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Koninklijke KPN N.V. v. Kyocera Corp.

United States District Court, D. Delaware

December 18, 2017

KONINKLIJKE KPN N.V, Plaintiff,
v.
KYOCERA CORPORATION and KYOCERA INTERNATIONAL, INC, Defendants.

          MEMORANDUM ORDER

          HONORAB ELEONARD P. STARK UNITED STATES DISTRICT COURT.

         Pending before the Court is Defendants Kyocera Corporation ("Kyocera Corp.") and Kyocera International, Inc.'s ("Kyocera International" and collectively with Kyocera Corp, "Kyocera" or "Defendants") motion to dismiss (1) Kyocera International for improper venue or, in the alternative, to transfer venue to the Southern District of California; (2) Kyocera Corp. for lack of personal jurisdiction; and (3) the entirety of Plaintiff Koninklijke KPN N.V.'s ("KPN" or "Plaintiff) First Amended Complaint for failure to state a claim upon which relief can be granted. (D.I. 16) Having considered the parties' motion briefing (D.I. 17, 18, 24), KPN's Notice of Change in Circumstances and Supplemental Authority and Defendants' Response thereto (D.I. 43, 47), and the parties' letter briefing in response to the Court's September 11, 2017 Oral Order (D.I. 51, 62, 63, 65, 66), and for the reasons stated below, IT IS HEREBY ORDERED that Defendants' motion to dismiss (D.I. 16) 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.

         Nor does the Court find that Kyocera International forfeited its challenge to venue due to its conduct in this litigation. See Micron, 875 F.3d at 1101 ("[D]istrict courts have authority to find forfeiture of a venue objection."); Boston Scientific Corp. v. Cook Group Inc., F.Supp.3d, 2017 WL 3996110, at *9 (D. Del. Sept. 11, 2017) ("Prototypical examples of where the Court might reach such a conclusion [that a defendant has forfeited its venue challenge] include where a defendant raises venue for the first time on the eve of trial, or many months (or years) after TC Heartland was handed down, or where dismissal or transfer would unduly prejudice a plaintiff. Or a party may have taken affirmative steps in the litigation that should, in particular circumstances, be viewed as essentially estopping that party from prevailing on an improper [venue] defense.") (internal citations omitted).

         KPN argues that Kyocera International forfeited its objection to venue by joining in a Motion for Judgment on the Pleadings filed in this and eight other related cases on August 16, 2017, asserting that United States Patent No. 6, 212, 662 is invalid pursuant to 35 U.S.C. § 101. The Court disagrees.

         KPN filed its initial complaint on January 30, 2017, and an amended complaint on February 21, 2017. (D.I. 1, 10) In lieu of answering, on June 9, 2017, Defendants filed their pending motion to dismiss, due to, inter alia, improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). (D.I. 16) Subsequently, Kyocera International has repeatedly reaffirmed that it contests venue (D.I. 24; D.I. 26 at 2; D.I. 28 at 1; D.I. 33 at 1), and even moved to stay the case pending resolution of the instant motion (D.I. 33), a request KPN opposed (D.I. 37).[2] Under these circumstances, KPN is wrong to insist that Kyocera International's joinder in the Section 101 motion filed in several coordinated cases waived its steadfast challenge to venue. See, e.g., Lites Out, LLC v. OutdoorLink, Inc., 2017 WL 5068348, at *4 (E.D. Tex. Nov. 2, 2017) (finding no waiver due to defendant's participation in litigation, where defendant timely disputed venue and maintained its challenge to venue thereafter, thus "clearly and consistently question[ing] venue before taking part in the claim construction hearing"); cf. In re Rosuvastatin Calcium Patent-Litig, 2009 WL 4800702, at *6 (D. Del. Dec. 11, 2009) (finding no waiver of defendant's right to contest jurisdiction where it continued to contest jurisdiction while simultaneously filing counterclaim and defending itself in lawsuit).[3]

         Nor does the Court's conclusion of no forfeiture threaten Plaintiff with any undue prejudice, particularly given that trial is not scheduled to begin until at least September 9, 2019. (D.I. 50 at 21)

         Kyocera International 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 Kyocera International - which is incorporated in California (D.L 10 at ¶ 7) - does not "reside" in Delaware.

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

         Venue is proper in this District unless Kyocera International can show that the second prong of § 1400(b) is not satisfied. See Boston Scientific, 2017 WL 3 996110, at *4 (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 Kyocera International has sold and offered for sale its allegedly infringing products in Delaware. (See D.I. 17 at 5-6; D.I. 18 at 9) Therefore, Delaware is a proper venue for this lawsuit unless Kyocera International can meet its burden to show it does not have a regular and established place of business in Delaware. If Kyocera International 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 Kyocera International).

         Kyocera International has met its burden - and, indeed, KPN no longer seriously disputes that Delaware is an improper venue as to Kyocera International. (See D.L 62 at 3) In Kyocera International's sworn declarations, it indicates that it has no physical location or facility in Delaware, and while it has a single employee who lives in Delaware, that employee's office is located at Kyocera International's facility in New Jersey, and the employee has no business responsibilities in Delaware. (D.I. 17 Ex. B at ¶ 3; D.I. 63 Ex. A at ¶ 2) Kyocera International 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 Kyocera International under the second prong of Section 1400(b).[4]

         Kyocera Corp. Is a Foreign Defendant and May be Sued in ...


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