Improper Venue for Web-Based Company in Light of In re Cray
In our continuing post-TC Heartland coverage, the District of Nevada recently identified a key factor in analyzing venue challenges in patent litigation: whether the public can access the defendant corporation or its services in the respective forum. In this case, the defendant did not have any officers, directors, or employees based in Nevada – nor did it have any office, land, facilities, or sales in Nevada.
The court granted the defendant’s motion to transfer for improper venue and rejected plaintiff’s argument that In re Cray’s three-part definition of “regular and established place of business” should not apply to web-based businesses. The Court concluded that in defining a regular and established business the “key inquiry is not whether physical objects are involved, but rather whether the public has access to the defendant corporation through an employee or office located in the district where a suit is brought or if the public directly accesses the services of defendant through a location in the respective forum.”
Here, the bulk of the defendant’s employees, product development, and overall operations are located in San Francisco. Additionally, the defendant does not own or lease any buildings in the district of Nevada; nor does it have any Nevada phone numbers or addresses listed for its operations, and it does not store any inventory or data in Nevada either. On these facts, the Court held that these facts demonstrate that the defendant maintains no place of business in Nevada, much less one that is both regular and established.