Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 1 of 50 PageID: 2924
`
`Justin T. Quinn
`ROBINSON MILLER LLC
`One Newark Center, 19th Floor
`Newark, New Jersey 07102
`973-690-5400
`jquinn@rwmlegal.com
`
`Attorneys for Defendants
`
`
`
`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
`
`
`WAG Acquisition, L.L.C.,
`
`
`
`
`
`
`
`Plaintiff,
`
`v.
`
`Multi Media, L.L.C., et al.,
`
`
`
`
`
`
`
`Defendants.
`
`WAG Acquisition, L.L.C.,
`
`
`
`
`
`
`
`Plaintiff,
`
`v.
`
`Data Conversions, Inc., et al.,
`
`
`
`
`
`
`
`Defendants.
`
`
`
`
`Civil Action No. 2:14-cv-02340
`(ES)(MAH)
`
`
`
`
`
`
`Civil Action No. 2:14-cv-02345
`(ES)(MAH)
`
`
`
`
`
`
`

`

`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 2 of 50 PageID: 2925
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`WAG Acquisition, L.L.C.,
`
`
`
`Plaintiff,
`
`v.
`
`Flying Crocodile, Inc., et al.,
`
`
`
`
`
`
`
`Defendants.
`
`WAG Acquisition, L.L.C.,
`
`
`
`Plaintiff,
`
`v.
`
`Gattyán Group S.à r.l., et al.,
`
`
`
`
`
`
`
`Defendants.
`
`WAG Acquisition, L.L.C.,
`
`
`
`Plaintiff,
`
`v.
`
`FriendFinder Networks Inc., et al.,
`
`
`
`
`
`
`
`Defendants.
`
`WAG Acquisition, L.L.C.,
`
`
`
`Plaintiff,
`
`v.
`
`Vubeology, Inc., et al.,
`
`
`
`
`
`
`
`Defendants.
`
`
`
`Civil Action No. 2:14-cv-02674
`(ES)(MAH)
`
`
`
`
`
`
`Civil Action No. 2:14-cv-02832
`(ES) (MAH)
`
`
`
`
`Civil Action No. 2:14-cv-03456
`(ES)(MAH)
`
`
`
`Civil Action No.2:14-cv-04531
`(ES)(MAH)
`
`
`
`

`

`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 3 of 50 PageID: 2926
`
`
`
`Civil Action No.2:15-cv-03581
`(ES)(MAH)
`
`WAG Acquisition, L.L.C.,
`
`
`
`Plaintiff,
`
`v.
`
`WebPower, Inc., d/b/a WP Associates
`
`et al.,
`
`
`
`
`
`
`
`Defendants.
`
`
`
`
`MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’ JOINT
`MOTION TO DISMISS OR, IN THE ALTERNATIVE, MOTION TO
`TRANSFER VENUE IN VIEW OF THE SUPREME COURT’S
`TC HEARTLAND DECISION
`
`
`
`

`

`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 4 of 50 PageID: 2927
`
`TABLE OF CONTENTS
`
`
`
`I.
`
`Introduction ...................................................................................................... 1
`
`II.
`
`Procedural Posture ........................................................................................... 3
`
`III. Argument ......................................................................................................... 5
`
`A.
`
`Legal Standard. ...................................................................................... 5
`
`B.
`
`Venue Is Improper In the District of New Jersey. ................................ 9
`
`1. Multi Media (Case No. 14-cv-02340). ......................................10
`
`2. WMM (Case No. 14-cv-02345). ...............................................10
`
`3.
`
`4.
`
`5.
`
`6.
`
`ICF Defendants (Case No. 14-cv-02674). ................................11
`
`Docler Media (Case No. 14-cv-02832). ....................................12
`
`FriendFinder and StreamRay (Case No. 14-cv-03456). ...........13
`
`Vubeology, Inc. (Case No. 14-cv-04531). ................................14
`
`7. WebPower (Case No. 15-cv-03581). ........................................15
`
`C.
`
`28 U.S.C. § 1406(a) Requires Dismissal for Improper Venue,
`or Transfer. ..........................................................................................16
`
`D. Defendants Have Not Waived Their Improper Venue Defense. ........17
`
`1.
`
`2.
`
`The Intervening-Change-In-Law Exception. ............................17
`
`Prior to TC Heartland, A Corporate Defendant Was
`Deemed to “Reside” Anywhere It Was Subject to
`Personal Jurisdiction. ................................................................20
`
`i
`
`

`

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`
`3.
`
`4.
`
`An Improper Venue Defense Was Contrary to VE
`Holding and Then-Existing Jurisprudence in the District
`of New Jersey. ...........................................................................23
`
`Any Reliance on Cobalt Boats Should Be Rejected, as
`Recent Decisions Confirm that TC Heartland Abrogated
`Nearly 30 Years of Patent Venue Law. ....................................27
`
`E.
`
`Request to Transfer the Action Against Duodecad
`Luxembourg For Convenience and in the Interest of Justice. ............33
`
`IV. Conclusion .....................................................................................................36
`
`
`
`
`
`
`
`ii
`
`

`

`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 6 of 50 PageID: 2929
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`
`Allied Old English, Inc. v. Uwajimaya, Inc.,
`Civil Action No. 11-1239, 2012 U.S. Dist. LEXIS 116261 (D.N.J.
`Aug. 16, 2012) .................................................................................................... 35
`
`Amax, Inc. v. ACCO Brands Corp.,
`2017 WL 2818986 (D. Mass. June 29, 2017) ............................................... 30, 32
`
`Atl. Coast Demolition & Recycling, Inc. v. Bd. Of Chosen Freeholders
`of Atl. Cnty.,
`112 F.3d 652 (3d Cir. 1997) ................................................................................. 7
`
`Ballard Med. Products v. Concord Laboratories, Inc.,
`700 F. Supp. 796 (D. Del. 1988) ........................................................................... 8
`
`Bennett v. City of Holyoke,
`362 F.3d 1 (1st Cir. 2004) ............................................................................. 19, 20
`
`Century Wrecker Corp. v. Vulcan Equipment Co., Ltd.,
`733 F. Supp. 1170 (E.D. Tenn. 1989) ................................................................. 22
`
`Cobalt Boats LLC v. Sea Ray Boats, Inc.,
`No. 2:15-cv-00021-HCM-LRL, 2017 WL 2556679 (E.D. Va. June
`7, 2017) ........................................................................................................passim
`
`In re Cordis Corp.,
`769 F.2d 733 (Fed. Cir. 1985) .......................................................................... 8, 9
`
`In re: Cray Inc.,
`Fed. Cir. No. 17-00129, ECF Dkt. 2-1 ................................................................. 9
`
`Curtis Pub. Co. v. Butts,
`388 U.S. 130 (1967) ............................................................................................ 19
`
`DUSA Pharm., Inc. v. River’s Edge Pharm., LLC,
`No. 06-1843, 2006 WL 1320049 (D.N.J. May 15, 2006) .............................. 6, 25
`
`iii
`
`

`

`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 7 of 50 PageID: 2930
`
`Elbit Sys. Land v. Hughes Network Sys., LLC,
`No. 2:15-cv-37, 2017 U.S. Dist. LEXIS 94495, 2017 WL 2651618
`(E.D. Tex. June 20, 2017) ............................................................................. 30, 32
`
`Engel v. CBS Inc.,
`886 F. Supp. 728 (C.D. Cal. 1995) ..................................................................... 19
`
`Fourco Glass Co. v. Transmirra Products Corp.,
`353 U.S. 222 (1957) .....................................................................................passim
`
`Gilmore v. Palestinian Interim Self-Gov’t Auth.,
`843 F.3d 958 (D.C. Cir. 2016) ............................................................................ 18
`
`Glater v. Eli Lilly & Co.,
`712 F.2d 735 (1st Cir. 1983) ............................................................................... 18
`
`Goffe v. Blake,
`605 F. Supp. 1151 (D. Del. Mar. 27, 1985) ........................................................ 17
`
`Hand Held Products, Inc. v. Code Corp.,
`No. 17-167, 2017 WL 3085859 (D.S.C. July 18, 2017) ........................... 2, 30, 33
`
`Harper v. VA Dept. of Taxation,
`509 U.S. 86 (1993) ............................................................................................ 2, 7
`
`Hart v. Massanari,
`266 F.3d 1155 (9th Cir. 2001) ...................................................................... 26, 27
`
`Hawknet, Ltd. v. Overseas Shipping Agencies,
`590 F.3d 87 (2d Cir. 2009) ........................................................................... 20, 27
`
`Holland v. Big River Minerals Corp.,
`181 F.3d 597 (4th Cir. 1999) .............................................................................. 18
`
`Holzsager v. Valley Hospital,
`646 F.2d 792 (2d Cir. 1981) ................................................................... 18, 19, 27
`
`iLife Techs. Inc. v. Nintendo of Am.,
`No. 3:13-cv-04987 (N.D. Tex. June 27, 2017) ............................................. 30, 32
`
`Infogation Corp. v. HTC Corp.,
`No. 16-cv-01902, 2017 WL 2869717 (S.D. Cal. July 5, 2017) .................... 29, 33
`
`iv
`
`

`

`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 8 of 50 PageID: 2931
`
`Jakimas v. Hoffmann-La Roche, Inc.,
`485 F.3d 770 (3d Cir. 2007) ................................................................................. 7
`
`Johnson Gas Appliance Co. v. VE Holding Corp.,
`No. 90-1186, 111 S. Ct. 1315 (Mar. 18, 1991) ............................................. 22, 25
`
`Jumara v. State Farm Ins. Co.,
`55 F.3d 873 (3d Cir. 1995) ........................................................................... 35, 36
`
`Laguna Constr. Co., Inc. v. Carter,
`828 F.3d 1364 (Fed. Cir. 2016) .......................................................................... 20
`
`Landmark Networks, LLC v. Valve Corp.,
`No. 16-cv-1382 (E.D. Tex. May 30, 2017) .......................................................... 2
`
`Leroy v. Great W. United Corp.,
`443 U.S. 173, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979) ........................................ 34
`
`Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach,
`523 U.S. 26, 118 S.Ct. 956, 140 L.Ed.2d 62 (1998) .......................................... 34
`
`M & R Marking Systems, Inc. v. Top Stamp, Inc.,
`No. 96-828, 1996 WL 805485 (D.N.J. Nov. 20, 1996) .................................. 7, 26
`
`MAGICorp. v. Kinetic Presentations, Inc.,
`718 F. Supp. 334 (D.N.J. 1989) .................................................................... 5, 8, 9
`
`Master Cutlery, Inc. v. Panther Trading Co., Inc.,
`No. 12-4493, 2012 WL 6597056 (D.N.J. Dec. 17, 2012) ........................ 6, 25, 37
`
`McGinley v. Luv N’ Care, Ltd.,
`No. 16-cv-00283 (W.D. Mo. June 23, 2017) ........................................................ 2
`
`Memon v. Thompson,
`2014 WL 6471636 (D.N.J. Nov. 18, 2014) .......................................................... 7
`
`Navico, Inc. v. Garmin Int’l, Inc.,
`No. 16-cv-190, 2017 WL 2957882 (E.D. Tex. July 11, 2017) ..................... 29, 33
`
`NeuroRepair, Inc. v. Nath Law Grp.,
`781 F.3d 1340 (Fed. Cir. 2015) ............................................................................ 7
`
`v
`
`

`

`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 9 of 50 PageID: 2932
`
`Olberding v. Illinois Central,
`346 U.S. 338, 74 S.Ct. 83, 98 L.Ed. 39 (1953) ................................................... 33
`
`OptoLum, Inc. v. Cree, Inc.,
`No. 16-03828, 2017 WL 3130642 (D. Ariz. July 24, 2017) .......................passim
`
`Raytheon Co. v. Cray, Inc.,
`No. 15-cv-01554, 2017 WL 2813896 (E.D. Tex. June 29, 2017) .................. 9, 28
`
`Reckitt Benckiser Pharm. Inc. v. Biodelivery Sciences Int’l, Inc.,
`No. 14-5892, 2015 WL 4461511 (D.N.J. July 21, 2015) ............................... 6, 25
`
`Reebok Int’l Ltd. v. TRB Acquisitions, LLC,
`No. 3:16-cv-1618, 2017 WL 3016034 (D. Or. July 14, 2017) ........................... 29
`
`Refined Recommendation Corp. v. Netflix, Inc.,
`Civil Action No. 07-CV-04981, 2008 U.S. Dist. LEXIS 11541
`(D.N.J. Feb. 14, 2008) .................................................................................. 35, 37
`
`Regents of Univ. of California v. Eli Lilly & Co.,
`734 F. Supp. 911 (N.D. Cal. 1990) ..................................................................... 22
`
`Robert Bosch, LLC v. Pylon Mfg. Corp.,
`719 F.3d 1305 (Fed. Cir. 2013) (en banc) .......................................................... 26
`
`Saint Lawrence Communications LLC v. HTC Corp.,
`2016 WL 1077950 (E.D. Tex. Mar. 18, 2016) ................................................... 24
`
`Script Sec. Sols. L.L.C. v. Amazon.com, Inc.
`170 F. Supp. 3d 928, 935 (E.D. Tex. 2016) (Bryson, J., sitting by
`designation) ......................................................................................................... 24
`
`In re Sea Ray Boats, Inc.,
`No. 2017-124, 2017 WL 2577399 (Fed. Cir. June 9, 2017)
`(Newman, J. dissenting).......................................................................... 29, 30, 33
`
`In re TC Heartland LLC,
`821 F.3d 1338 (Fed. Cir. 2016) .................................................................... 23, 27
`
`TC Heartland LLC v. Kraft Foods Group Brands LLC,
`137 S. Ct. 1514 (2017) .................................................................................passim
`
`vi
`
`

`

`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 10 of 50 PageID: 2933
`
`Telebrands Corp. v. Martfive, LLC,
`No. 13-3374, 2013 WL 4675558 (D.N.J. Aug. 30, 2013) ........................ 6, 25, 37
`
`VE Holding Corp. v. Johnson Gas Appliance Co.,
`917 F.2d 1574 (Fed. Cir. 1990), cert. denied, 111 S. Ct. 1315
`(1991) ...........................................................................................................passim
`
`VP Intellectual Properties, LLC v. Imtec Corp.,
`No. 99-3136, 1999 WL 1125204 (D.N.J. Dec. 9, 1999) ................................ 6, 25
`
`Vulcan Equip. Co., v. Century Wrecker Corp.,
`1991 WL 11176416 (U.S.) (denied petition for writ of certiorari at
`111 S. Ct. 1587) .................................................................................................. 24
`
`W.S. Tyler Co. v. Ludlow-Saylor Wire Co.,
`236 U.S. 723 (1915) .............................................................................................. 9
`
`Warner-Lambert Co. v. C.B. Fleet Co., Inc.,
`583 F. Supp. 519 (D.N.J. 1984) ............................................................................ 8
`
`Weiss v. Nat’l Westminster Bank PLC,
`176 F. Supp. 3d 264 (E.D.N.Y. 2016) ................................................................ 20
`
`Westech Aerosol Corp. v. 3M Co.,
`No. 3:17-cv-05067, 2017 WL 2671297 (W.D. Wash. June 21,
`2017) ............................................................................................................passim
`
`Zeneca Ltd. v. Mylan Pharm., Inc.,
`No. Civ. A. S 96-1736, 1996 WL 925640 (D. Md. Jan. 6, 1996) ...................... 19
`
`Statutes and Court Rules
`
`28 U.S.C. § 1391 ...............................................................................................passim
`
`28 U.S.C. § 1391(a) ................................................................................................. 23
`
`28 U.S.C. § 1391(c) ..........................................................................................passim
`
`28 U.S.C. § 1400(b) ..........................................................................................passim
`
`28 U.S.C. § 1404(a) ........................................................................................... 34, 35
`
`28 U.S.C. § 1406 .................................................................................................... 1, 3
`
`vii
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`

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`28 U.S.C. § 1406(a) ....................................................................................... 5, 17, 38
`
`Act of Mar. 3, 1897, ch. 395, 29 Stat. 695 ............................................................... 21
`
`Fed. R. Civ. P. 12(b)(3) .................................................................................... 1, 5, 18
`
`Fed. R. Civ. P. 12(h) .......................................................................................... 18, 27
`
`Fed. R. Civ. P. 12(h)(1) ............................................................................................ 18
`
`Federal Courts Jurisdiction and Venue Clarification Act of 2011, §
`202, 125 Stat. 763 ............................................................................................... 23
`
`Judicial Improvements and Access to Justice Act, § 1013(a), 102 Stat.
`4669 ..................................................................................................................... 21
`
`Other Authorities
`
`R. Davis, Lawmakers Slam “Reprehensible” New Gilstrap Venue
`Rules, Law 360 (July 13, 2017) ............................................................................ 9
`
`
`
`viii
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`

`

`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 12 of 50 PageID: 2935
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`I.
`
`INTRODUCTION
`
`Defendants in the above-captioned cases respectfully submit this brief in
`
`support of their Joint Motion to Dismiss, or in the Alternative, Motion to Transfer
`
`Venue in View of the Supreme Court’s decision in TC Heartland, and pursuant to
`
`Fed. R. Civ. P. 12(b)(3) and 28 U.S.C. §§ 1400(b), 1406.
`
`The patent venue statute, 28 U.S.C. § 1400(b), provides that “[a]ny civil action
`
`for patent infringement may be brought in the judicial district where the defendant
`
`resides, or where the defendant has committed acts of infringement and has a regular
`
`and established place of business.” For nearly thirty years, federal courts applied
`
`the general venue statute’s residence standard—that a corporate defendant “resides”
`
`wherever a corporation is subject to personal jurisdiction—to Section 1400(b). See,
`
`e.g., VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1578 (Fed.
`
`Cir. 1990) (applying 28 U.S.C. § 1391(c)’s residency provision to the patent venue
`
`statute), cert. denied, 111 S. Ct. 1315 (1991). Accordingly, at the time WAG filed
`
`these cases, venue in a patent infringement action was proper wherever the corporate
`
`defendant was subject to personal jurisdiction.
`
`On May 22, 2017, the Supreme Court substantially restricted venue options
`
`in patent infringement actions, abrogating nearly thirty years of patent venue
`
`jurisprudence first announced by the Federal Circuit in VE Holding. See TC
`
`Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017). Now,
`
`
`
`1
`
`

`

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`“[a]s applied to domestic corporations, ‘reside[nce]’ in § 1400(b) refers only to the
`
`State of incorporation.” Id. at 1521 (emphasis added).
`
`Because the Supreme Court announced a new principle of federal venue law,
`
`the TC Heartland decision applies retroactively. See Harper v. VA Dept. of
`
`Taxation, 509 U.S. 86, 97 (1993) (when the Supreme Court applies “a rule of federal
`
`law to the parties before it, that rule is the controlling interpretation of federal law
`
`and must be given full retroactive effect in all cases still open on direct review”).
`
`Thus, for all existing and future patent infringement actions, venue is proper only
`
`where: (1) the corporate defendant is incorporated; or (2) where the corporate
`
`defendant has committed acts of infringement and has a regular and established place
`
`of business. Importantly, courts have begun to transfer cases pursuant to TC
`
`Heartland. See OptoLum, Inc. v. Cree, Inc., No. 16-03828, 2017 WL 3130642 (D.
`
`Ariz. July 24, 2017); Hand Held Products, Inc. v. Code Corp., No. 17-167, 2017
`
`WL 3085859 (D.S.C. July 18, 2017); McGinley v. Luv N’ Care, Ltd., No. 16-cv-
`
`00283, ECF Dkt. 63 (W.D. Mo. June 23, 2017); Landmark Networks, LLC v. Valve
`
`Corp., No. 16-cv-1382, ECF Dkt. 41, 43 (E.D. Tex. May 30, 2017).1 And, myriad
`
`district courts are newly entertaining venue motions.
`
`
`1 See Declaration of Justin T. Quinn (“Quinn Decl.”), Exs. A-B for copies of the
`McGinley and Landmark Networks transfer orders.
`
`
`
`2
`
`

`

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`
`By virtue of the Supreme Court’s supervening decision in TC Heartland,
`
`venue in the District of New Jersey is now improper. Defendants are not
`
`incorporated in New Jersey, nor do they have a regular or established place of
`
`business within this judicial district. Because WAG cannot establish that venue is
`
`proper in the District of New Jersey, Defendants respectfully request that the Court
`
`grant Defendants’ Joint Motion to Dismiss, or in the Alternative, to Transfer Venue
`
`pursuant to 28 U.S.C. §§ 1400(b) and 1406.
`
`II.
`
`PROCEDURAL POSTURE
`
`Since March 2014, WAG has filed over seven actions alleging various
`
`theories of patent infringement against a plethora of parties, including still unnamed
`
`defendants known only as “John Does 1-20” (the “WAG actions”). (See No. 14-cv-
`
`02340, ECF Dkt. 72-1 at 6.)
`
`On January 12, 2015, Defendants moved to dismiss the WAG actions on
`
`various grounds. (See No. 14-cv-02340, ECF Dkt. 48, at 1-70.) At oral argument,
`
`the Court recognized the patent eligibility problems of WAG’s patents, and
`
`expressed other concerns relating to invalidity and infringement, but felt these “good
`
`arguments” on liability should be decided at claim construction and/or summary
`
`judgment:
`
`I really do think that some of these issues are best left for summary
`judgment. Some of these issues are best left after claim construction.
`
`
`
`
`
`*
`
`
`
`
`
`*
`
`3
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`
`
` *
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`

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`
`
`So my issue is, you are citing it to hold something at an MTD stage
`when the argument and the problems that the language may inevitably
`present for the plaintiff at a later stage when we are talking about
`indefiniteness is not ripe for this Court’s consideration at this juncture.
`
`
`
`
`
`*
`
`
`
`
`
`*
`
`
`
` *
`
`
`THE COURT: How can you say that to me? All of these arguments
`say to me that we are going to have very good arguments at a later
`point in time.
`
`
`
`
`
`*
`
`
`
`
`
`*
`
`
`
` *
`
` I
`
` am not saying that a fight for another day, you may prevail when we
`are dealing with obviousness, when we are dealing with other issues
`that are possibly, based on what I read today, potentially a problem
`for the plaintiff.
`
`
`(See July 29, 2015 Transcript of MTD at 9:23-10:1, 54:22-55:2, 95:25-96:2, 126:23-
`
`127:2 (emphases added).) On September 10, 2015, the Court denied Defendants’
`
`motion to dismiss, stating inter alia, “that claim construction is necessary in this case
`
`before [the Court] can determine whether WAG’s patents are invalid under § 101.”
`
`(See No. 14-cv-02340, ECF Dkt. 61 at 12.)
`
`On September 29, 2016, the Court bifurcated liability and damages discovery.
`
`(See No. 14-cv-02340, ECF Dkt. 107.) The parties completed liability-related fact
`
`discovery on June 30, 2016 pursuant to the Amended Discovery Plan. (See No. 14-
`
`cv-02340, ECF Dkt. 139.) Although liability-related fact discovery has concluded,
`
`the WAG Actions remain in a relatively early stage of litigation: the parties’ Joint
`
`Claim Construction and Prehearing Statement has not been submitted, Markman
`
`
`
`4
`
`

`

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`
`briefing has yet to commence and the Court has not yet undertaken claim
`
`construction activities. Indeed, pending IPR decisions due at the end of December
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`and early January may invalidate ten of WAG’s asserted claims. Additionally, the
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`liability expert phase has not started, no damages discovery has taken place, there
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`are no motions for summary judgment pending, and no trial date has been set.
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`III.
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`ARGUMENT
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`A. Legal Standard.
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`
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`Federal Rule of Civil Procedure 12(b)(3) provides that a party may move to
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`dismiss a case for “improper venue.” Plaintiff bears the burden of establishing
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`proper venue. See MAGICorp. v. Kinetic Presentations, Inc., 718 F. Supp. 334, 339
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`(D.N.J. 1989). Upon a finding of improper venue, the district court is required to
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`either dismiss or transfer the case to another court:
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`The district court of a district in which is filed a case laying venue in
`the wrong division or district shall dismiss, or if it be in the interest of
`justice, transfer such case to any district or division in which it could
`have been brought.
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`28 U.S.C. § 1406(a) (emphasis added). Section 1406(a) uses the mandatory
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`language “shall dismiss”, and therefore, a district court must either dismiss or
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`transfer a case filed in an improper venue.
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`The patent venue statute, 28 U.S.C. § 1400(b), provides two avenues for
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`determining the proper venue in a patent infringement action. First, venue is proper
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`in any “judicial district where the defendant resides”. 28 U.S.C. § 1400(b).
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`Significantly, when these patent infringement lawsuits commenced in 2014 and
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`2015, the Federal Circuit and the District of New Jersey consistently held that a
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`domestic corporation was deemed to “reside” in any judicial district in which the
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`defendant was subject to personal jurisdiction and sold an allegedly infringing
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`product. See, e.g., VE Holding, 917 F.2d at 1578 (applying 28 U.S.C. § 1391(c)’s
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`residency provision to the patent venue statute); supra at 1; Reckitt Benckiser Pharm.
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`Inc. v. Biodelivery Sciences Int’l, Inc., No. 14-5892, 2015 WL 4461511 at *3 (D.N.J.
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`July 21, 2015) (adopting VE Holding); Telebrands Corp. v. Martfive, LLC, No. 13-
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`3374, 2013 WL 4675558, at *4 (D.N.J. Aug. 30, 2013) (citing VE Holding and
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`noting that the Federal Circuit has interpreted the patent venue statute “as conferring
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`nationwide jurisdiction as Section 1391 defines where a defendant resides for venue
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`purposes as where he is subject to a court’s personal jurisdiction”).2 Following TC
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`Hedecartland, however, a domestic corporation’s “residence” now is defined
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`exclusively as the State of incorporation. 137 S. Ct. at 1521.
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`2 See also Master Cutlery, Inc. v. Panther Trading Co., Inc., No. 12-4493, 2012 WL
`6597056, at *2 (D.N.J. Dec. 17, 2012) (same); DUSA Pharm., Inc. v. River’s Edge
`Pharm., LLC, No. 06-1843, 2006 WL 1320049 at *2 n.1 (D.N.J. May 15, 2006)
`(adopting VE Holding for the proposition that the 1988 amendments to 28 U.S.C.
`§ 1391(c) apply to the patent venue statute); VP Intellectual Properties, LLC v. Imtec
`Corp., No. 99-3136, 1999 WL 1125204 (D.N.J. Dec. 9, 1999) (adopting VE Holding
`and holding that Sec. 1391(c)’s residence standard applies to the patent venue
`statute); M & R Marking Systems, Inc. v. Top Stamp, Inc., No. 96-828, 1996 WL
`805485, at *8-9 (D.N.J. Nov. 20, 1996).
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`6
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`Importantly, TC Heartland applies retroactively to the WAG Actions. When
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`the Supreme Court applies “a rule of federal law to the parties before it, that rule is
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`the controlling interpretation of federal law and must be given full retroactive effect
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`in all cases still open on direct review and as to all events, regardless of whether such
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`events predate or postdate the announcement of the rule.” See Harper, 509 U.S. at
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`97 (emphasis added); supra at 2. The Federal Circuit and Third Circuit have
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`followed the Harper decision and consistently recognized that a new principle of
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`law will be applied retroactively. See, e.g., NeuroRepair, Inc. v. Nath Law Grp., 781
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`F.3d 1340, 1344 (Fed. Cir. 2015) (adopting Harper even though the “events in the
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`present matter transpired prior to the decision”); Jakimas v. Hoffmann-La Roche,
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`Inc., 485 F.3d 770, 781 n.18 (3d Cir. 2007) (“We see no reason in this case to depart
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`from the general rule of retroactive application.”); Atl. Coast Demolition &
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`Recycling, Inc. v. Bd. Of Chosen Freeholders of Atl. Cnty., 112 F.3d 652, 672 (3d
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`Cir. 1997); Memon v. Thompson, 2014 WL 6471636, at *3 (D.N.J. Nov. 18, 2014)
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`(noting that in Harper, “the Supreme Court’s latest retroactivity jurisprudence has
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`overruled Chevron Oil’s equitable balancing test as the determinant of whether a
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`new principle of law will be applied retroactively”).
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`Venue also is proper in any judicial district “where the defendant has
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`committed acts of infringement and has a regular and established place of business.”
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`28 U.S.C. § 1400(b) (emphasis added). In evaluating this second prong of
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`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 19 of 50 PageID: 2942
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`§ 1400(b), the Federal Circuit and district courts within this Circuit have consistently
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`looked at whether the corporate defendant has a “permanent and continuous
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`presence” in the judicial district. See, e.g., In re Cordis Corp., 769 F.2d 733, 737
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`(Fed. Cir. 1985); MAGICorp., 718 F. Supp. at 340-41 (finding improper venue in
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`spite of defendant’s lease of office space in the district, as plaintiff failed to prove
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`that “defendant engages in a substantial part of its ordinary business in a continuous
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`manner in the district”); Ballard Med. Products v. Concord Laboratories, Inc., 700
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`F. Supp. 796, 800 (D. Del. 1988) (noting that the “majority of courts have found that
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`the physical location over which defendant exercises control and where defendant
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`engages in a substantial part of its ordinary business in a continuous manner is
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`sufficient to find a regular and established place of business”); Warner-Lambert Co.
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`v. C.B. Fleet Co., Inc., 583 F. Supp. 519, 521-526 (D.N.J. 1984) (finding improper
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`venue in spite of presence of three sales representatives working out of their own
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`homes in New Jersey).
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`For instance in MAGICorp., the District of New Jersey found improper venue
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`even though the corporate defendant leased office space in New Jersey, because the
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`defendant’s ordinary business—e.g., collecting payments, consummating sales,
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`shipping orders, processing warranty work, and customer assistance—was
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`conducted outside of the judicial district. 718 F. Supp. at 341. Thus, the patent
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`venue statute is not satisfied merely where a corporate defendant is “doing business.”
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`Case 2:14-cv-02340-ES-MAH Document 153-1 Filed 07/28/17 Page 20 of 50 PageID: 2943
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`Id. at 340 (“This prong of the venue test, however, requires greater contacts than
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`were necessary under the “doing business” test formerly articulated in the generic
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`venue statute, 28 U.S.C. § 1391(c).”); see also W.S. Tyler Co. v. Ludlow-Saylor Wire
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`Co., 236 U.S. 723, 725 (1915) (holding that a satellite office paid for by the corporate
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`defendant and occupied by a single employee is not a “regular and established place
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`of business”).3
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`B. Venue Is Improper In the District of New Jersey.
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`WAG cannot satisfy either prong of § 1400(b). Because a corporation’s
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`residence for purposes of the patent venue statute is its place of incorporation, see
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`TC Heartland, 137 S. Ct. at 1521, WAG cannot meet the first prong of § 1400(b) as
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`none of the Defendants are incorporated in New Jersey. See infra Secs. III.B.1-7.
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`The second prong of § 1400(b) is equally problematic for WAG. As demonstrated
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`
`3 Defendants are aware of the recent decision in Raytheon Co. v. Cray, Inc., No. 15-
`cv-01554, 2017 WL 2813896 (E.D. Tex. June 29, 2017), purporting to create a 4-
`part test for evaluating “regular and established place of business.” Judge Gilstrap’s
`4-part test, which includes an analysis of “sales revenue” generated in the judicial
`district, is contrary to the Federal Circuit’s In re Cordis Corp. decision.
`Commentators have already called into question the correctness of Judge Gilstrap’s
`analysis. See R. Davis, Lawmakers Slam “Reprehensible” New Gilstrap Venue
`Rules, Law360 (July 13, 2017). House Judiciary Committee Chairman Bob
`Goodlatte, R-Va, stated: “Unfortunately, one judge in [the Eastern District of Texas]
`has already re-interpreted both the law and the unanimous Supreme Court decision
`to keep as many patent cases as possible in his district in defiance of the Supreme
`Court and congressional intent.” Id. Cray petitioned the Federal Circuit on July 17
`for a writ of mandamus to transfer the case (In re: Cray Inc., Fed. Cir. No. 17-00129,
`ECF Dkt. 2-1), and Raytheon’s response is due on July 31.
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`
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`below and in the supporting Declarations filed with this Motion, none of the
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`Defendants maintain a “regular and established place of business” in New Jersey.
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`Id.
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`1. Multi Media (Case No. 14-cv-02340).
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`
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`Multi Media, LLC (“Multi Media”) is a California limited liability company
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`and maintains a regular and established place of business in Irvine, CA. See
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`Declaration of Pooya Woodcock at ¶¶ 6-7. The Declaration of Pooya Woodcock,
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`submitted in support of this motion, establishes that