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Delaware Chief Judge Issues Guidelines for Venue in Patent Cases

The court finds that some physical presence is required to satisfy the venue standard.

On September 11, 2017, Chief Judge Leonard Stark of the US District Court for the District of Delaware handed down two decisions providing key guidelines for addressing venue challenges in patent cases.

In May, the US Supreme Court issued its landmark TC Heartland decision, which held that, for purposes of the patent venue statute of 28 U.S.C. § 1404(b), a corporation “resides” in its state of its incorporation. TC Heartland, however, did not address what qualifies as a “regular and established place of business” under the patent venue statute.

In separate patent infringement cases brought by Boston Scientific Corporation and Bristol-Myers Squibb Company, defendants filed improper venue motions on the theory that they do not have a “regular and established place of business” in Delaware. See Boston Sci. Corp. et al. v. Cook Grp. Inc. et al., Case No. 1:15-cv-00980-LPS-CJB (D. Del.); Bristol-Myers Squibb Co. et al. v. Mylan Pharms., Inc., Case No. 17-379-LPS (D. Del.). Chief Judge Stark’s rulings provide several guidelines for dealing with venue challenges:

  • Burden of Proof on the Party Challenging Venue. The court considered which party should bear the burden of proof on a venue challenge. It concluded that such issue is a procedural, nonpatent issue, and that Third Circuit law would apply. Accordingly, the court held that the moving party would bear the burden of proof in a venue challenge.

  • TC Heartland Effected an Intervening Change in Law. In the Boston Scientific case, the plaintiff argued that the defendants waived any venue challenge because they did not object to venue in their pleadings or in the years before TC Heartland issued. The court concluded that TC Heartland effected an intervening change in law creating an exception to the general rule of waiver, and thus permitted defendants to pursue venue challenges.

  • Some Physical Presence Is Required. The court found that while no fixed space in the sense of a formal office or store is necessary to establish a “regular and established place of business,” some physical presence is nevertheless required. The court made clear that certain activities alone would not satisfy the venue standard, such as (a) simply doing business in a district or being registered to do business in the district, (b) having “minimum contacts” with a district for purposes of personal jurisdiction, (c) maintaining a website that allows consumers to purchase goods or product within the district, or (d) shipping goods into a district.

  • Venue Is Fact Intensive and May—or May Not—Warrant Discovery. The court held venue to be a “fact intensive inquiry” dependent on the circumstances of the case. In these two cases, the inquiries led to different results.

In the Bristol-Myers Squibb Company case, the court found that while the plaintiff was unable to identify a sufficient physical presence of the defendant in the district, there were sufficient additional facts raised such that “the Court cannot say that [the defendants do] not have a regular and established place of business in Delaware.” Thus, the court denied the motion without prejudice as to the defendants renewing their venue challenge after venue-related discovery was completed.

By contrast, in the Boston Scientific case, the court granted the defendants’ motion and transferred the case because it found that the defendants presented facts that established that they do not have a regular and established place of business in Delaware. The court denied the plaintiffs’ request for venue-related discovery, finding that the record sufficiently demonstrated improper venue and that further discovery would “appear[] to be no more than a fishing expedition.”

Copyright © 2017 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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About this Author

John V. Gorman, Morgan Lewis, Intellectual Property Litigation Lawyer, Complex Commercial Disputes Attorney
Partner

John V. Gorman works with a diverse group of clients, from global corporations to nonprofits, facing complex commercial disputes and intellectual property litigation. Representing plaintiffs and defendants, John handles all phases of litigation from inception through trial and post-trial appeals. He advises on commercial cases involving patent, trademark, trade secret, and copyright disputes in federal and state courts throughout the United States. Clients turn to John for assistance with matters involving a wide range of subjects.

215.963.5157
Colm Connolly, Morgan Lewis Law Firm, Wilmington, Intellectual Property Litigation Attorney
Partner

A former United States Attorney, Colm F. Connolly helps companies and individuals faced with complex legal issues across a wide spectrum of subject matters. A fellow of the American College of Trial Lawyers and a member of the American Law Institute, Colm is a seasoned litigator with a national reputation for his courtroom advocacy. Colm has tried dozens of cases in federal and state courts and has argued more than a dozen times before the US Courts of Appeals for the Second and Third Circuits and the Delaware Supreme Court. His practice includes complex commercial and intellectual property litigation, white collar criminal matters, and corporate investigations. He is Managing Partner of the Wilmington office. 

302-574-7290
Amy Dudash, Morgan Lewis Law Firm, Complex Commercial Litigation Attorney
Associate

Amy M. Dudash focuses on antitrust, white collar, complex commercial, and class action litigation. She represents clients across industries in intellectual property (IP), corporate, and commercial disputes in US federal courts throughout the country and before administrative agencies. Amy also maintains an active pro bono practice representing indigent and disabled Philadelphia residents in appellate proceedings. Prior to joining Morgan Lewis, she was a law clerk to Judge Leonard P. Stark of the US District Court for the District of Delaware.

215-963-4861