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`Case 4:17-cv-03745-PJH Document 10 Filed 06/05/17 Page 1 of 9
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`FISHER-PRICE, INC. and
`MATTEL, INC.,
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`Plaintiffs,
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`vs.
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`DYNACRAFT BSC, INC.,
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`Defendant.
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`C.A. No. 17-51-LPS-CJB
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`OPENING BRIEF IN SUPPORT OF DEFENDANT DYNACRAFT BSC, INC.’S
`MOTION TO DISMISS FOR IMPROPER VENUE
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`
`John C. Phillips, Jr. (#110)
`PHILLIPS, GOLDMAN, MCLAUGHLIN &
`HALL, P.A.
`1200 North Broom Street
`Wilmington, DE 19806-4204
`302-655-4200
`jcp@pgmhlaw.com
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`Dated: June 5, 2017
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`
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`Of Counsel:
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`Arthur Gollwitzer III
`MICHAEL BEST & FRIEDRICH LLP
`2801 Via Fortuna, Suite 300
`Austin, TX 78746
`512-640-3161
`agollwitzer@michaelbest.com
`
`Larry L. Saret
`MICHAEL BEST & FRIEDRICH LLP
`444 W. Lake Street, Suite 3200
`Chicago, IL 60606
`312-222-0800
`llsaret@michaelbest.com
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`Rachel N. Bach
`MICHAEL BEST & FRIEDRICH LLP
`100 East Wisconsin Avenue, Suite 3300
`Milwaukee, WI 53202
`414-271-6560
`rnbach@michaelbest.com
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`Case 4:17-cv-03745-PJH Document 10 Filed 06/05/17 Page 2 of 9
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`TABLE OF CONTENTS
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`Introduction ........................................................................................................................................ 1
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`Nature and Stage of the Proceedings .................................................................................................. 1
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`Summary of Argument ....................................................................................................................... 2
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`Statement of Facts .............................................................................................................................. 2
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`Argument ............................................................................................................................................ 3
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`I. Dynacraft Resides in Massachusetts, not Delaware. .............................................................. 3
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`II. Dynacraft Does Not Have a Regular and Established Place of Business in This District. .... 4
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`III. The Court May Transfer This Case to the Northern District of California. ........................... 4
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`Conclusion .......................................................................................................................................... 5
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`CASES
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`Case 4:17-cv-03745-PJH Document 10 Filed 06/05/17 Page 3 of 9
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`TABLE OF AUTHORITIES
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`Page(s)
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`Clopay Corp. v. Newell Cos.,
`527 F. Supp. 733 (D. Del. 1981) .................................................................................................. 4
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`Fourco v. Transmirra,
`353 U.S. 222 (1957) ..................................................................................................................... 3
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`Stonite Products Co. v. Melvin Lloyd Co.,
`315 U.S. 561 (1942) ..................................................................................................................... 3
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`TC Heartland, LLC v. Kraft Foods Group Brands LLC,
`No. 16-341, 581 U.S. ___, Slip Op. at 1-2 (May 22, 2017) ..................................................... 1, 3
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`STATUTES
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`28 U.S.C. § 1391(b) ............................................................................................................................ 3
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`28 U.S.C. § 1391(c) ............................................................................................................................ 3
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`28 U.S.C. § 1400(b) ................................................................................................................ 1, 3, 4, 5
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`28 U.S.C. § 1406(a) ................................................................................................................ 1, 2, 4, 5
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`OTHER AUTHORITIES
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`Federal Rule of Civil Procedure 12(b)(3) ....................................................................................... 1, 5
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`ii
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`Case 4:17-cv-03745-PJH Document 10 Filed 06/05/17 Page 4 of 9
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`Introduction
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`Defendant Dynacraft BSC, Inc. (“Dynacraft”) does not reside in the State of Delaware
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`and does not have a regular and established place of business in the District of Delaware, as
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`plaintiffs Fisher-Price, Inc. and Mattel, Inc. concede in the Complaint. (D.I. 1 at ¶ 3.)
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`Nevertheless, plaintiffs brought this patent infringement suit in the District of Delaware under
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`the premise that venue is proper anywhere that a defendant-entity is subject to personal
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`jurisdiction. The United States Supreme Court, however, recently held that the sole and
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`exclusive venue in patent cases is in a judicial district in the state where a domestic corporate
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`defendant resides or where it commits acts of infringement and has a regular and established
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`place of business. TC Heartland, LLC v. Kraft Foods Group Brands LLC, No. 16-341, 581 U.S.
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`___, Slip Op. at 1-2 (May 22, 2017) (interpreting 28 U.S.C. § 1400(b)).
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`Based on the Supreme Court’s ruling in TC Heartland, venue in this District is legally
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`improper and this case must be dismissed. Accordingly, Dynacraft respectfully requests that this
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`Court dismiss this case pursuant to Federal Rule of Civil Procedure 12(b)(3) or transfer the case
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`to the Northern District of California as provided by 28 U.S.C. § 1406(a).
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`Nature and Stage of the Proceedings
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`On January 1, 2017, Fisher Price and Mattel filed a Complaint alleging that Dynacraft
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`manufacturers and sells products that infringe United States Patent Nos. 7,222,684 (the “’684
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`Patent”); 7,487,850 (the “’850 Patent”); 7,621,543 (the “’543 Patent”); and 7,950,978 (the “’978
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`Patent”). (D.I. 1 at ¶¶ 20-22, 29-30, 35-36, 41-42.) Dynacraft has not answered the Complaint
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`and now moves to dismiss the Complaint for the reasons set forth below.
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`1
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`Case 4:17-cv-03745-PJH Document 10 Filed 06/05/17 Page 5 of 9
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`Summary of Argument
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`For a domestic corporation, venue in a patent infringement action is proper only where
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`the corporation resides or where it has committed acts of infringement and has a regular and
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`established place of business. There is no dispute that Dynacraft is not incorporated in the State
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`of Delaware or that it does not have a regular and established place of business in this District.
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`Therefore, venue in this District is improper and this case should be dismissed.
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`Statement of Facts
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`Dynacraft is a corporation organized and existing under the laws of the State of
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`Massachusetts. See Declaration of David Castrucci (“Castrucci Decl.”), filed concurrently
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`herewith, at ¶ 1. Moreover, Dynacraft’s headquarters is located at 89 S. Kelly Road, American
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`Canyon, California. (Id. at ¶ 2.) Dynacraft employs about 40 employees at its headquarters,
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`including most of its corporate officers and product design staff. (Id.) At its headquarters,
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`Dynacraft’s operations include management, personnel, customer service, shipping, traffic, IT
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`and creative. (Id.) In other words, Dynacraft is a resident of Massachusetts and has a regular
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`and established place of business in California.
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`On January 17, 2017, plaintiffs filed this patent infringement lawsuit against Dynacraft in
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`the District of Delaware. (D.I. 1.) Plaintiffs allege no facts in the Complaint that Dynacraft
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`resides in Delaware or has a regular and established place of business in this District. Id.
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`Indeed, plaintiffs cannot do so, as Dynacraft is not incorporated in Delaware and does not have
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`any regular and established places of business in the District of Delaware, i.e., it has no
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`employees and does not have any physical facilities in Delaware. (Castrucci Decl. ¶¶ 3-4.)
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`2
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`Case 4:17-cv-03745-PJH Document 10 Filed 06/05/17 Page 6 of 9
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`Argument
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`In this case, plaintiffs rely on 28 U.S.C. § 1391(b) and (c) and § 1400(b) to allege that
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`venue is proper in this Court. (D.I. 1 at ¶ 7.) However, plaintiffs’ reliance on § 1391(b) and (c)
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`is misplaced because § 1400(b) “is the exclusive provision controlling venue in patent
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`infringement proceedings” and “Congress did not intend the Act of 1897 . . . to dovetail with the
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`general provisions relating to the venue of civil suits, but rather that it alone should control
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`venue in patent infringement proceedings.” Stonite Products Co. v. Melvin Lloyd Co., 315 U.S.
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`561, 563, 566 (1942) (emphasis added). See also Fourco v. Transmirra, 353 U.S. 222, 229
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`(1957) (“28 U.S.C. § 1400(b) is the sole and exclusive provision controlling venue in patent
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`infringement actions, and that it is not to be supplemented by the provisions of 28 U.S.C.§
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`1391(c).”) (emphasis added).
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`Under § 1400(b), patent infringement actions “may be brought in the judicial district
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`where the defendant resides, or where the defendant has committed acts of infringement and has
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`a regular and established place of business.” TC Heartland, No. 16-341, 581 U.S. ___, Slip Op.
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`at 1; 28 U.S.C. § 1400(b). Here, Dynacraft does not reside in Delaware and does not have a
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`regular and established place of business in this District as required by section 1400(b).
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`I.
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`Dynacraft Resides in Massachusetts, not Delaware.
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`The United States Supreme Court has unequivocally stated that “a domestic corporation
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`‘resides’ only in its State of incorporation for purposes of the patent venue statute.” TC
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`Heartland, No. 16-341, 581 U.S. ___, Slip Op. at 2; see also Fourco v. Transmirra, 353 U.S.
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`222, 229 (1957) (the phrase “where the defendant resides” in § 1400(b) “mean[s] the state of
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`incorporation only”). In this case, it is undisputed that Dynacraft is incorporated in
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`Massachusetts. Given that Dynacraft “resides” (i.e., is incorporated) in Massachusetts, not
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`Case 4:17-cv-03745-PJH Document 10 Filed 06/05/17 Page 7 of 9
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`Delaware, for purposes of § 1400(b), venue cannot be proper here based on Dynacraft’s
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`residence.
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`II.
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`Dynacraft Does Not Have a Regular and Established Place of Business in This
`District.
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`Moreover, plaintiffs have set forth no facts establishing that Dynacraft has a regular and
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`established place of business in this District – because it does not. To establish that venue is
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`proper in a given district based on the “regular and established place of business” prong of
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`section 1400, the defendant must be “regularly engaged in carrying on a substantial part of its
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`ordinary business on a permanent basis in a physical location within the district over which it
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`exercises some measure of control.” Clopay Corp. v. Newell Cos., 527 F. Supp. 733, 740 (D.
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`Del. 1981). In this case, Dynacraft has a principal place of business at 89 S. Kelly Road,
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`American Canyon, California, which sits in the Northern District of California. Dynacraft does
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`not have any regular and established places of business in the District of Delaware; specifically it
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`has no employees and does not have any physical facilities in Delaware. (Castrucci Decl. ¶ 4.)
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`Therefore, venue under the “regular and established place of business” prong would be proper in
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`the Northern District of California, not the District of Delaware.
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`III. The Court May Transfer This Case to the Northern District of California.
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`The Court is authorized to transfer this case to another Court under 28 U.S.C. § 1406(a).
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`Here, the most appropriate permissible forum would be the Northern District of California.
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`Dynacraft maintains its headquarters in northern California, just outside of San Francisco.
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`Dynacraft employs approximately 40 people at that headquarters, including most of its officers
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`and product design staff, and its operations there include management, personnel, customer
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`service, shipping, traffic, IT, and creative. (Castrucci Decl. at ¶ 2.) Accordingly, the relevant
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`documentary and electronic records also are maintained at Dynacraft’s California headquarters.
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`Case 4:17-cv-03745-PJH Document 10 Filed 06/05/17 Page 8 of 9
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`Therefore, this Court should either dismiss this case outright under Rule 12(b)(3) or transfer the
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`case to the Northern District of California under § 1406(a).
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`Conclusion
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`Given that 28 U.S.C. § 1400(b) is the sole and exclusive provision controlling venue in
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`patent infringement actions, this Court should dismiss this case based on improper venue. Fed.
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`R. Civ. P. 12(b)(3). Dynacraft is incorporated in Massachusetts and has a regular and established
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`place of business in the Northern District of California. Moreover, as indicated above, Dynacraft
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`does not reside in Delaware and does not have any regular and established places of business in
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`this District. On these undisputed facts alone, as a matter of law, venue is improper in this Court
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`and this case should be dismissed. For these reasons, Dynacraft respectfully requests that this
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`Court grant its motion to dismiss for improper venue under Rule 12(b)(3). In the alternative, this
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`Court could transfer this case to the Northern District of California where Dynacraft has its
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`principal place of business pursuant to 28 U.S.C. § 1406(a).
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`Case 4:17-cv-03745-PJH Document 10 Filed 06/05/17 Page 9 of 9
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`Dated: June 5, 2017
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`Respectfully submitted,
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`/s/ John C. Phillips, Jr.
`John C. Phillips, Jr. (#110)
`David A. Bilson (#4986)
`PHILLIPS, GOLDMAN, MCLAUGHLIN &
`HALL
`1200 North Broom Street
`Wilmington, DE 19806-4204
`Telephone: 302-655-4200
`jcp@pgmhlaw.com
`dab@pgmhlaw.com
`
`Arthur Gollwitzer III
` agollwitzer@michaelbest.com
`MICHAEL BEST & FRIEDRICH LLP
`2801 Via Fortuna, Suite 300
`Austin, TX 78746
`Telephone: 512-640-3161
`
`Larry L. Saret
` llsaret@michaelbest.com
`MICHAEL BEST & FRIEDRICH LLP
`444 W. Lake Street, Suite 3200
`Chicago, IL 60606
`Telephone: 312-222-0800
`
`Rachel N. Bach
` rnbach@michaelbest.com
`MICHAEL BEST & FRIEDRICH LLP
`100 East Wisconsin Avenue, Suite 3300
`Milwaukee, WI 53202
`Telephone: 414-271-6560
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`Attorneys for Defendant Dynacraft BSC, Inc.
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