IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`
`INGENIOSHARE, LLC,
` Plaintiff
`
`-vs-
`
`EPIC GAMES, INC.,
` Defendant
`
`§
`§
`§
`§
`§
`§
`§
`§
`
`W-21-CV-00663-ADA
`
`MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT EPIC
`GAMES, INC.’S MOTION TO DISMISS FOR IMPROPER VENUE
`
`Came on for consideration Defendant Epic Games, Inc.’s (“Epic” or “Defendant”)
`
`Motion to Dismiss for Improper Venue. ECF No. 14. After venue discovery, Plaintiff
`
`IngenioShare, LLC filed its opposition. ECF No. 24. Epic then filed its reply. ECF No. 28. After
`
`careful consideration of the briefing, the Court GRANTS Defendant’s Motion to Dismiss for
`
`Improper Venue.
`
`I.
`
`BACKGROUND
`
`On June 25, 2021, IngenioShare filed the instant suit alleging Epic infringed and
`
`continues to infringe one or more claims of United States Patent Nos. 10,708,727 (the “’727
`
`Patent”), 10,492,038 (the “’038 Patent”), 10,142,810 (the “’810 Patent”), and 8,744,407 (the
`
`“’407 Patent”). ECF No. 1 ¶¶ 90, 96, 102, 107, 113, 118, 124. The Complaint asserts both direct
`
`and indirect infringement. Id.
`
`IngenioShare is a limited liability company organized under California law. ECF No. 1
`
`¶ 2. IngenioShare partners “with inventors and entrepreneurs to provide innovative market-
`
`driven ideas and user-friendly technologies.” Id. ¶ 18. “One set of its novel solutions relates to
`
`1
`
`Exhibit 3001 page 1
`
`

`

`communication technologies, applicable to multiplayer video games.” Id. Epic is a corporation
`
`organized under Maryland law and headquartered in Cary, North Carolina. Id. ¶ 3; ECF No. 14-1
`
`¶ 7. IngenioShare alleges that Epic has a place of business in Austin, Texas. ECF No. 1 ¶ 3. Epic,
`
`in response, filed this Motion to Dismiss for Improper Venue (the “Motion”). ECF No. 14.
`
`II.
`
`LEGAL STANDARD
`
`Section 1400(b) of title 28 of the United States Code “constitute[s] the exclusive
`
`provision controlling venue in patent infringement proceedings.” TC Heartland LLC v. Kraft
`
`Foods Grp. Brands LLC, 137 S. Ct. 1514, 1518 (2017) (internal quotation marks omitted). A
`
`claim for patent infringement must 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.” 28 U.S.C. § 1400(b); see also Optic153 LLC v. Thorlabs Inc.,
`
`Civil Action No. 6:19-CV-00667-ADA, 2020 WL 3403076, at *2 (W.D. Tex. June 19, 2020).
`
`Section 1400(b) is intentionally restrictive, and it is Plaintiff’s burden to establish proper
`
`venue. In re ZTE (USA) Inc., 890 F.3d 1008, 1013–14 (Fed. Cir. 2018).
`
`Under the first prong, the Supreme Court has held that “a domestic corporation ‘resides’
`
`only in its State of incorporation for purposes of the patent venue statute.” TC Heartland, 137 S.
`
`Ct. at 1517. Under the second prong, the Federal Circuit interpreted a “regular and established
`
`place of business” to impose three general requirements: “(1) there must be a physical place in
`
`the district; (2) it must be a regular and established place of business; and (3) it must be the place
`
`of the defendant.” In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017). Failure to satisfy any
`
`statutory requirement requires a finding of improper venue. Id. Furthermore, the Court must
`
`“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” if Plaintiff is unable to establish proper venue. 28 U.S.C. § 1406(a).
`
`2
`
`Exhibit 3001 page 2
`
`

`

`III. ANALYSIS
`
`A.
`
`Defendant Epic Does Not Reside in the Western District of Texas
`
`Under 28 U.S.C. § 1400(b), a claim for patent infringement must be brought (1) “in the
`
`judicial district where the defendant resides,” or (2) “where the defendant has committed acts
`
`of infringement and has a regular and established place of business.” Epic resides in Maryland.
`
`ECF No. 1 ¶ 3. ECF No. 14-1 ¶ 7. It is undisputed that venue would be improper as to Epic under
`
`the first prong of 28 U.S.C. § 1400(b). ECF No. 14 at 5; ECF No. 1 ¶ 3; ECF No. 24 at 2 (“the
`
`only issue in dispute is whether it has a regular, established place of business in this District”).
`
`Venue, therefore, hinges on the Court’s analysis of the second prong: “where the
`
`defendant has committed acts of infringement and has a regular and established place of
`
`business.” 28 U.S.C. § 1400(b). Defendant contends that venue is improper in the Western
`
`District of Texas, alleging it has no regular and established place of business in this District. ECF
`
`14 at 5. IngenioShare maintains that the Western District of Texas is the appropriate venue
`
`because Epic has committed acts of infringement and has a regular and established place of
`
`business via work-from-home employees. ECF No. 24 at 2–5. IngenioShare’s Complaint also
`
`alleges venue via authorized retailers in this District, but IngenioShare fails to further that
`
`argument in its response to Defendant’s Motion. ECF No. 1 ¶ 9.
`
`B.
`
`Defendant Epic Does Not Have a Regular and Established Place of Business in the
`Western District of Texas
`
`IngenioShare contends that venue is proper because Epic “ratified the home offices of its
`
`twenty employees working in the Western District of Texas as its regular, established places of
`
`business.” ECF No. 24 at 2. IngenioShare relies on In re Cordis for the proposition that a regular,
`
`established place of business does not require “a formal office or store.” Id. (quoting 769 F.2d
`
`733, 737 (Fed. Cir. 1985)). IngenioShare highlights that, on the date of the filing of the
`
`
`
`3
`
`Exhibit 3001 page 3
`
`

`

`Complaint, Epic had closed all offices and all employees “had to conduct their business from
`
`their home offices, which were built up at least in part using Epic’s home stipend.” Id. at 3.
`
`Plaintiff also argues that the (now) remote employees of Epic were not free to move wherever
`
`they want but were restricted to certain locations supported by Epic. Id. at 4. IngenioShare
`
`further notes that the Austin job posting was not listed as “remote,” though other locations
`
`included the specifier. Id. at 5. Last, IngenioShare contends that Epic regulates the conduct of its
`
`employees in their homes via conduct policies applicable to Zoom. This, according to Plaintiff,
`
`“goes significantly beyond the circumstances of In re Cordis, where the Federal Circuit’s finding
`
`was based on the defendant’s employees merely storing some inventory in their homes.” Id. at 5
`
`(citing In re Cordis, 769 F.2d at 737). IngenioShare, therefore, posits that “[i]f the Federal
`
`Circuit has recognized that a small business may be considered to operate from its employees’
`
`homes, it would be quite inequitable for large businesses to be shielded from a similar
`
`determination when they likewise require their employees to operate from their home offices.”
`
`Id.
`
`Plaintiff’s arguments are not new. Time and again, this Court has rejected remote
`
`employees as a basis for establishing venue under similar facts. And, while Plaintiff tries to
`
`support its argument with nuanced arguments of Zoom policies enforced at home, stipends, and
`
`location restrictions, such arguments still do not meet the demands of venue set out by the
`
`Federal Circuit. Cray may appear outdated to plaintiffs given the impact COVID-19 had on
`
`employers and forcing many to work from home. But the elements of the test have not changed.
`
`Nor can this Court stray from or expand the test in reaction to the temporary impact of COVID-
`
`19.
`
`4
`
`Exhibit 3001 page 4
`
`

`

`i. Remote employees alone do not satisfy a regular and established place of
`business of Defendant
`
`The first Cray element, “a physical place in the district,” is satisfied with an employee’s
`
`home in the District. See Cray, 871 F.3d at 1362 (“there must still be a physical, geographical
`
`location in the district from which the business of the defendant is carried out”). At the very
`
`least, twenty employees work for Epic from home in this District. Each home is a physical place
`
`in this district. Factors two and three of the Cray test are interrelated. One cannot analyze “place”
`
`without addressing whether said place is a place of the defendant. Because the Court finds that
`
`the employees’ homes are not places of Epic, the Court need not engage in a lengthy analysis of
`
`the second factor alone: whether the employees’ homes are regular and established places of
`
`business.
`
`As noted in Cray, “that the regular and established place of business must be ‘the place of
`
`the defendant,’ is crucial here.” 871 F.3d at 1364. A work-from-home employee’s residence is
`
`insufficient alone. In re Cray, 871 F.3d at 1365 (“The statute clearly requires that venue be laid
`
`where ‘the defendant has a regular and established place of business,’ not where the defendant’s
`
`employee owns a home in which he carries on some of the work that he does for the defendant.”)
`
`(quoting Am. Cyanamid Co. v. Nopco Chemical Co., 388 F.2d 818, 820 (4th Cir. 1968)); see also
`
`In re Cray, 871 F.3d at 1363 (“As the statute indicates, it must be a place of the defendant, not
`
`solely a place of the defendant’s employee.”) (emphases in original). IngenioShare argues that
`
`these remote employees had no choice but to work from their home offices and even received a
`
`home stipend sufficient to establish venue. ECF No. 24 at 2. IngenioShare relies on a pre-TC
`
`Heartland opinion, In re Cordis Corp. But Cray, post-TC Heartland, clarified when an
`
`employee’s home office constitutes a regular and established place of business of the defendant.
`
`
`
`5
`
`Exhibit 3001 page 5
`
`

`

`The Federal Circuit provided several factors, including: (1) whether a defendant owns,
`
`leases, or rents any portion of its employees’ homes, (2) whether a defendant played a part in
`
`selecting
`
`the place’s
`
`location, storing
`
`inventory or conducting demonstrations
`
`there,
`
`(3) conditioning employment or support on the maintenance of a location in the district, and (4)
`
`marketing or advertisements that indicate that the defendant itself holds out a place for its
`
`business. In re Cray, 871 F.3d at 1363, 1365.
`
`Regarding the first factor, Epic does not own, lease, or rent any portion of the homes of
`
`its twenty Austin employees. ECF No. 28 at 2. The work stipend, provided to all Epic employees
`
`to manage the adjustment was neither restrictive nor ongoing. ECF No. 28 at 3. Instead, the
`
`stipend was left open ended as a “one time discretionary after-tax payment of $5,000” with the
`
`goal of providing employees “the flexibility to help address issues as they relate to working from
`
`home.” Id.; ECF No. 28-1 at 2. As noted in the email, Epic put the onus on its employees: “You
`
`know your personal situation and what makes you most effective.” Id. It is too far a stretch to say
`
`that such a one-time payment constitutes owning, leasing, renting, or even reimbursement for its
`
`employees’ homes such that the employees’ homes are places of Defendant.
`
`Furthermore, and perhaps in line with the second factor, IngenioShare argues that Epic
`
`“regulates the conduct of its employees in their homes.” ECF No. 24 at 5. Specifically, Epic
`
`requires its employees to participate in Zoom meetings, “providing a view into their home
`
`offices where they conduct Epic’s business.” “The same conduct policies governing in-person
`
`meetings at Epic apply to participation in Zoom meetings.” Id. at 4. Per IngenioShare, these facts
`
`go beyond the circumstances in In re Cordis, where the Federal Circuit found venue “based on
`
`the defendant’s employees merely storing some inventory in their homes.” Id. at 5. Last,
`
`IngenioShare argues that it would be inequitable to find that a small business can operate from its
`
`6
`
`Exhibit 3001 page 6
`
`

`

`employees’ homes, but allow large businesses “to be shielded from a similar determination when
`
`they likewise require their employees to operate from their home offices.” The Court is
`
`unpersuaded. First, the facts at hand do not go beyond those in Cordis. In Cray, the Federal
`
`Circuit outlined the basis of its decision to deny a petition for mandamus in Cordis: “Cordis
`
`publicly advertised a secretarial service office located within the district as a place of business of
`
`its own and used its employees’ homes like distribution centers.” 871 F.3d at 1365. Here, Epic
`
`does not hold out its employees’ homes as places of Epic. Nor does having conduct regulations
`
`for Zoom equate to using employee homes as distribution centers. Second, and it bears repeating,
`
`the relevant inquiry is whether Epic controls the place, not the conduct, of its employees. Id. at
`
`1363 (“Relevant considerations include whether the defendant owns or leases the place, or
`
`exercises other attributes of possession or control over the place.”) (emphasis added). Focus on
`
`the place is directly tied to the statute and cannot be sidestepped.
`
`Third, IngenioShare argues that the locations in which Epic employees can work are
`
`restricted. But those restrictions do not erect boundaries around the Western District of Texas.
`
`See In re Cray, 871 F.3d at 1363 (“Another consideration might be whether the defendant
`
`conditioned employment on an employee’s continued residence in the district…”) (emphasis
`
`added). Austin employees work from their homes because Epic has no Austin office. And even
`
`though all Epic offices have been closed due to the pandemic, Epic never required that its Austin
`
`employees’ homes be located in this District. ECF No. 28 at 3. Those employees are free to
`
`“work remotely from or relocate to other States, including California, Massachusetts, Michigan,
`
`and New York.” ECF No. 14 at 3, 7. They can even move within Texas but outside of this
`
`District. ECF No. 24-2, 19:17-22 (“Q. Okay. Would Epic be comfortable having employees
`
`work remotely in Beaumont? A. Yes.”). Therefore, even if Epic restricts locations wherein it will
`
`
`
`7
`
`Exhibit 3001 page 7
`
`

`

`support its remote employees, those restrictions are not district specific. Because Epic’s
`
`employees in the Western District of Texas are free to move and work remotely outside of this
`
`District, this factor does not support a finding a venue.
`
`Fourth, IngenioShare points to job advertisements in this District to take advantage of the
`
`talent market in Austin, Texas. ECF No. 24 at 3. The advertised positions allegedly identified
`
`Austin, Texas as a primary location for the “Referral Specialist” job. The parties dispute whether
`
`a conflict exists between Epic’s Rule 30(b)(6) witness and the job posting. Plaintiff argues that
`
`this presents a material conflict, and that conflicts in the evidence are resolved in plaintiff’s favor
`
`on a motion to dismiss for improper venue. See Assetworks, Inc. v. City of Cincinnati, No. SA-
`
`02-CA-351-FB, 2003 U.S. Dist. LEXIS 23878, at *43 (W.D. Tex. Feb. 13, 2003) (citing
`
`McCaskey v. Continental Airlines, Inc., 133 F. Supp. 2d 514, 523 (S.D. Tex. 2001)). However,
`
`even if a conflict exists and the Court accepts Plaintiff’s version of the facts, marketing for a job
`
`position in Texas does not impute venue. “In the final analysis, the court must identify a physical
`
`place, of business, of the defendant.” In re Cray, 871 F.3d at 1363–64 (emphasis added).
`
`ii.
`
`Authorized retailers in the District are not regular and established places of
`Epic.
`
`As previously noted, IngenioShare’s Complaint claims venue is proper via authorized
`
`dealers in this District. ECF No. 1 ¶ 9. However, such sales by an authorized retailer do not
`
`establish venue unless the defendant exercises some possession or control over the shelf space,
`
`usually in the form of a lease. In re Google LLC, 949 F.3d 1338, 1343–44 (Fed. Cir. 2020). Epic
`
`does not lease any space in the stores of any retailers in the District. ECF No. 14 at 10; ECF
`
`No.14-1 ¶ 18 (“Epic Games does not lease any shelf or rack-space from retailers located in the
`
`Western District of Texas. Similarly, Epic Games does not control how Best Buy and other
`
`Western District of Texas retailers sell Epic Games’ Fortnite products. In fact, none of the 20
`
`8
`
`Exhibit 3001 page 8
`
`

`

`employees who happen to be located in the District nor any other Epic Games employees
`
`participate in business operations at these retailers.”). Thus, Epic lacks any control over physical
`
`space in the District necessary to establish venue. Additionally, IngenioShare fails to rebut any of
`
`this in its response, seemingly abandoning the argument altogether.
`
`IV.
`
`CONCLUSION
`
`For the above reasons, the court finds that venue is improper in the Western District of
`
`Texas. It is therefore ORDERED that Defendant Epic Games, Inc.’s Motion to Dismiss for
`
`Improper Venue (ECF No. 14) is hereby GRANTED. Defendant Epic Games, Inc.’s Motion to
`
`Transfer Venue is MOOT. Accordingly, Defendant Epic Games, Inc. is dismissed.
`
`SIGNED this 18th day of March, 2022.
`
`ALAN D ALBRIGHT
`UNITED STATES DISTRICT JUDGE
`
`9
`
`Exhibit 3001 page 9
`
`