By Andrew Williams --
Last Spring, the Supreme Court in TC Heartland LLC v. Kraft Foods Group Brands LLC held that the word "resides" in the patent venue statute, 28 U.S.C. § 1400(b), "refers only to the State of incorporation" of the alleged infringer. Last month, the Federal Circuit in In re Micron concluded that TC Heartland changed the controlling law and, as such, defendants that did not raise it at the appropriate time did not waive the venue defense based on Federal Rule of Civil Procedure 12(g)(2) and (h)(1)(A). However, as we reported at the time, the Court also concluded that the waiver rule found in the Federal Rules is not the only basis on which a district court might reject a venue defense. In so ruling, the Federal Circuit was clear that it was not seeking "to define the channels in which discretion must be exercised," and that "[a]ny legal conclusions about the boundaries of discretion must await particular district court explanations under the Dietz framework for how discretion is being exercised in particular settings." Dietz v. Bouldin, Inc., 136 S. Ct. 1885 (2016), had provided that a district court's inherent powers are governed by the control necessarily vested to manage the affairs of the court "to achieve the orderly and expeditious disposition of cases." The Federal Circuit, therefore, granted Micron's petition for Writ of Mandamus, but it did not order dismissal of transfer for lack of venue. Instead, it "remanded for the court to consider any such properly raised non-Rule 12(h)(1)(A) arguments that Micron has forfeited its venue defense, and if there is no such sound arguments, to consider the merits of venue under § 1400(b)."
On November 15, 2017, the same day In re Micron was decided, the Federal Circuit granted one additional petition for Writ of Mandamus, and denied two others. Further, on November 22, 2017 the Court denied two additional petitions, and denied a final petition on November 27, 2017. For some reason, however, these cases did not appear on the Federal Circuit's Opinions and Orders page until December 1, 2017. The five cases in which the petitions were denied had all been similarly postured: a defendant had filed a petition for Writ of Mandamus directing the district court to either grant a motion to transfer, to dismiss the case for improper venue, or to address arguments why venue was improper. The specifics of each case are summarized in the following table:
The Federal Circuit in these cases reiterated the holding from In re Micron that failure to present the venue objection earlier did not constitute waiver within the Federal Rule of Civil Procedure 12(g)(2) and (h)(1). However, the Court denied these petitions because they deemed "the proper course here for petitioners [was] to first move the district court for reconsideration of its order denying the motion to dismiss." The Court also provided that "[a]ny new petition for mandamus from the district court's ruling on reconsideration will be considered on its own merits." The only significant difference in any of these five cases was that in the In re Flopam Inc. case, the petitioners also moved to stay the district court proceedings pending consideration of the petition. This motion to stay was denied as moot, although the Court did note that "the Fifth Circuit has noted that matters of venue should take 'top priority in the handling of this case by the . . . District Court.'"
The only petition for writ of mandamus that was granted was in a case in which a district court had already transferred a case. On November 15, 2017, a Federal Circuit panel consisting of Judges Taranto, Chen, and Hughes granted the petition to the United States District Court for the District of Minnesota in In re Cutsforth, Inc. The petition stemmed from a case filed in May 2012, although the case had been stayed until September 2016 pending inter partes review of the asserted patents. In this case, after the Supreme Court issued its TC Heartland decision, the District Court agreed with defendants that the venue objection had not been previously available. Correspondingly, because "the law of venue exists for the convenience of defendants, not plaintiffs, and under 28 U.S.C. § 1406(a), prejudice to the plaintiff is not a relevant consideration," the Court transferred the case to the Western District of Pennsylvania. Cutsforth petitioned the Federal Circuit to vacate the transfer order "because the district court erred in its analysis of whether the venue defense was waived." The Federal Circuit pointed out that "[i]n light of In re Micron, the district court in the present case here clearly erred in not considering non-Rule 12 bases for waiver raised by Cutsforth," and as a result, Mandamus relief was "appropriate to direct the court to reconsider its decision in light of In re Micron."
It remains to be seen what the various district courts will do with these instructions from the Federal Circuit. It will be interesting to see how the lower courts handle these cases that are returned, or handle the motions for reconsideration that are certainly forthcoming. We will continue to monitor these cases, as well as others that address the fallout of the TC Heartland decision, and we will provide updates as they are warranted.