Case 6:21-cv-00172-ADA Document 26 Filed 02/11/22 Page 1 of 12
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`GREATGIGZ SOLUTIONS, LLC,
` Plaintiff
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`-vs-
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`ZIPRECRUITER, INC.,
` Defendant
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`W-21-CV-00172-ADA
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`ORDER GRANTING MOTION TO DISMISS FOR IMPROPER VENUE
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`Came on for consideration this date is the Motion to Dismiss for Improper Venue (the
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`“Motion”) of Defendant ZipRecruiter, Inc. (“Defendant” or “ZipRecruiter”). Defendant filed the
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`Motion on May 7, 2021. ECF No. 8. Plaintiff GreatGigz Solutions, LLC (“Plaintiff” or
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`“GreatGigz”) filed its Opposition to Defendant’s Motion on May 21, 2021. ECF No. 11.
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`Defendant’s Reply was filed on May 28, 2021. ECF No. 12. After careful consideration of the
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`briefing and arguments, the Court GRANTS Defendant’s Motion to Dismiss for Improper
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`Venue.
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`I.
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`BACKGROUND
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`On February 25, 2021, GreatGigz filed its Complaint against ZipRecruiter alleging
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`infringement of United States Patent Nos. 6,662,194 and 7,490,086 (collectively, the “Patents”)
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`because the Defendant makes, uses, offers for sale, sells, and advertises its services through the
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`use of memory processors, transmitters and/or receivers that provide an online employment
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`service which connects employers and potential employees. ECF No. 1 ¶¶ 14, 28, 32, 48.
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`GreatGigz alleges that each of the Patents are “valid, enforceable, and were duly issued in full
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`compliance with Title 35 of the United States Code” and have a priority date “at least as early as
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`1
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`Case 6:21-cv-00172-ADA Document 26 Filed 02/11/22 Page 2 of 12
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`July 31, 1999.” ECF No. 1 ¶¶ 9, 11. On May 7, 2021, ZipRecruiter filed a Motion to Dismiss the
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`action for improper venue under Rule 12(b)(3). ECF No. 8.
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`GreatGigz is a limited liability company organized under Florida law. ECF No. 1 ¶ 1.
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`ZipRecruiter is a domestic corporation organized under Delaware law. ECF No. 1 ¶ 1; ECF No.
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`8 at 1. GreatGigz’s Complaint states that venue is “proper in the Eastern [sic] District of Texas
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`pursuant to at least 28 U.S.C. §§ 1391(c)(2) and 1400 (b)” because “Defendant maintains a
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`regular and established place of business in this District.” ECF No. 1 ¶ 7.1
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`II.
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`LEGAL STANDARD
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`Section 1400(b) of title 28 of the United States Code “constitute[s] the exclusive
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`provision controlling venue in patent infringement proceedings.” TC Heartland LLC v. Kraft
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`Foods Grp. Brands LLC, 137 S. Ct. 1514, 1518 (2017) (internal quotation marks omitted). A
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`claim for patent infringement must be brought “in the judicial district where the defendant
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`resides” or “where the defendant has committed acts of infringement and has a regular and
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`established place of business.” 28 U.S.C. § 1400(b); see also Optic153 LLC v. Thorlabs Inc.,
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`Civil Action No. 6:19-CV-00667-ADA, 2020 WL 3403076, at *2 (W.D. Tex. June 19, 2020).
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`Section 1400(b) is intentionally restrictive, and it is Plaintiff’s burden to establish proper
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`venue. In re ZTE (USA) Inc., 890 F.3d 1008, 1013–14 (Fed. Cir. 2018).
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`Under the first prong, the Supreme Court has held that “a domestic corporation ‘resides’
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`only in its State of incorporation for purposes of the patent venue statute.” TC Heartland, 137 S.
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`Ct. at 1517. Under the second prong, the Federal Circuit interpreted a “regular and established
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`place of business” to impose three general requirements: “(1) there must be a physical place in
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`the district; (2) it must be a regular and established place of business; and (3) it must be the place
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`1Plaintiff failed to allege in its Complaint that venue is proper in the Western District of Texas.
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`2
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`of the defendant.” In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017). Failure to satisfy any
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`statutory requirement requires a finding of improper venue. Id.
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`III. ANALYSIS
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`A.
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`ZipRecruiter Does Not Reside in the Western District of Texas
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`Under § 1400(b), a claim for patent infringement must be brought (1) “in the judicial
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`district where the defendant resides,” or (2) “where the defendant has committed acts of
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`infringement and has a regular and established place of business.” 28 U.S.C. § 1400(b). As
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`mentioned, ZipRecruiter resides in the District of Delaware. It is undisputed that venue would be
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`improper as to ZipRecruiter under the first prong of 28 U.S.C. § 1400(b).
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`Since ZipRecruiter does not reside in the District, venue is dependent on the Court’s
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`analysis of the second prong: “where the defendant has committed acts of infringement and has a
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`regular and established place of business.” 28 U.S.C. § 1400(b). ZipRecruiter contends that
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`venue is improper in the Western District of Texas, alleging it has no regular and established
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`place of business in this District. ECF No. 8 at 2. Conversely, GreatGigz maintains that venue in
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`the Western District of Texas is appropriate because ZipRecruiter has a regular and established
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`place of business either through the homes of its remote employees or its lease that lapsed eight
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`months before the filing of this suit. ECF No. 11 at 1.
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`B.
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`ZipRecruiter Does Not Have a Regular and Established Place of Business in
`the Western District of Texas.
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`Proper venue under the second prong of § 1400(b) requires: (1) a physical place in the
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`district; (2) that the physical place be a regular and established place of business; and (3) that the
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`physical place be the defendant’s place. Cray, 871 F.3d at 1360. A plaintiff must prove all three
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`3
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`requirements to establish proper venue under the second prong of the statute. In the case at hand,
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`GreatGigz fails to meet its burden.
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`As noted, GreatGigz bases its venue argument on the assertion that ZipRecruiter
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`maintains a regular and established place of business in the District. GreatGigz supports its
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`argument with assertions that: (1) ZipRecruiter leased an office space in Austin until June 30,
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`2020; (2) the COVID-19 pandemic required ZipRecruiter’s employees to suddenly begin
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`working from home; (3) the pandemic and ZipRecruiter’s move to remote work caused
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`ZipRecruiter to let its lease lapse; (4) the prior lease “suggests that [ZipRecruiter] do [sic] have a
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`need for employees that are physically located in the Austin area”; and (5) the remote
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`employees’ homes now serve as the “physical location” of ZipRecruiter’s supposed place of
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`business. ECF No. 11 at 1–3. Essentially, GreatGigz is requesting that this Court expand the
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`language of § 1400(b) and its accompanying test in Cray. The Court, however, remains
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`unpersuaded and refuses to develop the law as requested.
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`i.
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`The Covid-19 pandemic has not changed what is considered a “regular
`and established place of business” under § 1400(b).
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`GreatGigz bases a large part of its argument on a lease for office space held by
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`ZipRecruiter that was terminated only a few months into the COVID-19 pandemic. GreatGigz
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`maintains, and ZipRecruiter does not dispute, that “prior to the termination of their [sic] lease,
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`Defendant leased a ‘physical place’ in Austin were [sic] employees worked, which qualified as a
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`‘regular and established’ place of business.” ECF No. 11 at 2. However, GreatGigz goes on to
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`claim that because “the COVID-19 pandemic forced workers to work remotely” this “in effect
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`transferred the ‘regular and established place of business’ from [ZipRecruiter’s] previously
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`leased office space to the employees [sic] homes.” Id. (emphasis omitted). In making this claim,
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`GreatGigz strongly emphasizes that the lease lapsed only a few months into the infamous
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`COVID-19 pandemic. Although it is true that the on-going pandemic has had far-reaching
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`effects, those effects do not on their own work to spontaneously change the law as GreatGigz
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`seems to suggest.
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`Even if the Court were to consider expanding the law, GreatGigz does not sufficiently
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`support its argument. GreatGigz made no showing, beyond mere speculation, as to why
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`ZipRecruiter allowed the lease to lapse. If GreatGigz wanted the Court to prevent ZipRecruiter
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`from “escap[ing] this District’s jurisdiction,” then GreatGigz had the burden of proving that—the
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`Court will not allow GreatGigz to use the pandemic as a means of lowering its burden. ECF
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`No. 11 at 2. Accordingly, the traditional § 1400(b) analysis applies.
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`ii.
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`ZipRecruiter does not have a physical location in the Western District of
`Texas.
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`The first requirement of § 1400(b) necessitates that there be a “physical, geographical
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`location in the district from which the business of the defendant is carried out” Cray, 871 F.3d at
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`1362. The location, however, does not need to “be a ‘fixed physical presence in the sense of a
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`formal office or store’”; rather, the location can be any “building or part of a building set apart
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`for any purpose or quarters of any kind from which business is conducted.” See id. Undoubtedly,
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`a leased office space or an employee’s home can be considered a “physical place” as it applies to
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`this requirement. However, the facts at hand demonstrate that neither the prior lease nor the
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`remote employees’ homes satisfy the other two elements of the Cray test in this instance.
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`iii.
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`A prior regular and established place of business does not create a
`current regular and established place of business.
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`As mentioned above, GreatGigz relies on a lease ZipRecruiter held for about a year and a
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`half that was terminated about 8 months before the current litigation began. A fundamental and
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`unwavering rule applied by courts when determining whether venue is proper is that the
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`“relevant time for any venue analysis is the time of filing of the complaint”—events prior to or
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`after a complaint is filed are irrelevant except to the extent they logically establish a continuous
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`presence up to the date of filing. See eRoad Ltd. v. PerDiemCo LLC, No. 6:19-CV-00026-ADA,
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`2019 WL 10303654, at *6 (W.D. Tex. Sept. 19, 2019); see also Pers. Audio, LLC v. Google,
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`Inc., 280 F. Supp. 3d 922, 931 (E.D. Tex. December 1, 2017). However, TC Heartland renewed
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`many questions about patent venue law, including the question first brought to light in 1969 by
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`the Welch Court: During what time period must a company have a regular and established place
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`of business in the District for venue to be proper. Since the resurrection of the Welch case
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`through TC Heartland, two main schools of thought have arose: (1) the traditional approach that
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`looks only at the facts and circumstances at the time of filing, and (2) a reasonable and fair
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`standard that looks at whether the defendant had a regular and established place of business at
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`the time the cause of action accrued and whether the suit is filed within a reasonable time
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`thereafter. Compare Pers. Audio, 280 F. Supp. 3d, with Welch Sci. Co. v. Hum. Eng'g Inst., Inc.,
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`416 F.2d 32 (7th Cir. 1969). This Court has not had a chance to decide this issue yet.
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`In Welch, Welch sued HEI for patent infringement in the Northern District of Illinois on
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`July 21, 1967. Welch, 416 F.2d at 33. Although one of HEI’s training schools was located in the
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`district, HEI had entered negotiations to sell the building and eventually finalized that sale on
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`August 30, 1967. Id. However, there were no training activities conducted and the building was
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`not used by HEI after June 15, 1967. Id. HEI alleged that beginning on June 15, 1967, it no
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`longer had a regular and established place of business in the district because it no longer had
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`operations in the district—even if it still owned the building. See id. Thus, HEI argued, venue
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`was improper. The Seventh Circuit did not agree.
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`The Seventh Circuit held that the time of filing was not the relevant time period. Id. at 35.
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`Instead, the court held that “venue is properly lodged in the district if the defendant had a regular
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`and established place of business at the time the cause of action accrued and suit is filed within
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`a reasonable time thereafter.” Id. (emphasis added). Until June 15, 1967, when HEI ceased
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`conducting business in the district, venue would have been proper if infringement had occurred
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`and a suit was filed. Id. at 36. According to the Welch Court, “37 days later, when plaintiff
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`[actually] filed suit, venue could still be lodged in the district under section 1400(b),” despite no
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`longer conducting business operations, because this was the reasonable and fair outcome. See id.
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`at 36, 35. Based on this holding, “a defendant cannot establish a business in a particular judicial
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`district and then abandon or sell it without remaining amenable to suit for venue purposes in that
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`district for a reasonable time.” Id. at 35.
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`The Court in Personal Audio, LLC v. Google, Inc. reached a differing conclusion. Similar
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`to the defendant in Welch, Google raised the issue of improper venue with the Court, claiming
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`that it did not have a regular and established place of business in the district at the time the suit
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`was filed. Personal Audio, 280 F. Supp. 3d at 930. The lease on Google’s only property in the
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`district terminated on August 31, 2015, and suit was filed on September 15, 2015. Id. at 932.
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`Additionally, since November 8, 2013, no Google employee worked in that office, and the office
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`was closed a month later. Id. During the intervening time period, Google subleased the property
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`to another company. Id.
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`Personal Audio proposed the fair and reasonable standard used in Welch, arguing that,
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`because of the short time period between the end of the lease and filing of the suit, venue should
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`still be proper. Id. at 930. The court disagreed. Id. at 931. Narrowly construing the statute, the
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`court concluded that, because the language was written in the present tense, rather than past
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`tense, “venue is determined under § 1400(b) by the facts and situation as of the date suit is filed.”
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`Id. (emphasis added). The court ultimately held that the leased space had not been a “regular and
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`established place of business” since the end of 2013, when the office was closed. This Court
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`agrees with the Personal Audio court’s narrower, language based approach: There must be a
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`regular and established place of business at the time of filing.
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`The first step in determining the meaning of a statute is to look at the statute’s plain
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`language, giving all undefined words their ordinary meaning. See Artis v. D.C., 138 S. Ct. 594,
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`603 (2018). It is only if the language is ambiguous that you move on to the canons of
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`construction. Id. Here, the language is clear—venue is proper in a district where the defendant
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`has a regular and established place of business. Accordingly, the Court will look only to the
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`venue facts as they were at the time the complaint was filed. Here, those facts do not support that
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`ZipRecruiter’s lease, which terminated 8 months before suit was filed, constitutes a regular and
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`established place of business for venue purposes. Consequently, venue is not proper based on the
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`terminated lease.
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`iv.
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`The mere presence of employees in the District is insufficient to satisfy a
`regular and established place of business of ZipRecruiter.
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`GreatGigz also argues that ZipRecruiter’s remote employees’ homes are sufficient to
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`satisfy the regular and established business requirement. Under the facts presented, the Court
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`rejects that argument. The second and third requirements enumerated under Cray dictate that the
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`place be “a regular and established place of business” and must “be the place of the defendant.”
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`Cray, 871 F.3d at 1360.
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`When determining whether a place is “regular” and “established,” courts consider the
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`permanence of the location, whether the activity at the location is sporadic, and, if the place is an
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`employee’s home, whether the employee can move out of the district without the approval of his
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`employer. See id. at 1362–63. Here, GreatGigz presents no evidence or facts that would show
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`any one of these factors is present. In fact, GreatGigz’s argument pertaining to this requirement
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`blatantly misstate the law. In its brief to the Court, GreatGigz claims that “[a]s long as the
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`location of the home of the employees within the district is meaningful to the role of the
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`employees with the defendant . . . they qualify as ‘places of business.’” ECF No. 11 at 3. The
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`only support GreatGigz offers is an isolated statement it plucks from Cray itself. However,
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`neither Cray nor its progeny stand for this proposition. Rather, the Federal Circuit held in Cray
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`that “while a business can certainly move its location, it must for a meaningful time period be
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`stable, established.” Cray, 817 F.3d at 1363.
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`The Court finds GreatGigz’s argument that ZipRecruiter conditions employment on an
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`employee’s continued residence in the District equally unpersuasive. To rebut ZipRecruiter’s
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`statement that it does not condition employment in this manner, GreatGigz presented screenshots
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`of a Data Engineer position posted by ZipRecruiter in the Austin market that states, “All
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`employees are working remotely due to Covid-19 and we have committed to not require a return
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`to the office until September 2021 at the earliest.” ECF No. 11 at 4. Yet, this does not show nor
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`imply that ZipRecruiter conditions employment on an employee’s continued residence in the
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`District. Moreover, affidavit testimony of ZipRecruiter’s human resource director, Tim
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`Odegaarden, expressly states that ZipRecruiter does not plan to open a Texas office in September
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`2021 or at any time after the Covid-19 pandemic. ECF No. 8-1 ¶ 3. For the above reasons, the
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`second requirement is not met.
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`Under the third requirement, to determine whether the place is “of the defendant” and not
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`solely the place of the defendant’s employee, courts consider: (1) whether the defendant owns or
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`leases the place; (2) whether the defendant exercises other attributes of possession or control
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`over the place; (3) whether the defendant conditioned the employee’s employment on continued
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`residence in the district; and (4) whether the home was used to store, distribute, or sell the
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`defendant’s goods. Id. at 1363. Courts will also consider a defendant’s own representations,
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`including: (1) whether marketing and advertisements hold the homes out as a place for business;
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`(2) whether the defendant lists the home on its website or in a telephone directory; and (3)
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`whether the defendant’s name is on a sign associated with the building. See id. at 1363–64.
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`However, the “mere fact that a defendant has advertised that it has a place of business or set up
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`an office is not sufficient” on its own. Id. Rather, the defendant must “actually engage in
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`business from that location.” Id.
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`GreatGigz fails to show that the homes of the 17 employees are places of ZipRecruiter,
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`and not just places of its employees. ZipRecruiter has alleged, and GreatGigz has not sufficiently
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`rebutted, that the homes of these employees are not subject to the control of ZipRecruiter.
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`Additionally, ZipRecruiter does not own or pay for said homes. ECF No. 8 at 9. Furthermore,
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`ZipRecruiter does not sell goods, so there is no evidence to support that the homes are, or could
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`be, used for storage, or as a location from which ZipRecruiter’s goods are sold or distributed.
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`There is no evidence to support that ZipRecruiter has ratified or established these homes as a
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`place of business.
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`Although GreatGigz presents evidence that ZipRecruiter advertises its employees live in
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`Austin and that remote positions with the company are available for Austin residents, GreatGigz
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`does not establish that any of these listings claim the alleged place of business (the employees’
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`homes) is ZipRecruiter’s own place of business or that these remote-employee candidates must
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`live in the Austin area to work for ZipRecruiter. In fact, the listings state in no uncertain terms
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`that all of the jobs posted are remote positions that allow the candidate to be located anywhere
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`within the United States—there is no requirement that the remote candidates live in Austin. ECF
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`No. 11 at 2–3; ECF No. 8 at 9. ZipRecruiter simply has employees who chose to, but are not
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`required to, live in the District. ECF No. 8 at 9. The other two factors concerning a defendant’s
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`representations—listing the home on a website or in the telephone book and displaying the
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`defendant’s name on a sign on the building—are clearly not met here either as GreatGigz offers
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`no evidence in support.
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`Finally, the court may compare this District with another district where ZipRecruiter has
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`employees or conducts business. When comparing the nature and activity of ZipRecruiter’s
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`alleged place of business in the Western District of Texas with its other places of business, it is
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`apparent that ZipRecruiter does not have a regular and established place of business in the
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`District. While 17 remote employees currently live in the District, ZipRecruiter’s Linkedin
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`profile shows that it has over 1,000 other employees—notably, nearly 500 in the surrounding
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`Phoenix, Arizona area and nearly 300 in Los Angeles, California. ECF No. 8 at 8; ECF No. 8-1 ¶
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`4. ZipRecruiter has several offices, including multiple offices in California and Arizona. ECF
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`No. 8-1 ¶ 3. Comparatively, ZipRecruiter does not maintain an office in the Western District of
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`Texas. Id. ¶ 5. For these reasons, the third requirement is not met.
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`ZipRecruiter’s lapsed lease cannot be used by Plaintiff as ZipRecruiter’s “regular and
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`established place of business.” Additionally, the homes of ZipRecruiter’s remote employees do
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`not constitute a “regular and established place of business” because those places are not regular
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`nor established and those places are not “places of the defendant.” The Court agrees with
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`ZipRecruiter that, based on the time of filing, ZipRecruiter did not have a regular and established
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`place of business in this District and venue is therefore improper.
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`IV. CONCLUSION
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`For the above reasons, the Court finds that venue is improper in the Western District of
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`Texas. It is therefore ORDERED that Defendant ZipRecruiter, Inc.’s Motion to Dismiss for
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`Improper Venue is hereby GRANTED.
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`SIGNED this 11th day of February, 2022.
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`ALAN D ALBRIGHT
`UNITED STATES DISTRICT JUDGE
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