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Northern District of California Holds That Patent Suit Against Only Foreign Entities Is Permissible Even Where Inclusion of Domestic Entities Would Alter Venue Analysis

A recent order from the Northern District of California in AU Optronics Corporation America v. Vista Peak Ventures, LLC, 4:18-cv-04638 (CAND 2019-02-19) (“AU Optronics”),  provides further guidance for patent venue analysis post-TC Heartland.  Specifically, the order teaches that bringing a patent suit against only a foreign parent company while omitting its domestic subsidiary will likely not run afoul of TC Heartland’s seminal venue holding. 

In AU Optronics, AU Optronics Corporation America (“AUO USA”), a California corporation, filed a declaratory judgment (“DJ”) action against Vista Peak Ventures, LLC’s (“Vista Peak”) for non-infringement of thirteen patents that Vista Peak asserted against AUO USA’s foreign corporate parent, AU Optronics Corporation (“AUO”), in the Eastern District of Texas using a California law firm.  In dismissing the DJ action against Vista Peak, the court, among other things, rejected AUO USA’s argument that hiring a San Jose law firm did not create the requisite minimum contacts with California.

AUO USA further claimed personal jurisdiction was proper because Vista Peak should have included AUO USA in its suit against AUO and, if it had done so, Vista Peak would be subject to personal jurisdiction in California.  AUO USA reasoned that Vista Peak improperly circumvented the holding of TC Heartland by bringing suit in Texas against AUO, a foreign corporation, and not AUO USA, the U.S. subsidiary.  According to AUO USA, Vista Peak knew TC Heartland would dictate that actions against AUO USA had to be brought in California and that not finding personal jurisdiction would deprive AUO USA of its right to fight Vista Peak’s claims in California.  The court disagreed, concluding that allowing TC Heartland alone to govern the analysis would ignore the basic proposition that the plaintiff, here AUO USA, bore the burden of showing minimum contacts such that personal jurisdiction is proper.  The court also noted that AUO USA ignored that Federal Circuit precedent allows suits against foreign corporations in any venue under the alien-venue rule.

While TC Heartland has made forum shopping more difficult, this order is another reminder that the alien-venue rule is still very much in effect.  It also underscores that supplanting the personal jurisdiction analysis with an assessment of venue is improper.  From a practical standpoint, patent practitioners should consider the benefits and costs of including a domestic subsidiary in a suit against a foreign parent. As this case suggests, including only foreign entities may open up greater venue opportunities.

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About this Author

 Andrew H. DeVoogd Member Boston Mintz Patent Litigation Licensing & Technology Transactions International Trade Commission Strategic IP Monetization & Licensing Federal District Court IP Due Diligence

Drew is an experienced patent litigator and trial attorney whose work encompasses a broad range of technologies. He regularly represents clients in high stakes International Trade Commission investigations involving some of the world's largest technology companies. He also litigates patent matters and other business disputes in federal district courts around the country, and advises clients in complex IP licensing and related transactions. Drew excels at helping clients make sense of nuanced legal issues while developing effective strategies to protect and leverage their intellectual...

Daniel B. Weinger Patent Litigation Attorney Mintz Law Firm

Daniel's practice in intellectual property focuses on patent litigation, both at the International Trade Commission and the Federal District Courts. Daniel has participated in all phases of patent litigation, including active engagement in multiple evidentiary hearings at the International Trade Commission. He has done work in a variety of technology areas, including computer software, software architecture, GPS, network devices, semiconductors, converged devices, and LED lighting.

Prior to joining Mintz Levin, Daniel worked as a database programmer with InterSystems, Corp., where he specialized in programming solutions for database development with a focus primarily on integration engines.

While on leave from Mintz Levin, from 2014 - 2015, Daniel practiced as a Special Assistant District Attorney in the Middlesex County (MA) District Attorney's Office, based in the Framingham, MA, district court.  During that time, Daniel prosecuted and tried numerous drug, larceny, breaking and entering, and motor vehicle cases in bench and jury sessions.  He also argued bail hearings, motions to suppress, and motions to dismiss.

Matthew S. Galica, Mintz Levin, Technology Specialist, Software Development lawyer, Application architect, Attorney

Matt focuses his intellectual property practice on patent litigation, strategic IP counseling, and patent valuation.  He has experience representing clients before the International Trade Commission (ITC), Federal district courts, and the Patent Trial and Appeal Board.  Matt’s practice covers complex technologies such as microprocessors, graphics processors, RF circuitry, LCD display systems, microelectromechanical systems, audio and video processing, VLSI design, consumer telecommunications systems, and DDR-compliant memory modules and DRAM.

Matt has held lead roles in multiple ITC...

Christopher G. Duerden Associate Mintz Patent Litigation, Federal District Court, International Trade Commission, Technology

Chris is a patent attorney whose practice focuses on IP litigation. He has worked on a variety of International Trade Commission cases involving mechanical, electrical, software, and computer engineering technology.

Prior to joining Mintz, Chris was a project attorney in the Boston office of a national, multi-practice law firm. Working with the patent prosecution team, he drafted responses to USPTO Office Actions involving telecommunications.

Earlier Chris founded and ran a company that developed and sold kits for a Linux-powered gaming system. He later...