United States District Court, E.D. Tennessee, Knoxville
W. PHILLIPS, SENIOR UNITED STATES DISTRICT JUDGE
Plastic Development Group, LLC (“PDG”) has filed
a motion to dismiss this patent infringement action for
improper venue pursuant to Fed.R.Civ.P. 12(b)(3) and/or
Fed.R.Civ.P. 12(c) [Doc. 48]. The Court has carefully
reviewed the pending motion and related pleadings [Docs. 49,
previously noted, this case involves plaintiff Maxchief
Investments Limited's (“Maxchief”) claims of
patent infringement as to a plastic bi-fold table
manufactured by PDG and sold within the Eastern District of
Tennessee. PDG previously filed a motion to transfer this
case to the Eastern District of Michigan, where PDG is
headquartered, pursuant to 28 U.S.C. §
1404(a). After consideration of the § 1404(a)
factors and the then- prevailing interpretation of venue law,
the Court concluded that PDG had not shown by a preponderance
of the evidence that a transfer was warranted [see
Docs. 29, 30].
TC Heartland LLC v. Kraft Foods Group Brands LLC
pending motion arises from the Supreme Court's recent
decision in TC Heartland LLC v. Kraft Foods Group Brands
LLC, 137 S.Ct. 1514 (2017). In TC Heartland,
the Supreme Court considered the question of “where
proper venue lies for a patent infringement lawsuit brought
against a domestic corporation.” Id. at 1516.
The Supreme Court noted the statutory direction in 28 U.S.C.
§ 1400(b), that a patent infringement action “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.” Id. In a prior decision, the Court
held that for purposes of § 1400(b), a domestic
corporation “resides” only in the State of
incorporation. Id. at 1517, 1519 (discussing
Fourco Glass Co. v. Transmirra Prods. Corp., 353
U.S. 222, 226 (1957)). Despite intervening revisions to the
general venue statute, 28 U.S.C. § 1391(c), which
equated “residence” with personal jurisdiction,
the TC Heartland Court concluded that
“amendments to § 1391 did not modify the meaning
of § 1400(b) as interpreted by
Fourco.” Id. Further, the Court
reversed the long-standing Federal Circuit holding that the
definition of corporate residence in § 1391(c) was
applicable to patent cases under § 1400(b). Id.
at 1519-1520 (discussing VE Holding Corp. v. Johnson Gas
Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990)).
Accordingly, the Supreme Court unequivocally held that
“[a]s applied to domestic corporations,
‘reside[nce]' in §1400(b) refers only to the
State of incorporation.” Id. at 1521.
TC Heartland to the instant case, PDG first argues
that it is not incorporated in this district and it does not
have any regular and established place of business in
Tennessee [Doc. 49 at pp. 6-7], points which are undisputed.
Thus, PDG argues that it does not “reside” in
this district and the case should be dismissed for improper
venue pursuant to Fed.R.Civ.P. 12(b)(3).
response, Maxchief argues that PDG has misconstrued the
TC Heartland case because its holding only applies
to domestic corporations and explicitly does not apply to
unincorporated associations, including limited liability
companies like PDG [Doc. 51 at pp. 2-3 (citing TC
Heartland, 137 S.Ct. at 1520)]. This is not quite true.
The Supreme Court explicitly limited its analysis in TC
Heartland: “we confine our analysis to the proper
venue for corporations” and reserved the applicability
of its holding to unincorporated entities. 122 S.Ct. at 1517,
argues that “residence” for unincorporated
entities such as PDG means “where it is doing
business” [Doc. 51 at pp. 4-5 (citing Denver &
Rio Grande W.R. Co. v. Bhd. of R.R. Trainmen, 387 U.S.
556, 562 (1967))]. However, the cases on which Maxchief
relies are interpretations of “residence” under
§ 1391, rather than § 1400(b). See, e.g.,
Douglas v. D.B. Va., LLC, No. 4:10CV80, 2010 WL 5572830,
at *3-4 (E.D. Va. Dec. 13, 2010) (discussing
“residence” of LLC under § 1391); Cal.
Clippers, Inc. v. U.S. Soccer Football Ass'n, 314
F.Supp. 1057 (N.D. Cal. 1970) (discussing
“residence” of an unincorporated associated under
§ 1391). In reply, PDG argues that Maxchief cites no
authority for treating unincorporated associations
differently for venue purposes in patent cases [Doc. 56 at
Court agrees with PDG on this point. Unincorporated
associations, such as limited liability companies, are
generally treated like corporations for purposes of venue,
whereby the “residence” is the association's
principle place of business. Roberts v. Paulin, No.
07-CV-13207, 2007 WL 3203969, at *2 (E.D. Mich. Oct. 31,
2007) (citing Denver & Rio Grande, 387 U.S. at
559)). Now that the Supreme Court has reinforced that
“residence” for corporate defendants in a patent
infringement case is limited to the state of incorporation,
Maxchief is hard-pressed to present a reason why
unincorporated associations should be treated differently.
Indeed, the language of § 1400(b) refers to a
“defendant” and is not limited only to corporate
defendants. Moreover, inasmuch as TC Heartland
appears to reject the broader personal jurisdiction basis for
residence of corporate defendants in patent cases, it seems
contrary to allow such a basis for unincorporated entities.
Accordingly, the Court agrees, in light of TC
Heartland, that venue is not proper in this district per
28 U.S.C. § 1400(b).
we are not starting from a clean slate and, as Maxchief
notes, a defense of improper venue can be waived [Doc. 51 at
pp. 5-7]. PDG contends that it has not waived the venue
defense because it was included in PDG's answer to the
complaint [Doc. 49. at p. 7 (citing Doc. 16 at pp.
3, 9)]. Maxchief argues that PDG has waived its venue defense
because the parties have engaged in “substantial
litigation activities” since the Court's ruling on
PDG's transfer motion [Id.]. PDG argues that the
progress of litigation has no bearing on whether venue is
proper [Doc. 56 at p. 8].
three post-TC Heartland cases, Maxchief further
argues that TC Heartland is not an intervening
change in the law, but rather a reaffirmation of the
Fourco decision [Doc. 51 at pp. 7-9]. These courts
have noted that the Supreme Court's Fourco
decision has been binding since it was issued in 1957,
notwithstanding the Federal Circuit's decision in VE
Holding to the contrary. See Cobalt Boats, LLC v.
Sea Ray Boats, Inc., No. 2:15CV21, 2017 WL 2556679, at
*3 (E.D. Va. June 7, 2017); ILife Tech., Inc. v. Nintendo
of Am., Inc., No. 3:13-cv-04987, 2017 WL 2778006, at *7
(N.D. Tex. June 27, 2017); Elbit Sys. Land & C4I Ltd.
v. Hughes Network Sys., LLC, No. 2:15-CV-00037-RWS-RSP,
2017 WL 2651618, at *20 (E.D. Tex. June 20, 2017). Thus,
Maxchief argues and these cases concur that the prevailing
argument in TC Heartland was always available.
argues that its improper venue argument was not
“available” prior to TC Heartland based
on the long-standing precedent of VE Holding
[Id. at pp. 5-6], relying on two courts which reach
this conclusion [Doc. 56 at pp. 7-8 (citing Westech
Aerosol Corp. v. 3M Co., No. C17-5067-RBL, 2017 WL
2671297, at *2 (W.D. Wash. June 21, 2017), and Stuebing
Auto. Mach. Co. v. Gavronsky, et al., No. 1:16-cv-576,
2017 WL 3187049 (S.D. Ohio June 12, 2107))]. Since the
conclusion of the briefing on this motion, district courts
have been split on this issue. See, e.g., Hand
Held Prods., Inc. v. Code Corp., No. 2:17-167-RMG, 2017
WL 3085859, at *3 (D.S.C. July 18, 2017) (“[t]he clear
trend … is to hold that TC Heartland is not
an intervening change in the law”); Tinnus Enter.,
LLC v. Telebrands Corp., No. 6:15-CV-00551-RC, 2017 WL
3084268, at *3 (E.D. Texas July 5, 2017) (“TC
Heartland does not qualify as an intervening change in
law”); but see The Valspar Corp. v. PPG Indus.,
Inc., No. 16-cv-1429, 2017 WL 3382063, at *4 (D. Minn.
Aug. 4, 2017) (“to hold that Fourco remained
good law at all times over the last twenty-seven years, and
thus that PPG should have raised the improper venue defense
at the time this case was filed, effectively ignores
reality”); Cutsforth, Inc. v. LEMM Liquidating
Co., No. 12-cv-1200, 2017 WL 3381816, at *4 (D. Minn.
Aug. 4, 2017) (same); Ironburg ...