Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories

Filing 265

OPINION AND ORDER: Defendant's motion to dismiss or transfer venue to the Southern District of California (Dkt #163 ) is granted. This action is transferred to the United States District Court for the Southern District of California and the Clerk of the Court is hereby directed to effect the transfer. Signed by District Judge Marco A. Hernandez on 9/5/2017. (All non-registered users served via U.S. Mail Service.) (mdc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

COLUMBIA SPORTSWEAR NORTH
AMERICA, INC., an Oregon corporation,

No. 3:15-cv-00064-HZ
OPINION & ORDER

Plaintiff,
v.
SEIRUS INNOVATIVE ACCESSORIES,
INC., a Utah corporation,
Defendant.
David W. Axelrod
Scott D. Eads
Nicholas F. Aldrich, Jr.
Schwabe, Williamson & Wyatt, P.C.
1211 SW 5th Ave., Ste. 1600
Portland, OR 97204
Attorneys for Plaintiff
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Renée E. Rothauge
Markowitz Herbold P.C.
1211 SW Fifth Ave., Suite 3000
Portland, OR 97204
Christopher S. Marchese
Seth M. Sproul
Garrett K. Sakimae
Tucker N. Terhufen
Fish & Richardson P.C.
12390 El Camino Real
San Diego, CA 92130
Matthew D. Murphey
Troutman Sanders LLP
5 Park Plaza, Suite 1400
Irvine, CA 92614
Attorneys for Defendant
HERNÁNDEZ, District Judge:
Before the Court is Defendant’s motion to dismiss or transfer venue to the Southern
District of California. Defendant argues that venue is improper in this District under the Supreme
Court’s recent decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 113 S. Ct.
1514 (2017). Because TC Heartland constitutes an intervening change in law, the motion is
granted and the Court orders that this case be transferred to the Southern District of California.
BACKGROUND
I.

Procedural Background
Plaintiff filed its Complaint in the District of Oregon on January 1, 2015. See Compl.

ECF 1. Plaintiff is an Oregon corporation with its principal place of business in Oregon.
Defendant is a Utah corporation with its principal place of business in San Diego, California. On
February 27, 2015, Defendant filed its first motion to dismiss or transfer venue. See First Mot. to
Dismiss, ECF 15. Specifically, Defendant moved under Rule 12(b)(3) to dismiss for lack of
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personal jurisdiction. Defendant asserted that venue was improper because Oregon did not have
personal jurisdiction over it, therefore Defendant did not “reside” in Oregon under 28 U.S.C.
§ 1391(c). Def.’s Mem. Supp. First Mot. to Dismiss 10–16, ECF 16. Additionally, Defendant
argued that the convenience factors provided in 28 U.S.C. § 1404(a) favored transfer to the
Southern District of California. The Court denied the motion, holding that it had “personal
jurisdiction over Seirus because it intentionally targeted the forum by selling allegedly infringing
products directly to Oregon retailers.” Op. & Order 2, June 29, 2015, ECF 33. The Court also
found that the parties split the multi-factor analysis under § 1404(a) and it deferred to Plaintiff’s
choice of venue. Id.
To date, the parties have litigated this case up to trial. The Court engaged in claim
construction and held a Markman hearing. The Court also granted the parties’ joint motion for
judgment declaring Plaintiff’s Design Patent valid. Before the close of discovery, the Court
granted Plaintiff’s motion for partial summary judgment that Defendant infringed its Design
Patent. Additionally, the Court ruled on separate fully briefed cross-motions for partial summary
judgment regarding Plaintiff’s Utility Patents and other issues remaining in this case. See Op. &
Order, Apr. 12, 2017, ECF 159. Defendant filed its second motion to dismiss or transfer venue
on June 14, 2017. A ten-day jury trial is set to begin on September 19, 2017, and the Court has
received voluminous pre-trial filings.
II.

Legal Background
Defendant’s motion arises from the Supreme Court and Federal Circuit’s differing

interpretations of the relationship between two venue statutes. Venue in general is governed by
28 U.S.C. § 1391(c). Venue in patent cases is governed by 28 U.S.C. § 1400(b), which provides:
“Any civil action for patent infringement may be brought in the judicial district where the

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defendant resides, or where the defendant has committed acts of infringement and has a regular
and established place of business.” In 1957, the Supreme Court analyzed the relationship
between the two provisions in Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222
(1957). When Fourco was decided, § 1391(c) had been amended to read: “A corporation may be
sued in any judicial district in which it is incorporated or licensed to do business or is doing
business, and such judicial district shall be regarded as the residence of such corporation for
venue purposes.” Id. at 223. The Supreme Court considered whether the general venue provision
should be read into § 1400(b), expanding the definition of where a domestic corporation
“resides” for venue purposes. Section 1400(b) provided that a corporation “resides” only in the
state in which it is incorporated; § 1391(c), by contrast, used the definition of corporate residence
to mean that a defendant could be sued where it was doing business, or in other words, where the
court had personal jurisdiction over it.
In Fourco, the Supreme Court looked to its prior decision in Stonite Prods. Co. v. Melvin
Lloyd Co., 315 U.S. 561 (1942), which presented a legally indistinguishable question about
whether the general venue statute applied to patent infringement litigation. In Stonite, the Court
found that the precursor to § 1400(b) was the “exclusive provision controlling venue in patent
infringement proceedings.” Id. at 561. The Stonite Court explained that Congress did not intend
§ 1400(b)’s predecessor “to dovetail with the general provisions relating to venue of civil suits,
but rather that it alone should control venue in patent infringement cases.” Id. at 555–56. Relying
on Stonite, the Court in Fourco held that Ҥ 1400(b) is the sole and exclusive provision
controlling venue in patent infringement actions, and it is not to be supplemented by the
provisions of 28 U.S.C. § 1391(c).” 353 U.S. at 229. The Supreme Court found that the Reviser’s
Note did not clearly express any substantive change to § 1400(b), therefore none would be

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presumed and § 1391(c)’s amendment to purportedly apply to “all cases” did not include patent
cases. Id. at 227–28.
Section 1400(b) has not been amended since Fourco was decided; but in 1988, Congress
amended § 1391(c). The 1988 amendment changed § 1391(c) to read as follows: “For purposes
of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any
judicial district in which it is subject to personal jurisdiction at the time the action is
commenced.” Judicial Improvements and Access to Justice Act, Pub. L. No. 100–702, tit. X,
§ 1013(a), 102 Stat. 4642, 4669 (1988). In VE Holding Corp. v. Johnson Gas Appliance Co., the
Federal Circuit considered whether the 1988 amendment to § 1391(c) applied to § 1400(b). 917
F.2d 1574 (1990). The Federal Circuit found that by including the phrase “under this chapter,”
Congress intended § 1391(c)’s amendment to apply to all of chapter 87 of title 28, which
included § 1400(b). Id. at 1575 (“We hold that Congress by its 1988 amendment of 28 U.S.C.
§ 1391(c) meant what it said; the meaning of the term ‘resides’ in § 1400(b) has changed.”).
The Federal Circuit squared its decision with Fourco and Stonite by reasoning that the
version of § 1391(c) as it was in Fourco no longer existed and that Congress could have
excepted § 1400(b) from the 1988 amendment but chose not to. The Federal Circuit explained
that the plain meaning of the statute and the Supreme Court’s willingness to read another
provision into § 1400(b) in a different case indicated that Congress meant § 1391(c) and
§ 1400(b) to be read together. Id. at 1579–80. For the next twenty-seven years, venue in patent
cases incorporated § 1391(c) into § 1400(b).
On May 22, 2017, the Supreme Court decided TC Heartland, reaffirming Fourco’s
central holding that: “[T]he amendments to § 1391 did not modify the meaning of § 1400(b) as
interpreted by Fourco. . . . [A] domestic corporation ‘resides’ only in the State of incorporation

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for purposes of the patent venue statute.” 137 S. Ct. at 1517. In 2011, Congress amended
§ 1391(c) to read: “That ‘[f]or all venue purposes,’ a corporation ‘shall be deemed to reside, if a
defendant, in any judicial district in which such defendant is subject to the court’s personal
jurisdiction with respect to the civil action in question.” Id. (quoting 28 U.S.C. §§ 1391(a), (c)).
The Court found that “the current version of § 1391 does not contain any indication that
Congress intended to alter the meaning of § 1400(b) as interpreted by Fourco.” Id. at 1520. The
Court concluded as follows:
Finally, there is no indication that Congress in 2011 ratified the
Federal Circuit’s decision in VE Holding. If anything, the 2011
amendments undermine that decision’s rationale. As petitioner
points out, VE Holding relied heavily—indeed, almost
exclusively—on Congress’ decision in 1988 to replace “for venue
purposes” with “[f]or purposes of venue under this chapter ”
(emphasis added) in § 1391(c). Congress deleted “under this
chapter” in 2011 and worded the current version of § 1391(c)
almost identically to the original version of the statute. Compare
§ 1391(c) (2012 ed.) (“[f]or all venue purposes”) with § 1391(c)
(1952 ed.) (“for venue purposes”). In short, nothing in the text
suggests congressional approval of VE Holding.
Id. at 1521. In sum, TC Heartland reaffirmed that for venue purposes in patent cases, a domestic
corporation “resides” only in its state of incorporation.
STANDARDS
Pursuant to Rule 12(b)(3), a party may move to dismiss an action for improper venue. If
venue is improper, the district court shall dismiss the case “or if it be in the interest of justice,
transfer such case to any district or division in which it could have been brought.” 28 U.S.C.
§ 1406(a). The plaintiff bears the burden of showing that venue is proper. Piedmont Label Co. v.
Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). Venue is a waivable defense. Leroy
v. Great W. United Corp., 443 U.S. 173, 180 (1979). A defendant raising a venue defense must
do so either as part of its responsive pleading or in a motion brought under Rule 12. Fed. R. Civ.
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P. 12(b), (h)(1). Rule 12(g)(2) provides that a party that makes a motion under Rule 12 “must not
make another motion under this rule raising a defense or objection that was available to the party
but omitted from its earlier motion.” The statute governing venue also provides that “[n]othing in
this chapter shall impair the jurisdiction of a district court of any matter involving a party who
does not interpose timely and sufficient objection to the venue.” 28 U.S.C. § 1406(b).
DISCUSSION
Defendant asserts that under TC Heartland, venue in the District of Oregon is improper
because Defendant does not “reside” in Oregon under § 1400(b). The parties do not appear to
dispute that venue is improper under § 1400(b) as interpreted by TC Heartland. Plaintiff,
however, responds that Defendant waived this objection to venue because it did not make this
argument in its first Rule 12 motion to dismiss or transfer venue. Plaintiff also argues that
Defendant waived any objection to venue it had through its litigation conduct. Defendant’s
position is that it sufficiently raised a venue defense in its first motion and that its litigation
conduct does not constitute waiver. In any event, even if the venue objection was waived,
Defendant argues that TC Heartland is intervening law which excuses any waiver. Plaintiff’s
position is that TC Heartland merely reaffirmed that Fourco was always good law and it
therefore does not excuse Defendant’s waiver.
I.

Waiver of Venue Objection
As noted above, Plaintiff argues that Defendant waived its objection to venue: (1) by

failing to raise the objection in its earlier Rule 12 motion; and (2) through its litigation conduct.
A.

Failure to Raise the Venue Objection
Plaintiff claims that Defendant’s motion to transfer violates Rule 12(g)(2) because

Defendant failed to preserve an objection to venue based on Fourco in its first motion to dismiss.

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Rule 12(g)(2) states: “Except as provided in Rule 12(h)(2) or (3), a party that makes a motion
under this rule must not make another motion under this rule raising a defense or objection that
was available to the party but omitted from its earlier motion.” Fed. R. Civ. P. 12(g)(2)
(emphasis added). Defendant did assert improper venue as a defense in its first motion to dismiss
or transfer on the ground that the Court lacked personal jurisdiction over it. The parties dispute
whether that improper venue defense was sufficient to preserve an objection to venue based on
§ 1400(b) as interpreted by Fourco.
In its first motion to dismiss, Defendant argued that it did not “reside” in Oregon for
venue purposes under § 1400(b) because the Court did not have personal jurisdiction over it.
Def.’s Mem. Supp. First Mot. to Dismiss 10.
The first venue basis under Section 1400(b) is satisfied only if
Seirus is deemed to “reside” (i.e., is subject to personal
jurisdiction) in the District of Oregon. See VE Holding Corp. v.
Johnson Gas Appliance Co., 917 F.2d 1574, 1583 (Fed. Cir. 1990).
Here, for at least the reasons stated above, this Court has no
personal jurisdiction over Seirus, and Seirus cannot be said to
reside in this District.
Id. at 11. Defendant cited to VE Holding as the basis for venue under § 1400(b) and it cited to
§ 1391(c) to determine where a corporation “resides” for venue purposes. Id. (“Section 1391(c)
provides that, for venue purposes, a corporation shall be deemed to ‘reside’ in a judicial district if
it is subject to personal jurisdiction there.”).
Other district courts have considered similar cases and concluded that the defendants
waived an objection to venue based on § 1400(b) as interpreted by Fourco despite having raised
venue defenses in their answers or first Rule 12 motions. For example, in Elbit Systems a district
court found that where the defendant based its venue objection “solely on the argument that this
district did not have personal jurisdiction over [the defendant]”, it failed to affirmatively seek

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dismissal or transfer based on the lack of “residence” under § 1400(b) as interpreted by Fourco.
Elbit Sys. Land & C4I Ltd. v. Hughes Network Sys., LLC, No. 2:15-CV-00037-RWS-RSP, 2017
WL 2651618, at *21 (E.D. Tex. June 20, 2017).
By filing motions to dismiss for improper venue and omitting its
objection to venue under § 1400(b)—as that provision was
interpreted by Fourco—[the defendant] waived its objection under
Rule 12(g)(2) and 12(h)(1)(A). [The defendant] raised the defense
of improper venue, but Rule 12(g)(2)’s consolidation requirement,
and hence Rule 12(h)(1)(A) waiver, is not limited to a “defense.”
The Rule requires a party to include “a defense or objection that
was available to the party.” Fed. R. Civ. P. 12(g)(2) (emphasis
added); see also Albany Ins. Co., 5 F.3d at 909-10 (applying
waiver to an available venue objection omitted from a prior motion
to dismiss for improper venue). If a party can preserve any
objection to venue by simply raising a venue defense—regardless
of the objection underlying that defense—then the word
“objection” in Rule 12(g)(2) would be superfluous. “[C]ourts
‘must give effect, if possible, to every clause and word of a
statute.’ ” See Loughrin v. United States, 134 S. Ct. 2384, 2390
(2014) (citation omitted). [The defendant’s] venue objection is
therefore waived.
Id. The Court agrees with the Elbit Systems court that raising the issue of venue as a defense in
general is not sufficient to preserve every objection to venue. Rule 12(g)(2) states that a party
waives a “defense or objection” by failing to raise it. As recognized in Elbit Systems, the word
“objection” in the rule would be meaningless if a party could preserve all objections to venue by
raising any venue defense.
Similarly, other district courts have found that generally raising venue in an answer and
arguing to transfer venue based on convenience factors under 28 U.S.C. § 1404(a) were
insufficient to preserve an objection to venue based on § 1400(b). See Amax, Inc. v. ACCO
Brands Corp, No. 16-10695-NMG, 2017 WL 2818986, at *2, (D. Mass. June 29, 2017) (holding
that generally stating that venue was improper in an answer and arguing for transfer of venue
based on convenience factors under § 1404(a) failed to preserve an objection that venue was
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proper under § 1400(b)); Cobalt Boats, LLC v. Sea Ray Boats, Inc., No. 2:15cv21, 2017 WL
2556679, at *4 (E.D. Va. June 7, 2017) (finding that one defendant had failed to sufficiently
object to venue by raising a venue defense in its answer and by failing to cite Fourco to
challenge venue).
In sum, the Court finds that Defendant waived its venue objection made in its second
motion to dismiss because Defendant failed to raise an objection to venue based on § 1400(b) as
interpreted by Fourco in its first Rule 12 motion.
B.

Waiver Through Litigation Conduct
The parties also dispute whether Defendant’s litigation conduct waived any objection it

had to venue. Even if a defendant initially files an objection to venue, subsequent conduct may
nevertheless waive the defense. See Peterson v. Highland Music, Inc., 140 F.3d 1313, 1318 (9th
Cir. 1998) (stating that the defense of improper venue “may be waived as a result of the course
of conduct pursued by a party during litigation”); United States v. Ziegler Bolt & Parts Co., 111
F.3d 878, 882 (Fed. Cir. 1997) (“A defendant may waive such affirmative defenses by actively
litigating the suit, even where the defenses are properly included in the defendant’s answer.”). A
party may waive improper venue based on conduct, for example, by previously filing a motion
for summary judgment. Misch on Behalf of Estate of Misch v. Zee Enters., Inc., 879 F.2d 628,
631–32 (9th Cir. 1989).
Other district courts have found that litigation conduct constituted waiver in cases
involving less activity than this case. For example, a district court in California found that the a
year of litigation including the following conduct constituted waiver: “serving invalidity
contentions, filing two motions to stay, filing a motion for judgment on the pleadings, and
participating in claim construction[.]” Infogation Corp. v. HTC Corp., No. 16-CV-01902-H-JLB,

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2017 WL 2869717, at *3 (S.D. Cal. July 5, 2017). The Infogation court found even more
persuasive the defendant’s filing for judgment on the pleadings seeking to invalidate the patent at
issue in that case. Id. Likewise, in Realtime Data LLC, a district court in Texas found that the
defendant had waived its venue objection when it “filed numerous discovery motions, challenged
[the plaintiff’s] patent claims based on alleged indefiniteness in their Markman briefing, and
otherwise submitted to venue in this district.” Realtime Data LLC v. Netapp, Inc., No. 6:16-CV00961-RWS, 2017 WL 3588047, at *1 (E.D. Tex. Aug. 21, 2017); see also Navico, Inc. v.
Garmin Int’l, Inc., No. 2:16-CV-190, 2017 WL 2957882, at *2 (E.D. Tex. July 11, 2017)
(finding that defendant had waived its venue objection by admitting that venue was proper in its
answer and by continuing to litigate the case through claim construction and “substantial motion
practice without objecting to venue”); Koninklijke Philips N.V. v. ASUSTek Comput. Inc., No.
CV 15-1125-GMS, 2017 WL 3055517, at *3 (D. Del. July 19, 2017) (finding that in addition to
withdrawing its venue objection after the Federal Circuit’s ruling in TC Heartland, the following
conduct established waiver: “(1) participat[ing] in a scheduling conference; (2) conduct[ing]
discovery; (3) enter[ing] a stipulation and protection order with the plaintiff; and (4) mov[ing]
the court to allow their out of state counsel to appear pro hac vice”).
In this case, Defendant has engaged in substantially more litigation conduct than the
defendants in the cases identified above. Over the course of more than two years of litigation,
Defendant has: completed discovery; filed multiple motions to stay; filed and fully briefed
multiple motions for partial summary judgment challenging the validity of Plaintiff’s patents;
engaged in claim construction; filed other motions seeking the Court’s judgment on issues
affecting trial; and submitted pre-trial filings including motions in limine. Furthermore, trial is
set to begin this month. The Court is persuaded by Defendant’s vigorous litigation of this case—

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including actively pursuing dispositive and other substantive motions—that Defendant has
waived its defense to improper venue.
II.

Intervening Law Exception to Waiver
Defendant argues that any waiver of its venue objection is excusable because TC

Heartland constitutes an intervening change in law. One “exception to the general rule of
waiver” is “when there has been an intervening change in the law recognizing an issue that was
not previously available.” Holland v. Big River Minerals Corp., 181 F.3d 597, 605 (4th Cir.
1999) (citing Curtis Publ’g Co. v. Butts, 388 U.S. 130, 142–45 (1967)). This exception applies
when “there was strong precedent prior to the change, such that the failure to raise the issue was
not unreasonable and the opposing party was not prejudiced by the failure to raise the issue
sooner.” Id. at 605–06 (internal quotation marks and citations omitted). “[A] party cannot be
deemed to have waived objections or defenses which were not known to be available at the time
they could first have been made, especially when it does raise the objections as soon as their
cognizability is made apparent.” Holzsager v. Valley Hosp., 646 F.2d 792, 796 (2d Cir. 1981).
District courts have split on this issue. The majority of cases have found that TC
Heartland does not constitute intervening law excusing waiver. Many of those cases cite to
Cobalt Boats, a decision from the Eastern District of Virginia, which reasoned that “the conflict
between Fourco and VE Holding was a defense that was available to Defendants just as easily as
it was to the defendant in TC Heartland, who initially raised the argument before Plaintiff filed
this case.” Cobalt Boats, 2017 WL 2556679, at *3. The Cobalt court explained that “[t]he
Supreme Court has never overruled Fourco, and the Federal Circuit cannot overrule binding
Supreme Court precedent. . . . Based on the Supreme Court’s holding in TC Heartland, Fourco
has continued to be binding law since it was decided in 1957, and thus, it has been available to

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every defendant since 1957.” Id. Similarly, in Elbit Systems a district court in the Eastern District
of Texas explained,
The court need not reach Defendants’ argument that a change in
law constitutes an exception to waiver under Rule 12(h)(1)(A)
because the Supreme Court’s decision in TC Hearltand does not
qualify. Fourco was decided in 1957. While the Federal Circuit’s
decision in VE Holding was inconsistent with Fourco, the Federal
Circuit cannot overturn Supreme Court precedent.
2017 WL 2651618, at *20. The Elbit Systems court also wrote that “[w]hile such a motion might
have been viewed as meritless in a lower court, that does not change the harsh reality that [the
defendant] would have ultimately succeeded in convincing the Supreme Court to reaffirm
Fourco, just as the petition in TC Heartland did.” Id. (citing Cobalt Boats, 2017 WL 2556679, at
*3). Indeed, another court in this District has already adopted the reasoning of Cobalt Boats and
Elbit Systems. See Reebok Int’l Ltd. v. TRB Acquisitions LLC, No. 3:16-cv-1618-SI, 2017 WL
3016034, at *3 (D. Or. July 14, 2017) (Simon, J.) (citing both cases to conclude that TC
Heartland was not intervening law excusing waiver). In Reebok, the court also found that the
“defense of improper venue was not impossible or otherwise unavailable to” the defendants
because the defendant in TC Heartland asserted the defense and prevailed before the Supreme
Court. Id.
Several other district courts have reached similar conclusions. See iLife Techs., Inc. v.
Nintendo of Am., Inc., No. 3:13-cv-04987, 2017 WL 2778006, at *7 (N.D. Tex. June 27, 2017)
(“TC Heartland does not qualify as an intervening change in law.”); Tinnus Enters., LLC v.
Telebrands Corp., No. 6:15-CV-00551-RC, 2017 WL 3404795, at *2 (E.D. Tex. Aug. 8, 2017)
(adopting with the majority view that TC Heartland merely affirmed the viability of Fourco and
did not establish intervening law); Navico, 2017 WL 2957882, at *2 (same); Koninklijke, 2017
WL 3055517, at *4 (same); Orthosie Sys. LLC v. Actsoft, Inc., No. 4:16-CV-00873, 2017 WL
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3145913, at *2 (E.D. Tex. July 25, 2017) (same); Diem LLC v. BigCommerce, Inc., No. 6:17CV-00186, 2017 WL 3187473, at *1 (E.D. Tex. July 26, 2017) (same); Realtime Data LLC, v.
Carbonite, Inc. et al., No. 6:17-CV-121 RWS-JDL, 2017 WL 3588048, at *2 (E.D. Tex. Aug.
21, 2017) (same); Mantissa Corp. v. Ondot Sys., Inc., No. 4:15-CV-1133, 2017 WL 3175645, at
*3–4 (S.D. Tex. July 26, 2017) (same); Infogation, 2017 WL 2869717, at *4 (same); mcRO, Inc.
v. Valve Corp, No. 8:13-cv-01874-GW, slip op. at 5 (C.D. Cal. July 24, 2017) (same); Fox
Factory, Inc. v. SRAM, LLC, No. 3:16-cv-00506-WHO, slip op. at 6–7 (N.D. Cal. July 18, 2017)
(same); Chamberlain Grp., Inc. v. Techtronic Indus. Co. et al., No. 16 C 6097, 2017 WL
3205772, at *2 (N.D. Ill. June 28, 2017) (same); Skyhawke Techs., LLC v. DECA Int’l Corp., No.
3:10CV708TSL-RHW, 2017 WL 3132066, at *2 (S.D. Miss. July 21, 2017) (same); President &
Fellows of Harvard Coll. v. Micron Tech., Inc., No. CV 16-11249-WGY, 2017 WL 3749419, at
*4 (D. Mass. Aug. 30, 2017); Amax, 2017 WL 2818986, at *2 (same).
There are, however, a growing minority of cases that disagree with Cobalt Boats and
have held that TC Heartland establishes intervening law excusing waiver. For example, in
Westech, a decision from the Western District of Washington, the court explained,
TC Heartland changed the venue landscape. For the first time in 27
years, a defendant may argue credibly that venue is improper in a
judicial district where it is subject to a court's personal jurisdiction
but where it is not incorporated and has no regular and established
place of business. Defendants could not have reasonably
anticipated this sea change, and so did not waive the defense of
improper venue by omitting it from their initial pleading and
motions.
Westech Aerosol Corp. v. 3M Co., No. C17-5067-RBL, 2017 WL 2671297, at *2 (W.D.
Wash. June 21, 2017). Similarly, in OptoLum, a court in the District of Arizona agreed that “TC
Heartland affected a ‘sea change’ in the law of venue for patent cases.” OptoLum, Inc. v. Cree,
Inc., No. CV-16-03828-PHX-DLR, 2017 WL 3130642, at *2 (D. Ariz. July 24, 2017) (citing
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Westech, 2017 WL 2671297, at *2). In response to the argument that the defense of improper
venue had always been available and that a litigant would have ultimately succeeded in
convincing the Supreme Court to reaffirm Fourco, the court in OptoLum stated:
But this would have taken some convincing, and until TC
Heartland, no defendant succeeded in doing so in the 27 years
following VE Holding. To suggest that the defense of improper
venue has always been available, and that TC Heartland did not
effect a change in the law “because it merely affirms the viability
of Fourco[,]” Cobalt Boats, 2017 WL 2556679, at *3, ignores the
significant impact of VE Holding and the patent bar’s reliance on
the case for nearly three decades.
OptoLum, 2017 WL 3130642, at *4. The OptoLum court found that the defendant should not
suffer the “harsh reality” that it would have succeeded in challenging VE Holding by engaging in
a “potentially lengthy and expensive litigation strategy, with the mere possibility that VE
Holding might be overturned[.]” Id. The court found that such circumstances did not “render[]
the defense of improper venue ‘available’ to [the defendant] when it filed its answer and initial
motion to dismiss.” Id. The court concluded:
[T]he Court finds that it was not, “for all practical purposes,”
possible for [the defendant] to assert the defense of improper venue
in light of the binding nature of VE Holding and its presence on the
venue landscape for the past few decades. The Court so finds even
though certain patent defendants in other cases chose to raise the
defense in light of the ongoing litigation in TC Heartland. As
explained above, the Court either would have denied a motion to
dismiss by [the defendant] as unfounded based on VE Holding or
stayed its ruling pending a decision in TC Heartland. [The
plaintiff] asserts no unfair prejudice from [the defendant] now
raising the venue defense after TC Heartland was decided.
Id. at *5 (internal citation omitted).
Other district courts have relied on Westech and OptoLum to reach the same conclusion.
For example, a court in the Eastern District of Tennessee wrote:

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For 27 years, the Federal Circuit’s interpretation of venue in patent
cases has been prevailing and applied by this and countless other
courts. TC Heartland concluded that VE Holding’s application of
§ 1391(c) to § 1400(b) was incorrect. The Supreme Court itself
described the 1988 and later 2011 amendments to the general
venue statute as changes to the venue “landscape” and “new
developments.” Thus, this Court finds it difficult to describe TC
Heartland as anything other than a significant change in the law on
venue. To do otherwise would ignore the long-standing
significance of the VE Holding decision and the reliance upon it
for many years.
Maxchief Inv. Ltd. v. Plastic Dev. Grp., LLC, No. 3:16-cv-63, 2017 WL 3479504, at *4 (E.D.
Tenn. Aug. 14, 2017). Similarly, a District of Minnesota court found that “to hold that Fourco
remained good law at all times over the last twenty-seven years, and thus that [the defendant]
should have raised the improper venue defense at the time this case was filed, effectively ignores
reality.” Valspar Corp. v. PPG Indus., Inc., No. 16-CV-1429 (SRN/SER), 2017 WL 3382063, at
*4 (D. Minn. Aug. 4, 2017). The Valspar court found that it was “illogical and unfair to argue
that [the defendant] erred by not making an argument that both this Court and the parties knew
would have been rejected—just as it had consistently been rejected around the country for a
quarter of a century.” Id. (citing OptoLum, 2017 WL 3130642, at *3); see also Ironburg
Inventions Ltd. v. Valve Corp., No. 1:15-CV-4219-TWT, 2017 WL 3307657, at *3 (N.D. Ga.
Aug. 3, 2017); (finding that TC Heartland is an intervening change in the law); CG Tech. Dev.,
LLC v. FanDuel, Inc., No. 2:16-cv-00801-RCJ-CVF, 2017 WL 3207233, at *2 (D. Nev. July 27,
2017) (finding that the majority view that TC Heartland was not intervening law was “an unfair
characterization of the effect of TC heartland on the state of the law”); Smart Wearable Tech.
Inc. v. Fitbit, Inc., No. 3:16CV00077, slip op. at 8–9 (W.D. Va. Aug. 29, 2017) (same); Simpson
Performance Prods., Inc. v. NecksGen, Inc., No. 5:16-CV-00153-RLV-DCK, 2017 WL

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3616764, at *6–7 (W.D.N.C. Aug. 23, 2017) (same); Cutsforth, Inc. v. LEMM Liquidating Co.,
No. 12-cv-1200 (SRN/LIB), 2017 WL 3381816, at *4 (D. Minn. Aug. 4, 2017) (same).
The Court is persuaded by Westech, OptoLum, and Maxchief, and finds that TC
Heartland constitutes an intervening change in law excusing waiver of Defendant’s venue
objection. VE Holding and cases following it rendered a venue objection based on § 1400(b) as
interpreted by Fourco unavailable to Defendant. “It would be inequitable to expect [the
defendants] to have objected to venue, especially where the Supreme Court had already denied
certiorari on the exact same question in VE Holding itself.” CG Tech., 2017 WL 3207233, at *1
(citing Johnson Gas Appliance Co. v. VE Holding Corp., 499 U.S. 922 (1991) (denying
certiorari)). Defendant could not have reasonably been expected to make an argument contrary to
twenty-seven years of binding precedent, and to ultimately convince the Supreme Court where it
had already denied certiorari on the same issue. Holzsager, 646 F.2d at 796 (“The clairvoyance
demanded by plaintiff here of the [defendant] is inconsistent with the doctrine of waiver.”).
Indeed, the Court treated VE Holding as binding precedent when it denied Defendant’s first
motion to dismiss or transfer venue on the ground that the Court had personal jurisdiction over
Defendant. See Op. & Order 2, June 29, 2015.
Cobalt and other decisions like it found that the Federal Circuit in VE Holding lacked the
authority to overrule Fourco and therefore TC Heartland does not qualify as intervening law
because it merely reaffirmed Fourco. This Court disagrees with that characterization and is more
persuaded by OptoLum’s description of VE Holding:
In short, VE Holding did not purport to “overrule” Fourco, but
instead determined whether Congress intended to do so when it
amended § 1391(c). As the Supreme Court explained in TC
Heartland, the Federal Circuit concluded in VE Holding that
“subsequent statutory amendments had effectively amended
§ 1400(b) as construed in Fourco, with the result that § 1391(c)
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now supplies the definition of ‘resides’ in § 1400(b).” 137 S. Ct. at
1517. The Supreme Court made clear that “the only question [it]
must answer is whether Congress changed the meaning of
§ 1400(b) when it amended § 1391”—the same issue VE Holding
addressed 27 years earlier. Id. at 1520. The Supreme Court
disagreed with VE Holding in this regard, but it did not do so on
the ground that VE Holding had improperly “overruled” Fourco.
2017 WL 3130642, at *3. The OptoLum court also noted that Congress recognized that VE
Holding was the law of the land, and “[i]n 2015, the House of Representatives stated that
Congress ‘must correct’ the ‘infamous decision in VE Holding’ and ‘restore § 1400 to its role of
protecting patent owners and accused infringers from the burden of being forced to litigate in
remote locations.” Id. at *4 (citing H.R. Rep. No. 114-235, at 34 (2015)).
Moreover, this case is factually distinguishable from Reebok, the other case from this
District which found that the venue waiver argument was available to the defendant. In Reebok,
the court noted that there had been a “fair amount of briefing at the Supreme Court in TC
Heartland before [the defendants] filed their answer to the First Amended Complaint.” 2017 WL
3016034, at *4 n.1. Briefing and oral argument occurred between January and March of 2017. Id.
Here, by contrast, Defendant’s first motion to dismiss and answer were filed in February and
July of 2015 respectively, well before certiorari was granted in TC Heartland in December of
2016. 137 S. Ct. 614 (2016) (grating certiorari). The venue objection was “for all practical
purposes impossible” for Defendant to interpose because “its legal basis did not exist at the time
of the answer or pre-answer motion[.]” Gilmore v. Palestinian Interim Self-Gov’t Auth., 8 F.
Supp. 3d 9, 13 (D.D.C. 2014), aff’d, 843 F.3d 958 (D.C. Cir. 2016).
In sum, VE Holding represented a “sea change” in patent venue law and established that
the test for venue was whether the defendant was subject to personal jurisdiction in the district of
suit. 917 F.2d at 1584. TC Heartland expressly overruled VE Holding and held that “a domestic

OPINION & ORDER - 18

corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.”
137 S. Ct. at 1517. VE Holding and twenty-seven years of cases following it established strong
precedent that the Supreme Court reversed in TC Heartland. It would have been unreasonable to
expect Defendant to argue that venue was proper only in the state of its incorporation prior to TC
Heartland for the reasons discussed above. Accordingly, the Court concludes that TC Heartland
is an intervening change in the law excusing Defendant’s waiver of its venue objection.
III.

Remedy
As noted above, Plaintiff does not contest that under § 1400(b), venue is improper in the

District of Oregon. When venue is improper, “[t]he district court . . . 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.” 28 U.S.C. § 1406(a). The Court previously found in its ruling on Defendant’s first
motion to dismiss or transfer that “this action could have been brought in Seirus’s proposed
alternative forum, the Southern District of California, because Seirus has its principal place of
business there and is subject to the court’s general personal jurisdiction.” Op & Order 10, June
29, 2015. While Defendant no longer “resides” in the Southern District of California for patent
venue purposes because it is not incorporated there, § 1400(b) provides that venue is also proper
where the defendant “has committed acts of infringement and has a regular and established place
of business.” 28 U.S.C. § 1400(b). Because Defendant has a regular and established place of
business in the Southern District of California and because nearly all of the underlying facts
related to Defendant’s alleged infringement occurred there, the Court finds that it remains an
appropriate alternative venue. See Edwards Decl. ¶¶ 4–6, 16, ECF 28; Carey Decl. ¶¶ 2–6, ECF
16-14.

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The Court recognizes that transfer at this late stage in the case is prejudicial to Plaintiff.
This case is more developed than others which have transferred venue in light of TC Heartland.
See Maxchief, 2017 WL 3479504, at *5 (finding that the case was “not so far along that transfer
would frustrate judicial economy” because the court had “not issued any rulings on claim
construction and the parties have not yet filed dispositive motions”); Valspar, 2017 WL
3382063, at *5 (“While the court has not yet progressed to the point of dispositive motions or
claim construction, it has advanced far enough that it would serve only to delay the progress of
justice to require [the plaintiff] to start again at square one.”). As discussed above, the parties
have already filed dispositive motions, engaged in claim construction, and have otherwise fully
litigated this case up to the eve of trial. Under § 1406(a), the Court is required to either dismiss
the case or to transfer venue. See Cutsforth, 2017 WL 3381816, at *5 (regretting the “waste of
judicial resources after five years of litigation” but transferring the case nevertheless).While
transfer may serve to further delay a final resolution to this case, dismissing it would cause an
even greater delay and would be far more prejudicial to Plaintiff. “But 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.” Id. at *5. Accordingly, the Court concludes that transfer
to the Southern District of California is required.
//
//
//
//
//
//

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CONCLUSION
Defendant’s motion to dismiss or transfer venue to the Southern District of California
[163] is GRANTED. This action is transferred to the United States District Court for the
Southern District of California and the Clerk of the Court is hereby directed to effect the transfer.
Dated this

day of ______________________, 2017.

MARCO A. HERNÁNDEZ
United States District Judge

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