Post-Heartland Denial Of Venue Change Heartless?
It’s a strange phenomenon post-Heartland. There are thousands of cases that—according to SCOTUS’ not-surprising, yet inevitably disruptive decision in TC Heartland, LLC v. Kraft Foods Group Brands, LLC, Case No. 16-341 (May 22, 2017)—are currently pending before a court where venue no longer lies.
As a result, many patent litigants are understandably asking judges all over the nation to grant change of venue to the jurisdiction where the patent infringer is incorporated as opposed to where the infringement occurred. However, even where venue no longer statutorily lies, a recent case out of the Southern District of California proves Heartland may not be reason enough to support change of venue. It seems this judge had a keen eye on the procedural history and pleadings instead. There are many lessons to be learned in this one. Namely, when a Heartland-based request for change of venue may not work.
Here’s what went down. Plaintiff, InfoGation, filed separate suits against Defendant cellphone maker, HTC, in July 2016, claiming patent infringement. See InfoGation Corp. v. HTC Corp., et al., Case No. 17-cv-00646 (July 7, 2017). In response, HTC filed a Heartland-based motion to change venue. Well, not initially “in response.” In denying HTC’s motion for change of venue, Judge Marilyn L. Huff reached the following insightful, and helpful post-Heartland, conclusions:
Heartland Will Not Excuse Waiver
In reversing the Federal Circuit’s interpretation of the venue statute in Heartland, SCOTUS was very clear. Venue no longer lies where the patent infringer has a place of business and where the infringement occurred; venue lies where the infringer is incorporated. Many commentators have noted that had SCOTUS not rendered the decision modifying venue in patent infringement cases, Congressional leaders may have pursued litigation to achieve the same outcome. So, it was a change many felt needed to occur. While it is now clear, post-Heartland, that patent infringement claims can no longer claim venue in jurisdictions where the patent infringer has a place of business and where the infringement occurred, what the Heartland opinion did not accomplish was a waiver of waiver. How can you waive your Heartland right to change of venue? Two ways:
Venue lies where the infringer is incorporated.
Patent infringement claims can't claim venue in jurisdictions where the patent infringer has a place of business.
An Alice Motion Can Constitute Waiver
There are several defenses many litigants know must be asserted in the first responsive pleading or they’re waived. Are they coming to mind for you now? A statute of limitations defense? Faulty service of process, the right to arbitration? Also, a motion to seek change of venue. That’s definitely one you want in the answer if its applicable. How long did HTC wait in this suit to request a change of venue? Over a year. But, this was not the primary reason Judge Huff found HTC had waived its right to seek change of venue. The nail in HTC’s coffin seemed to be a motion for judgment on the pleadings. Earlier in the suit, HTC had filed a motion seeking judgment on the pleadings arguing every patent lawyer’s favorite ambiguous patent killer—Alice—claiming InfoGation’s patent was invalid as abstract. Not only did this tactic not work, HTC’s decision to file a motion for judgment on the pleadings prior to filling a motion to dismiss also served, in Judge Huff’s opinion, as “a tacit admission on the part of the movant that the court has personal jurisdiction, that venue is properly laid there, and that the court should dispose of the case on the merits.” InfoGation, Case No. 17-cv-00646. But HTC had one more card to play. I did mention the “first responsive pleading,” right? HTC hadn’t yet filed an answer in this case. Well, depending on how you define “this case.” A final lesson:
Consolidation Compounds Waiver
In this matter, InfoGation filed multiple suits against HTC, which HTC subsequently agreed to consolidate. HTC asserted waiver had not occurred as they had not yet filed an answer to one of InfoGation’s complaints, arguing that, in consolidated suits, failure to answer one complaint means you have not answered all. Points for creativity. Unfortunately, Judge Huff found the opposite, i.e., HTC’s agreement to consolidate was, itself, one more step toward waiver because it acts as consent to the jurisdiction.
What do you think of this ruling? Was Judge Huff a little “heartless” post-Heartland or did HTC’s consolidation and filing of an Alice-based motion for judgment on the pleadings earn it a denial of change of venue?