by Dennis Crouch
The same panel that recently decided In re ZTE (Fed. Cir. May 14, 2018) (Judges Reyna, Linn, and Hughes) has now also decided another improper venue mandamus action: In re BigCommerce, Inc. (Fed. Cir. May 15, 2018).
BigCommerce focuses on the issue of proper venue in multi-district states. The potential confusion comes from the Supreme Court’s central holding in TC Heartland that “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.” BigCommerce is a Texas Company, but its HQ is in Austin (W.D.Texas) and argues that the Supreme Court’s statement was incomplete. Now, on mandamus, the Federal Circuit has sided with BigCommerce — holding that the rule is more nuanced for multi-venue states.
[A] domestic corporation incorporated in a state having multiple judicial districts “resides” for purposes of the patent-specific venue statute, 28 U.S.C. § 1400(b), only in the single judicial district within that state where it maintains a principal place of business, or failing that, the judicial district in which its registered office is located.
Thus, the outcome here is that E.D.Texas is an improper venue for BigCommerce under 28 U.S.C. 1400(b) since the company neither (1) resides nor (2) has a place of business in the venue.
1400(b) Any 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.
On remand, the District Court should either dismiss the lawsuits or grant a motion to transfer.
The Federal Circuit’s decision here has to be correct, and the only difficulty is the loose Supreme Court wording in TC Heartland.
In its analysis, the Federal Circuit started with the statute, which focuses on “the judicial district where the defendant resides.” The focus here is not on the “state” as a whole but on the district itself. For its part, the appellate panel though emphasis should be added to the article “the judicial district” — i.e., what is the one single district where the defendant resides? “A plain reading of ‘the judicial district’ speaks to venue in only one particular judicial district in the state.” The court also cited Stonite Products Co. v. Melvin Lloyd Co., 315 U.S. 561 (1942) for what it identified as the Supreme Court’s “view on the issue” — “that a corporation incorporated in a multi-district state is not a resident of every district in the state.”