A Sales Agent’s Home Office May Qualify as a Regular and Established Place of Business
In our continued post-TC Heartland coverage, the Southern District of New York recently held that an employee’s home office in New York constituted a “regular and established place of business” in the state as required by the patent venue statute, 28 U.S.C. § 1400(b). RegenLab USA LLC v. Estar Technologies Ltd. et al., 16-cv-8771 (S.D.N.Y. Aug. 15, 2018). In RegenLab, the court found that defendant Eclipse’s business model required its employees to work out of their homes, thereby ratifying a worker’s home in the Southern District as a place of business under In re Cray, despite Eclipse’s failure to satisfy venue otherwise.
The court found that an Eclipse employee’s sales territory covered the New York and New Jersey regions, and the agent worked out of a home office in New York. The New York employee’s home office was not merely a “sporadic” or isolated work environment, but rather that the employee conducted “business” out of the home office in New York in various ways. The crux of the court’s reasoning seems to turn on the court’s recognition that because “all Eclipse employees work from home, home offices constitute a primary physical location for Eclipse’s business.”
The court further found that, while Eclipse did not specifically require that sales people live in their assigned territory, Eclipse did try “to hire people living within their assigned sales territory.” Eclipse’s job posting requirements necessitated working within a sales territory where the sales agent must “[i]dentify and qualify prospective customers, demonstrate company products and establish new business” and “develop and maintain local luminaries, workshops and training centers.” Moreover, sales agents must contact potential customers at their offices and conduct trainings when products arrive, which necessitated proximity to customers.
In consideration of these facts, the Court applied the factors from In re Cray and found that the home office qualified as a regular and established place of business in New York of the defendant Eclipse, and that venue was proper.