By Memorandum Order entered by The Honorable Richard G. Andrews in T-JAT Systems 2006 LTD. v. Expedia, Inc. (DE) et al., Civil Action No. 16-581-RGA (D.Del. January 29, 2019), the Court denied Plaintiff’s motion for reconsideration of the Court’s prior opinion and order granting Defendants’ motion to dismiss the action for patent infringement against Defendant Expedia-WA, a Washington corporation, for improper venue. In opposition to Defendants’ motion to dismiss, Plaintiff argued that venue over Expedia-WA exists “under 28 U.S.C. §1400(b), which provides that a patent infringement action may be brought in any district ‘where the defendant has committed acts of infringement and has a regular and established place of business.’” Id. at *2. The Court granted Defendants’ motion to dismiss after finding that Plaintiff failed to show Expedia-WA has a regular and established place of business in Delaware. Id.

In its motion for reconsideration, Plaintiff raised a new theory for venue. Id. In short, Plaintiff asserted that venue in Delaware is proper with respect to Expedia-WA because Expedia-WA wholly owns CSC Holdings Inc. (“CSC Holdings”), which wholly owns CruiseShipCenters International, Inc. (“CSC International”), and CSC International has a regular and established place of business in Delaware. Id.

After considering the parties’ respective arguments and considering evidence outside of the Complaint through a Notice of Subsequent Authority filed by Plaintiff, the Court concluded that Plaintiff did not present any new evidence warranting reconsideration and the Court did not commit a clear error of law or fact. Id. at *5-10. As part of its analysis, the Court noted the fact that CSC International operates a Delaware store did not change the outcome of the motion to dismiss because “Plaintiff fail[ed] to show that CSC International is a place of business ‘of the defendant,’ as required to establish proper venue for Expedia-WA.” Id. at *7. In other words, the Court concluded that Plaintiff did not provide any evidence that Expedia-WA engages in business from CSC International’s Delaware location. Id. at *9.

Interestingly, in its brief, Plaintiff did include a screenshot of the Google Maps result for CSC International’s Delaware location which showed a storefront sign that read “Expedia cruiseship centers” and argued that it showed that Expedia-WA ratified the Delaware location as its own. Id. However, the Court noted that the use of the Expedia logo at CSC International’s Delaware location is by itself insufficient to show that the Delaware location is a place of business of Expedia-WA. Id.

A copy of the Memorandum Order is attached.

The opinion leaves me wondering whether the result would have been any different if Plaintiff had included all of its venue assertions in the original complaint or an amended complaint before the Court issued its ruling on Defendants’ motion to dismiss. The standard on the motion for reconsideration likely made it more difficult for Plaintiff to survive the challenge to venue after the Court had previously granted the motion to dismiss.

Today, through a unanimous decision of the Court delivered by Justice Thomas (with the exception of Justice Gorsuch who took no part in the consideration or decision of the case), the U.S. Supreme Court in TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. _____ (2017) reversed the Federal Circuit in ruling that 28 U.S.C. § 1400(b) remains the only applicable patent venue statute, the term “residence” in 28 U.S.C. § 1400(b) refers only to the State of incorporation of a domestic corporation, and that 28 U.S.C. § 1391 did not supplement or modify § 1400(b) or the Supreme Court’s prior decision in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 226 (1957). Thus, given today’s ruling, patent infringement lawsuits will only be able to be filed in judicial districts in states where the infringing defendant is incorporated or in judicial districts where defendant has committed acts of infringement and has a regular and established place of business.

A copy of the U.S. Supreme Court’s Opinion is attached.

The general take away is that, if a patent infringement action is filed against a defendant in a state where defendant is not incorporated or in a state where defendant does not have a regular and established place of business and/or has not committed acts of infringement, the allegedly infringing defendant should move to dismiss or transfer the action for lack of venue.