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Blackbird Tech, LLC v. TADD, LLC

United States District Court, D. Delaware

May 10, 2019

BLACKBIRD TECH, LLC d/b/a BLACKBIRD TECHNOLOGIES, Plaintiff,
v.
TADD, LLC, Defendant.

          REPORT AND RECOMMENDATION

          SHERRY R. FALLON UNITED STATES MAGISTRATE JUDGE.

         I. INTRODUCTION

         Presently before the court in this patent infringement action is defendant TADD, LLC's ("TADD") motion to transfer venue to the Northern District of Illinois pursuant to 28 U.S.C. § 1400(b). (D.I. 25) For the following reasons, I recommend that the court grant TADD's motion to transfer venue to the Northern District of Illinois.

         II. BACKGROUND

         Plaintiff Blackbird Tech, LLC ("Blackbird") is a Delaware corporation with its principal place of business in Concord, Massachusetts. (D.I. 1 at ¶ 1) Blackbird is the owner by assignment of all right, title, and interest in and to U.S. Patent No. 7, 086, 747 ("the '747 patent"). (Id. at ¶ 8) The '747 patent, which issued on August 8, 2006, is entitled "Low-Voltage Apparatus for Satisfying After-Hours Lighting Requirements, Emergency Lighting Requirements, and Low Light Requirements." (Id.) The '747 patent claims linear LED lighting products. (Id. At ¶ 10)

         TADD is incorporated in Illinois and maintains its headquarters in Cary, Illinois. (Id. at ¶ 2) It is undisputed that TADD does not have a place of business in Delaware, it is not registered to do business in Delaware, and it has no other meaningful connection to Delaware. (D.I. 25, Ex. A at ¶¶ 5-12; D.I. 32 at 1 ("Blackbird does not dispute that, under current law, this case could not be brought in the District of Delaware.")).

         Blackbird filed this lawsuit on October 19, 2016, accusing TADD of infringing the '747 patent by making, using, offering to sell, selling, providing, maintaining, and/or supporting its allegedly infringing linear LED lighting products (the "Accused Products"). (Id. at ¶ 10; Ex. B) This matter was stayed and administratively closed on February 24, 2017 pending resolution of an appeal to the Federal Circuit in a related case. (D.I. 17) The Federal Circuit issued its opinion on July 16, 2018, and a petition for panel rehearing was made. On September 21, 2018, a mandate issued from the Federal Circuit enacting the July 16, 2018 opinion. (D.I. 21) The parties submitted a joint letter on February 5, 2019 requesting that the stay be lifted and requesting the setting of a scheduling conference. (Id.) The court entered an order lifting the stay on February 6, 2019. (D.I. 22) A scheduling conference was held on March 6, 2019. (D.I. 28)

         III. LEGAL STANDARD

         Venue in a patent infringement action is governed by 28 U.S.C. § 1400(b), which provides that "[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." This statute constitutes "the exclusive provision controlling venue in patent infringement proceedings and [is] not supplemented or modified" by the broader definition of "resides" in the general venue statute at 28 U.S.C. § 1391. TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514, 1518 (2017) (internal quotation marks omitted). Federal Circuit law governs venue in patent infringement cases under 28 U.S.C. § 1400(b), and the plaintiff bears the burden of establishing proper venue. In re ZTE (USA) Inc., 890 F.3d 1008, 1013 (Fed. Cir. 2018).

         In accordance with the first prong of § 1400(b), the Supreme Court has held that a corporation resides only in its state of incorporation. TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514, 1520 (2017). Under the second prong of § 1400(b), venue is proper in a district where the defendant has "committed acts of infringement" and has a regular and established place of business. 28 U.S.C. § 1400(b). "[T]he regular and established place of business standard requires more than the minimum contacts necessary for establishing personal jurisdiction or for satisfying the doing business standard of the general venue provision." In re Cray, 871 F.3d 1355, 1361 (Fed. Cir. 2017). Accordingly, the phrase "regular and established place of business" creates three distinct requirements: "(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant." Id. at 1360.

         Ordinarily, the defense of improper venue is waived if not timely raised in either a motion to dismiss filed pursuant to Rule 12(b)(3), or in the defendant's answer. Fed.R.Civ.P. 12(g)(2) & 12(h)(1). However, the Federal Circuit has held that the waiver provision of Rule 12(h) does not apply to a defendant asserting a venue objection based on TC Heartland that had not been made in a Rule 12(b) motion filed prior to the TC Heartland decision. In re Micron Technology, Inc., 875 F.3d 1091, 1096, 1099-1100 (Fed. Cir. 2017). As the Federal Circuit explained: "[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.

         The Federal Circuit indicated that a district court may also utilize its inherent powers and standard procedural devices to find forfeiture of a venue challenge to facilitate "the just, speedy, and inexpensive resolution of disputes," in accordance with Federal Rule of Civil Procedure 1 and the Supreme Court's decision in Dietz v. Bouldin. In re Micron, 875 F.3d at 1100 (quoting Dietz v. Bouldin, 136 S.Ct. 1885, 1891 (2016)). A timeliness challenge pursuant to these authorities is appropriate in the venue context because 28 U.S.C. § 1406(b) provides that "[n]othing in this chapter shall impair the jurisdiction of a district court of any matter involving a party who does not interpose timely and sufficient objection to the venue." 28 U.S.C. § 1406(b). Under the Dietz framework, the district court's use of its inherent power "must be a reasonable response to the problems and needs confronting the court's fair administration of justice[, ]" and "cannot be contrary to any express grant of or limitation on the district court's power contained in a rule or statute." Dietz, 136 S.Ct. at 1892 (internal citations and quotation marks omitted); see also Micron, 875 F.3d at 1100. A district court should exercise this authority "with caution[, ]" resting its decision on "sound determinations of untimeliness or consent." In re Micron, 875 F.3d at 1101.

         IV. ANALYSIS

         Blackbird does not dispute that this action could not be brought in the District of Delaware following the Supreme Court's decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC,137 S.Ct. 1514 (2017). (D.I. 32 at 1) Instead, Blackbird argues that TADD waived its objection to venue. First, Blackbird contends that TADD waived its objection to venue by declining to pursue the venue defense raised in its answer to the complaint. (Id. at 3-4) TADD replies that, under pre-7C Heartland law, it was subject to personal ...


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