Doctrine of “Ancillary Venue” Does Not Trump TC Heartland
Further to our ongoing coverage of post-TC Heartland patent litigation, in a recent development from the Northern District of Illinois, the court granted counterclaim defendants’ motion to dismiss for improper venue. In Shure Incorporated v. ClearOne, Inc., 1-17-cv-03078 (ILND March 16, 2018, Order), the court was blunt in dismissing the plaintiff’s argument regarding the applicability of purported “ancillary” venue. Plaintiff argued that the doctrine of ancillary venue, where parties are added in conjunction with a compulsory counterclaim are within the court’s supplemental jurisdiction, does not require an independent basis for venue. The court disagreed, and did not mince words: “[t]his argument is rejected. ClearOne cites no authority for the proposition that the doctrine of ancillary venue (whatever that really is) can override the clear terms of the patent venue statute.”
In properly assessing venue, the court analyzed whether venue was proper under the first part of 28 U.S.C. § 1400(b), which permits a patent infringement action to be brought in the judicial district where the defendant “resides.” Here, the court dismissed counterclaim defendants’ because both defendants lacked a regular and established place of business in the district. One defendant was incorporated in Delaware, and the other was based out of California. The court determined that neither company could be deemed to “reside” in the Northern District of Illinois.
The court then assessed the second part of § 1400(b), which establishes proper venue in a district where the defendant has both committed acts of infringement and has a regular or established place of business. Even though defendants may have committed acts of infringement in the Northern District of Illinois, the court determined that venue would still be improper because neither business maintained a “regular and established place of business” in the district. The court further reasoned that one of the defendants lacked offices and property in the district. Nor did the defendant maintain a mailing address or telephone number in the district.