its principal place of business in Taoyuan, Taiwan. (D.I. 20 at ¶ 9) In Brunette Mach. Works., Ltd. v. Kockum Indus., Inc., 406 U.S. 706, 706-07 (1972), the Supreme Court held that when a foreign defendant is sued in a patent infringement action, the general venue provision, 28 U.S.C. § 1391, governs. Pursuant to § 1391, a foreign defendant may be sued in any judicial district. See 28 U.S.C. § 1391(c)(3).

         Nevertheless, Defendants argue that "[f]or policy reasons" in light of the TC Heartland decision, the Court should find that venue is improper in this District as to HTC Corp. (D.I. 22 at 5-7; D.I. 55 at l)[2] But the TC Heartland Court made clear that its holding did not address the applicability of Section 1400(b) to foreign defendants, and it explicitly stated that it did not "express any opinion on" its holding in Brunette. 137 S.Ct. at 1520 n.2. Hence, Brunette remains good law, see, e.g., Red.com, Inc. v. Jinni Tech. Ltd., 2017 WL 4877414, at *7 (CD. Cal. Oct. 11, 2017), and, accordingly, venue is proper in this District as to HTC Corp.

         This Court May Exercise Personal Jurisdiction Over HTC Corp.

         In addition to arguing that venue is improper as to both HTC America and HTC Corp., Defendants' motion also seeks dismissal of HTC Corp. pursuant to Federal Rule of Civil Procedure 12(b)(2), based on lack of personal jurisdiction. (D.I. 22 at 7-9) ...


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