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.
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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.