BigCommerce: Venue in States with Several Districts

I previously wrote about Judge Gilstrap’s decision in BigCommerce and the somewhat complex issue of venue in multi-district states.  Even though BigCommerce is a Texas corporation, it argues that venue is improper in E.D.Tex. because the company HQ is in Austin (W.D.Tex.).  Judge Gilstrap disagreed and now Mark Lemley and his team have filed a petition for writ of mandamus to the Federal Circuit.

The issue begins with the statute – 28 U.S.C. 1400(b) states that a “civil action for patent infringement may be brought in the judicial district where the defendant resides…”  In TC Heartland the Supreme Court’s central holding is that “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.”  TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017).  On its face, that holding might appear to settle the issue – since BigCommerce is incorporated in Texas, venue is proper in any federal court in Texas.  However, the more general holding of TC Heartland was to reaffirm the prior Supreme Court decision in Fourco and, by implication, the even earlier Stonite decision.  Stonite Products Co. v. Melvin Lloyd Co., 315 U.S. 561 (1942).

The law of Stonite: In Stonite the Supreme Court was interpreting a prior version of 1400(b), but confirmed that “an inhabitant of the Eastern District of Pennsylvania” could not be sued for patent infringement in the “in the Western District of that State” without a “regular and established place of business” in that Western District.  As I previously wrote, a major “problem with Stonite is its cryptic language and that the prior statute used the word ‘inhabitant’ instead of ‘resident.'”

Now, the question is before the Federal Circuit on mandamus:

In which judicial district(s) do domestic corporations incorporated in multidistrict states “reside” under the patent venue statute?

The plaintiff in the case – Express Mobile – has been ordered to respond to the petition by January 8.

= = = = =

The patent at issue is U.S. Patent No. 6,546,397 (“the ’397 patent”), entitled “Browser Based Web Site Generation Tool and Run Time Engine.” Claim 1 is as follows:

1. A method to allow users to produce Internet websites on and for computers having a browser and a virtual machine capable of generating displays, said method comprising

(a) presenting a viewable menu having a user selectable panel of settings describing elements on a website, said panel of settings being presented through a browser on a computer adapted to accept one or more of said selectable settings in said panel as inputs therefrom, and where at least one of said user selectable settings in said panel corresponds to commands to said virtual machine;

(b) generating a display in accordance with one or more user selected settings substantially contemporaneously with the selection thereof;

(c) storing information representative of said one or more user selected settings in a database;

(d) generating a website at least in part by retrieving said information representative of said one or more user selected settings stored in said database; and

(e) building one or more web pages to generate said website from at least a portion of said database and at least one run time file, where said at least one run time file utilizes information stored in said database to generate virtual machine commands for the display of at least a portion of said one or more web pages.

 

23 thoughts on “BigCommerce: Venue in States with Several Districts

  1. Can someone post the mandamus request?

  2. Lets hope mandamus is granted to decide what should be a straightforward question of statutory interpretation. However, note that the Fed. Cir. screwed up once before in interpreting this very same statute [as noted at that time] until finally reversed by the Supremes many years later in TC Heartland, so no prediction here. The fact that this case is coming out of E.D.TX does not help. Fortunately Delaware has only one district.

  3. Next you’re going to have companies that incorporate in Delaware asserting that venue is improper in Delaware because they have no regular and established place of business there.

    1. No way, the statute does not require both incorporation and a regular and established place of business in the same state.

      1. In fact, Paul, the statute does not require principal place of business as well, just and only, incorporation.

        Thus, there is some confusion here about mixing requirements of doing business and incorporation. They are alternatives, not some factors to be weighed in a equitable stew.

        1. Ned: the statute does not require principal place of business as well, just and only, incorporation.

          So, under the statute, how can venue be improper if you’re incorporated in the district (or state, if the state has only one district) where the suit is brought against you ?

          What’s the argument? The statute is unconstitutional? Just throwing it out there because, hey, why not.

          1. how can venue be improper if you’re incorporated in the district (or state, if the state has only one district) where the suit is brought against you ?

            Strawman much? (that’s rhetorical).

            More than sure that NO ONE is suggesting that THAT particular question is at issue.

            Try something else.

    2. That won’t work.

      But probably it will be tried because that’s the way a certain class of litigants operates. The result should be sanctions but that would make some wealthy people have a big drippy sad.

      1. Your one-bucketing ISMs are showing.

  4. Let’s start the year off with a huge laugh at the expense of the con artists peddling that “self driving car” technology. It’s just around the corner and you’re going to LOVE paying big $$$$ for it. You’ll be required to, if the Silly Con Valley Little Boys Club has its way. Here’s the state of the art:

    link to teslamotorsclub.com

    Clearly the answer is more logic patents on how to avoid scraping up a robot car moving at 1 mph.

    1. In the future, we’ll have no car accidents! All you have to do is stop driving less. Robot cars will enable that by making cars less affordable (non robot cars will be banned from most roads and urban areas). <— actual statement made to me at a party yesterday by one of the "pioneers" in the field

      1. (non robot cars will be banned from most roads and urban areas).

        I would have thought that you would have been happy with such a “socialization” move, given that traffic deaths account for FAR more deaths than guns, and how you feel about guns.

        1. Glibertarianist “reasoning” at its finest.

          Deep, deep deep stuff. Keep up the great work, “anon.” Make your cohorts proud.

          LOL

          1. Your reply is nonresponsive.

            I bet you hear that a lot.

  5. Stonite doesn’t seem very “unclear” to me. The use of the phrase “inhabitant” doesn’t appear to be meant as some sort of critical distinguishing term. It was the term used in the statute. That term was defined to require a “regular and established place of business”. That’s all you need to know to get to the right answer here, which also happens to be a reasonable and fair holding (surprise).

    The claim is a hideous pile of junk, by the way, as anyone who went to a decent law school in Missouri would understand instantly. Just read the preamble. That’s all there is. The “steps” recited below are just vapid scrivening.

    building one or more web pages

    LOL. “Building.” Please give us a break, people.

  6. The CAFC should not even answer the venue question on this case: the claims are garbage and the CAFC should sua sponte dispatch them to the dustbin of history.

    Even if there was an iota of novelty to the claims, and even if the claims had some patent eligible structure or limitations, what a ‘virtual machine’ may or may not be is completely indefinite.

  7. Since the Court left the issue at “State,” I am curious if any “intra-State” distinction was ‘visible’ to the Court (perhaps in Amici Briefs) such that the Court’s choice in leaving its decision AT the State level already answers the question (also of note here might be the ‘general view’ that this Venue change by the Court is a “new law” – separating it from such prior decisions as Stonite.

    1. Happy 2018, sniveler magnus! Assume what Dennis wrote is accurate and then tell everyone what the holding should be, and why.

      1. I see that you STILL cannot help yourself from using your number one meme of Accuse Others (and posting with zero – and I am being generous with that label – content).

        Hooray – you are almost at the full 12 year mark of adding nothing.

      2. Still waiting for an answer, o serious one.

        1. An answer?

          To what? My own question? Do you know how this blogging thing is supposed to work?

          1. Do you know how this blogging thing is supposed to work?

            ROTFLMAO

            Not sure what the phrase “supposed to” means in this context but I am very much aware of how it actually works.

            Are you going to spend all of 2018 asking silly questions, kicking up dust, screeching that “the scoreboard is broken”, and proclaiming that “software isn’t logic”? Of course you are.

            All I have to do is make sure that everyone is paying attention to how your desperate team “plays the game.” More people are aware of that now than ever before, thankfully. And thank you. LOL

            1. I am very much aware of how it actually works.

              Given that you have – by far – the most posts that are expunged, your claim is not evidenced by facts. What you “engage” in (and to this, a kernel of truth attaches) is propaganda. And yes, I have little doubt that you think that you understand all that there is to understand when it comes to propaganda.

              software isn’t logic?

              Shall we play on the merry-go-round of my simple reference to what may obtain a copyright as defeating to your supposition that software is logic?

              Again?

              And thank you. LOL

              You are welcome – though the reason why evidently escapes you.

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