Looking-Back: TC Heartland; Waiver; and a Change in the Law

In re Yahoo (Fed. Cir. 2017)

The Federal Circuit has ordered briefing in Yahoo’s petition for writ of mandamus on the issue of venue.  The E.D.N.Y. denied Yahoo’s motion to dismiss, holding (on oral decision): (1) that Yahoo had waived its right to challenge venue; and (2) that TC Heartland did not change the law (since Fourco has been the controlling law all along).  Note here, the second point – change in law – is important because it can excuse prior waiver.  Under Second Circuit law: “[A] party cannot be deemed to have waived objections or defenses which were not known to be available at the time they could first have been made.” Holzsager v. Valley Hosp., 646 F.2d 792 (2d Cir. 1981).  In my view, a major problem with Yahoo’s ‘lack of knowledge’ problem was that by the time their answer was due (January 2017), TC Heartland was already pending before the Supreme Court.

Note, on the merits, the plaintiffs (AlmondNet, et. al) apparently admitted that venue would be improper – but for the waiver.

[Petition for Mandamus With Appendix]

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The case involves U.S. Patent Nos. 7,822,639; 7,979,307; 8,244,574; 8,244,582; 8,244,586; 8,494,904; 8,671,139; 8,677,398; 8,775,249; and 8,959,146.

5 thoughts on “Looking-Back: TC Heartland; Waiver; and a Change in the Law

  1. 4

    If TC Heartland was not a change in law and plaintiff admits venue would be improper but for the waiver, didn’t the plaintiff mislead the court in pleading venue in its Complaint?

    That is, if Fourco has always been the law then plaintiff created a Rule 11 problem by pleading venue was proper in the first instance right?

    1. 4.1

      If TC Heartland was not a change in the law, then didn’t the district court defy the Supreme Court for years every time it rejected an improper venue argument?

  2. 3

    This will be a quick reversal by the CAFC. The view that TC Heartland “did not change the law” on patent venue is pure sophistry, and it’s an embarrassment that some district courts have latched onto this fiction to find waiver, in many cases, simply to keep lucrative patent cases in their districts.

    Not clear if the CAFC will even address the waiver argument. As “dcl” correctly noted in these comments, Yahoo! actually put a conditional challenge to venue in its answer, in the event of a reversal in TC Heartland. The CAFC could resolve the issue by simply saying the district court clearly erred in finding waiver under these circumstances, thus dodging the whole “change the law” and waiver issue altogether. Either way, I predict a fairly speedy reversal by CAFC.

  3. 2

    In my view, a major problem with Yahoo’s ‘lack of knowledge’ problem was that by the time their answer was due (January 2017), TC Heartland was already pending before the Supreme Court.

    Page 4 of the mandamus petition says that Yahoo cited TC Heartland in its answer and reserved its rights depending on the outcome:

    “This paragraph contains a legal conclusion. Yahoo admits that venue exists in this district under 28 U.S.C. §§ 1391(b) and (c) and 1400(b). However, Yahoo reserves the right to challenge venue based upon any change in law, including the Supreme Court’s upcoming decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341. Yahoo denies the remaining allegations of this paragraph.”

    I may be missing something, but don’t see the major problem.

  4. 1

    The issue of “changing the law” is interesting from a different and larger perspective: generally speaking, patent law is statutory law. Also, generally speaking, the Constitution allocates authority to change the statutory law that is patent law to only one specific branch of the government.

    While here, venue being the legal issue, and its resolution may lie outside (strictly) of patent law, how many other issues are we faced with where a less-than-rigorous hewing to our separation of powers occurs?

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