by Dennis Crouch
The U.S. Courtroom of Appeals for the Federal Circuit lately declined to subject a writ of mandamus directing the U.S. District Courtroom for the Japanese District of Texas (Decide Gilstrap) to dismiss a patent infringement lawsuit in opposition to Constitution Communications primarily based upon improper venue. In re Constitution Commc’ns, Inc., No. 2023-136 (Fed. Cir. Sept. 5, 2023). Though non-precedential, the choice highlights a key distinction between motions to dismiss for improper venue beneath 28 U.S.C. § 1406 and motions to switch venue for comfort beneath 28 U.S.C. § 1404. It additionally reveals the excessive bar for acquiring the “extraordinary treatment” of mandamus reduction from denial of an improper venue movement.
The standard rule for appeals is that events should wait till last judgment. Assuming that it loses on the deserves, Constitution could have one other alternative to attraction venue as soon as the case is concluded.
Background: Entropic sued Constitution for infringing a number of of its patents, together with US10135682. The patents cowl numerous elements of cable community administration, specializing in Cable Modem Termination Techniques (CMTS) that serve a number of cable modems. The CMTS determines numerous Sign-to-Noise Ratio (SNR) associated metrics for these modems and assigns them to completely different service teams primarily based on these metrics.
Though Constitution derives substantial income from prospects positioned within the Japanese District of Texas, it nonetheless moved to dismiss the case for improper venue beneath § 1400(b), arguing it lacked an everyday and established place of work in that district. This statute limits the places the place patent infringement lawsuits will be filed.
1400(b) Any civil motion for patent infringement could also be introduced within the judicial district the place the defendant resides, or the place the defendant has dedicated acts of infringement and has an everyday and established place of work.
Id. The Supreme Courtroom has interpreted this statute to restrict actions in opposition to firms to both (1) their state of incorporation or (2) a district the place the defendant “has an everyday and established place of work” and likewise infringes the patent by making, utilizing or promoting the invention. Constitution is a Delaware firm and doesn’t function its personal retail shops within the Japanese District. Nonetheless, the district courtroom denied the movement to dismiss, discovering venue was correct as a result of Constitution ratified retail shops operated by its subsidiaries within the district and people subsidiaries have been Constitution’s brokers.
Improper vs. Inconvenient Venue
There is a crucial distinction between improper venue beneath § 1400(b) and inconvenient venue beneath § 1404(a). Part 1400 applies when venue is “flawed” or “improper” within the chosen district. If venue is improper, the district courtroom should dismiss the case or switch it to a correct district. And, if a case goes to conclusion in an improper venue, a dropping defendant would have a possibility to attraction and no less than get a brand new trial in a correct venue.
In distinction, § 1404 permits switch “[f]or the comfort of events and witnesses” even when venue is correct. Courts have better discretion in deciding § 1404 switch motions primarily based on case-specific elements like comfort and judicial financial system. And, by the tip of a trial, it’s virtually by no means “handy” to retry the case in one other venue. Thus, post-trial part 1404 appeals are mainly automated losers.
Thus, despite the fact that “flawed venue” seems like an even bigger deal than “inconvenient venue” the Federal Circuit has traditionally solely granted quick mandamus actions for the latter. The distinction right here is that, absent mandamus, the inconvenient venue subject can’t virtually be appealed.
The occasion looking for a writ of mandamus should present (1) no different satisfactory means to achieve reduction; (2) a transparent and indeniable proper to issuance of the writ; and (3) the writ is acceptable beneath the circumstances. Cheney v. U.S. Dist. Ct. for D.C., 542 U.S. 367 (2004). Prior to now, the courtroom has steered that 1400(b) points are unlikely to result in mandamus reduction as a result of “post-judgment attraction is an satisfactory various means for attaining reduction” if venue is discovered improper on attraction. In re Monolithic Energy Sys., Inc., 50 F.4th 157 (Fed. Cir. 2022).
The Federal Circuit’s Resolution
In a brief opinion authored by Decide Cunningham, the Federal Circuit denied Constitution’s petition for mandamus, discovering no justification for quick assessment of the district courtroom’s order:
At most, CCI’s arguments current a record-specific dispute: whether or not CCI exerts management adequate to impute its subsidiaries’ in-district operations to CCI beneath Fifth Circuit legislation. . . . CCI’s petition doesn’t elevate the kind of broad, elementary, and recurring authorized query or different issues that may warrant mandamus assessment.
In re Constitution Commc’ns, Inc., (Fed. Cir. Sept. 5, 2023) (inside citations and citation marks omitted). The courtroom right here emphasised that mandamus is an “extraordinary treatment” and Constitution had not proven the district courtroom’s resolution was clearly flawed or raised a novel authorized subject requiring immediate decision. Somewhat, Constitution appeared to “current a record-specific dispute” about imputing its subsidiaries’ actions to Constitution for venue functions. The courtroom additionally defined that Constitution might nonetheless problem venue on direct attraction after last judgment, which offered an satisfactory various treatment.
The courtroom has refused to take the bait and increase mandamus reduction to improper venue challenges beneath § 1400(b). Defendants should usually wait to attraction after last judgment, even when venue could have been misguided. Be aware although that mandamus could also be nonetheless be justified for improper venue selections implicating unsettled areas of legislation or the place the occasion can present a significant ensuing injustice. However disagreements about case-specific info and evaluation are unlikely to clear the excessive mandamus bar.