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Best Medical International, Inc. v. Elekta Ab

United States District Court, D. Delaware

July 23, 2019

BEST MEDICAL INTERNATIONAL, INC., Plaintiff,
v.
ELEKTA AB, ELEKTA HOLDINGS U.S., INC., ELEKTA INC., ELEKTA LTD., AND IMPACT MEDICAL SYSTEMS, INC., Defendants.

          Geoffrey G. Grivner, Buchanan Ingersoll & Rooney PC, Wilmington, DE, Philip L. Hirschhorn, Jennifer Liu, Buchanan Ingersoll & Rooney PC, New York, New York, Erin M. Dunston, Kimberly E. Coghill, Anand Mohan, Buchanan Ingersoll & Rooney PC, Alexandria, Virginia - Attorneys for Plaintiff

          Steven J. Balick, Andrew C. Mayo, Ashby & Geddes, Wilmington, DE, Ronald S. Lemieux, Tamara D. Fraizer, Vid R. Bhakar, Squire Patton Boggs (US) LLP, Palo Alto, CA, Theresa A. Rakocy, Squire Patton Boggs (US) LLP, Cleveland, OH - Attorneys for Defendants

          MEMORANDUM OPINION

          NOREIKA, U.S. DISTRICT JUDGE

         Before the Court is Defendant Elekta Inc.'s Motion to Dismiss or Transfer for Improper Venue, and Defendant IMP AC Medical Systems, Inc.'s (“IMP AC”) Motion to Dismiss for Failure to State a Claim. (D.I. 11). Plaintiff Best Medical International, Inc. (“Plaintiff or “Best”) opposes Elekta Inc.'s and IMP AC s motions. (D.I. 26). For the reasons set forth below, the Court will grant IMPAC's motion and will grant-in-part and deny-in-part Elekta Inc.'s motion.

         I. BACKGROUND

         Best initiated this action on October 16, 2018, accusing Elekta Inc. and IMPAC as well as Elekta AB, Elekta Holdings U.S., Inc., and Elekta Ltd. of patent infringement.[1] (D.I. 1; see also D.I. 9). Elekta Inc. is a Georgia corporation with a principal place of business in Atlanta, Georgia. (D.I. 9 ¶ 12). IMPAC was a Delaware corporation with a principal place of business in Sunnyvale, California. (Id. ¶ 16). On August 1, 2017, as a result of a merger agreement between Elekta Inc. and IMPAC, IMPAC was merged into Elekta Inc. (D.I. 13 ¶ 15). Following the merger, Elekta Inc. “succeeded to all of the rights, privileges, powers, property, debts, obligation and liabilities of IMPAC.” (Id. ¶ 16 (internal quotation marks omitted)). Moreover, as a result of the merger, Elekta Inc. “acquired all of IMPAC's assets and took over IMPAC's businesses.” (Id. ¶ 17).

         II. LEGAL STANDARDS

         A. Motion to Dismiss Under Rule 12(b)(6)

         In ruling on a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must accept all well-pleaded factual allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Mayer v. Belichick, 605 F.3d 223, 229 (3d Cir. 2010); see also Phillips v. Cty. of Allegheny, 515 F.3d 224, 232-33 (3d Cir. 2008). “[A] court need not ‘accept as true allegations that contradict matters properly subject to judicial notice or by exhibit,' such as the claims and the patent specification.” Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d 905, 913 (Fed. Cir. 2017) (quoting Anderson v. Kimberly-Clark Corp., 570 Fed.Appx. 927, 931 (Fed. Cir. 2014)). Nor is the Court required to accept as true bald assertions, unsupported conclusions or unwarranted inferences. See TriPlay, Inc. v. WhatsApp Inc., No. 13-1703 (LPS) (CJB), 2018 WL 1479027, at *3 (D. Del. Mar. 27, 2018). Dismissal under Rule 12(b)(6) is only appropriate if a complaint does not contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). This plausibility standard obligates a plaintiff to provide “more than labels and conclusions, and a formulaic recitation of elements of a cause of action.” Twombly, 550 U.S. at 555. Instead, the pleadings must provide sufficient factual allegations to allow the Court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 506 U.S. at 678.

         B. Motion to Dismiss Under Rule 12(b)(3)

         Venue in patent infringement cases is controlled exclusively by 28 U.S.C. § 1400(b). See TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514, 1516 (2017). “Section 1400(b), like its predecessor statutes, is intended to be restrictive of venue in patent cases compared with the broad general venue provision.” In re ZTE (USA) Inc., 890 F.3d 1008, 1014 (Fed. Cir. 2018). Thus, under § 1400(b), patent infringement actions “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.” 28 U.S.C. § 1400(b). Under the first prong of § 1400(b), a domestic corporation “resides” only in its state of incorporation. TC Heartland, 137 S.Ct. at 1521. Under the second prong of § 1400(b), for a corporation to a have regular and established place of business, three requirements must be met: “(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.” In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017).

         A party may file a motion to dismiss for improper venue pursuant to Rule 12(b)(3). “[U]pon motion by the Defendant challenging venue in a patent case, the Plaintiff bears the burden of establishing proper venue.” ZTE, 890 F.3d at 1013. “Generally, ‘it is not necessary for the plaintiff to include allegations in his complaint showing that venue is proper.'” Novartis Pharm. Corp. v. Accord Healthcare Inc., No. 18-1043 (LPS), 2019 WL 2502535, at *2 (D. Del. June 17, 2019) (quoting Great W. Mining & Mineral Co. v. ADR Options, Inc., 434 Fed.Appx. 83, 86-87 (3d Cir. 2011)). In considering a motion to dismiss for improper venue, the Court “accept[s] as true all of the allegations in the complaint, unless those allegations are contradicted by the defendants' [evidence], ” such as affidavits. Bockman v. First Am. Mktg. Corp., 549 Fed.Appx. 157, 158 n.1 (3d Cir. 2012). If the Court determines that venue is improper, 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. § 1406(a). “Dismissal is considered to be a harsh remedy . . . and transfer of venue to another district in which the action could originally have been brought, is the preferred remedy.” Genuine Enabling Tech., LLC v. Nintendo Co., 369 F.Supp.3d 590, 593 (D. Del. 2019) (quoting Spiniello Cos. v. Moyneir, No. 13-5145 (KM) (SCM), 2014 WL 7205349, at *5 (D.N.J. Dec. 17, 2014)) (internal quotation marks omitted).

         III. ANALYSIS

         A. IMPAC's Motion to Dismiss for Failure ...


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