Genuine Enabling Technology LLC v. Nintendo Co. Ltd. et al.
Filing
44
MEMORANDUM OPINION. Signed by Judge Mitchell S. Goldberg on 2/25/2019. (ceg)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
____________________________________________
:
GENUINE ENABLING TECHNOLOGY, LLC, :
:
Plaintiff,
:
:
v.
:
:
NINTENDO CO., LTD., and
:
NINTENDO OF AMERICA, INC.,
:
:
Defendants.
:
____________________________________________:
Goldberg, J.
CIVIL ACTION
No. 17–134
February 25, 2019
MEMORANDUM OPINION
Currently before me in this patent infringement action is a motion challenging venue in
this district. Plaintiff, Genuine Enabling Technology, LLC, a Delaware limited liability
company, brought this action in this district, asserting patent infringement claims against two
defendants—Nintendo Co., Ltd, a Japanese company, and its wholly-owned subsidiary,
Nintendo of America, Inc., which is incorporated in the State of Washington.
Nintendo of America contends that venue in this district is improper under the patent
venue statute, 28 U.S.C. § 1400(b), and moves for dismissal or, alternatively, transfer of the
entire case to the United States District Court for the Western District of Washington. Plaintiff
responds that Nintendo of America waived its ability to challenge venue in this district by
registering to do business in Delaware and by designating an agent to receive service of process
here. For the reasons that follow, I will grant Nintendo of America’s Motion, and transfer this
case, in its entirety, to the Western District of Washington.
1
I.
FACTUAL & PROCEDURAL BACKGROUND1
Plaintiff alleges that it is the owner of a patent that claims a method of data encoding and
synchronization. In its Complaint for Patent Infringement, filed in this district on February 8,
2017, Plaintiff asserts infringement claims against Defendants, Nintendo Co., Ltd. (hereinafter
“Nintendo (Japan)”), and its wholly owned subsidiary, Nintendo of America, Inc. (hereinafter
“Nintendo of America”).2 Plaintiff alleges that Defendants market and sell video game consoles
and controllers that infringe Plaintiff’s patent. (Compl. ¶¶ 4, 8, 19-20, 21-24.)
As noted above, Plaintiff is a Delaware limited liability company. Nintendo (Japan) is a
Japanese company. Nintendo of America is incorporated in the State of Washington, but is
registered to do business in Delaware and has appointed an agent to receive service of process
here. (Compl. ¶¶ 2-3, 5-6.)
Nintendo (Japan) filed an answer, raising improper venue as an affirmative defense.
Nintendo of America, however, filed the instant Motion to Dismiss or Transfer, under 28 U.S.C.
§ 1406(a).3 In its Motion, Nintendo of America argues that, under the patent venue statute, 28
U.S.C. § 1400(b), venue is improper in this district, because it is neither incorporated in
Delaware nor has a regular and established place of business here. Plaintiff initially responds that
Nintendo of America: (1) does have a regular and established place of business in Delaware; and
The following facts are not in dispute for purposes of the instant motion, and are drawn from Plaintiff’s
Complaint and the parties’ briefs.
1
2
On May 18, 2017, Chief Judge D. Brooks Smith of the United States Court of Appeals for the Third
Circuit designated me as a visiting judge for the District of Delaware, pursuant to 28 U.S.C. § 292(b), to
handle this and other Delaware cases.
3
Nintendo of America and Nintendo (Japan) have also filed a motion seeking transfer to a more
convenient venue under 28 U.S.C. § 1404(a). Because I will grant Nintendo of America’s Motion under
§ 1406(a), and transfer the entire case to the Western District of Washington, I need not reach the motion
brought under § 1404(a).
2
(2) waived its ability to challenge venue in this district by registering to do business in Delaware
and by designating an agent for service of process in this state.
While the Motion was pending, Plaintiff informed the Court that, in light of a subsequent
decision by the United States Court of Appeals for the Federal Circuit, it would no longer argue
that Nintendo of America has a regular and established place of business in Delaware, or seek
jurisdictional discovery on that issue. Rather, Plaintiff would rest its opposition to the Motion
solely on its argument that Nintendo of America waived its ability to challenge venue in this
district. (Pl.’s 10/25/2017 Ltr., Doc. No. 36.)
For the reasons set out below, I conclude that Nintendo of America has not waived its
ability to challenge venue in this district. Accordingly, I will grant the Motion and transfer the
entire case to the Western District of Washington, where venue is proper as to both Defendants.
II.
LEGAL STANDARD
When a plaintiff files a suit in an improper forum, “district courts are required either to
dismiss or transfer to a proper forum.” Lafferty v. St. Riel, 495 F.3d 72, 77 (3d Cir. 2007) (citing
Goldlawr, Inc. v. Heiman, 369 U.S. 463, 465–66); 28 U.S.C. § 1406(a). Motions to dismiss for
improper venue “generally require the court to accept as true the allegations of the pleadings.”
Heft v. AAI Corp., 355 F. Supp. 2d 757, 762 (M.D. Pa. 2005) (citing Pinker v. Roche Holdings
Ltd., 292 F.3d 361, 368 (3d Cir. 2002)). “The parties may submit affidavits in support of their
positions, and may stipulate as to certain facts, but the plaintiff is entitled to rely on the
allegations of the complaint absent evidentiary challenge.” Heft, 335 F. Supp. 2d at 762 (citing
Carteret Sav. Bank, F.A. v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir. 1992); Myers v. Am. Dental
Ass’n, 695 F.2d 716, 724 (3d Cir. 1982)). “Dismissal is considered to be a harsh remedy . . . and
transfer of venue to another district court in which the action could originally have been brought,
3
is the preferred remedy.” Spiniello Cos. v. Moynier, No. 13-5145, 2014 WL 7205349, at *5
(D.N.J. Dec. 17, 2014) (quoting NCR Credit Corp. v. Ye Seekers Horizon, Inc., 17 F. Supp. 2d
317, 319 (D.N.J. 1998)).
III.
ANALYSIS
Venue for a patent infringement action is governed by the patent venue statute, 28 U.S.C.
§ 1400(b), which provides that “[a]ny civil action for patent infringement may 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.” This statute constitutes “the
exclusive provision controlling venue in patent infringement proceedings and [is] not
supplemented or modified by the general venue statutes,” set out in 28 U.S.C. § 1391. TC
Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514, 1518 (2017) (internal
quotation marks omitted).
In TC Heartland, the Supreme Court confronted the question of where a domestic
corporation “resides” for purposes of § 1400(b). 137 S. Ct. at 1516. The Court concluded that a
corporation resides only in its state of incorporation, rejecting an interpretation of § 1400(b) that
would have imported the broader definition of the term found in the general venue statute,
§ 1391. Id. Accordingly, under § 1400(b), as interpreted in TC Heartland, venue as to a domestic
corporation that is a defendant in a patent infringement action is proper only: (1) in a district
within the corporate defendant’s state of incorporation, or (2) in a district where the corporate
defendant has a regular and established place of business and has committed acts of
infringement.
4
As Plaintiff now concedes, Nintendo of America meets neither of these conditions, such
that venue is appropriate in this district. Nintendo of America is incorporated in Washington, not
Delaware, and does not have a regular and established place of business in this district.
Accordingly, under § 1400(b), venue is not proper in this district.
Nevertheless, Plaintiff contends that a corporate defendant may waive its ability to
challenge improper venue under § 1400(b), and that Nintendo of America has done so by
registering to do business in Delaware and by appointing an agent for service of process in this
state. In advancing this argument, Plaintiff cites a line of cases beginning with the Supreme
Court’s decision in Neirbo Company v. Bethlehem Shipbuilding Corporation, Limited, 308 U.S.
165 (1939). Nintendo of America responds that the holding of Neirbo is inapplicable to patent
infringement actions governed by the patent venue statute, § 1400(b).
In Neirbo, the Supreme Court began with the observation that venue, unlike subjectmatter jurisdiction, is a “privilege” conferred to defendants by statute, and that “[b]eing a
privilege, it may be lost” (i.e., waived). 308 U.S. at 168. A waiver may occur through “failure to
assert [the privilege] seasonably . . . or by submission through conduct.” Id.
The Neirbo Court then turned to the specific question at issue in that case: whether the
conduct that would constitute a waiver would include a corporate defendant’s “designation . . . of
an agent for service of process, in conformity with the law of [the] state in which suit is
brought.” Id. at 167. The suit in Neirbo had been brought in the United States District Court for
the Southern District of New York. Id. The corporate defendant in the case was not a New York
corporation, but had designated an agent for service of process there, in accordance with the
requirements of New York state law. Id. at 174-75. The Court concluded that, by doing so, the
corporate defendant had waived its ability to challenge the propriety of venue under the general
5
venue statute—a predecessor of the currently applicable general venue statute, § 1391. Id. at
168-175.
Since the Neirbo decision, several federal courts—both courts of appeals and district
courts—have considered whether Neirbo’s holding, that a corporate defendant waives its ability
to challenge proper venue under the general venue statute, applies equally to actions governed
by the patent venue statute, § 1400(b). While the United States Courts of Appeals for the Third
and Federal Circuits are not among these courts,4 it appears that every federal court that has
squarely confronted the question has reached the same conclusion: that the Neirbo rule is
inapplicable to cases governed by the patent venue statute.
The United States Court of Appeals for the Second Circuit addressed the question in
1943, just four years after the Neirbo decision. See Bulldog Elec. Prods. Co. v. Cole Elec. Prods.
Co. (“Bulldog”), 134 F.2d 545, 547 (2d Cir. 1943). In Bulldog, the plaintiff brought a patent
infringement action in the United States District Court for the Eastern District of New York
against a corporate defendant that was incorporated in Pennsylvania, but had designated an agent
for service of process in New York. Id. at 546. The corporate defendant challenged venue under
the patent venue statute—a predecessor to § 1400(b). Id. Before turning to whether venue was
proper under that statute, the court first considered whether, under the Supreme Court’s holding
in Neirbo, the corporate defendant’s designation of an agent for service of process in New York
constituted a waiver of its ability to challenge venue there. Id. at 547. Concluding that it did not,
the court noted that while the designation of an agent for service of process in New York meant
Accordingly, I need not decide which circuit’s law controls. See In re Micron Tech., Inc., 875 F.3d
1091, 1097 & n.3 (Fed. Cir. 2017) (addressing, as a matter of first impression, whether the Supreme
Court’s decision in TC Heartland constituted a change in the law sufficient to permit a defendant to
challenge venue without having earlier raised the issue in a Rule 12 motion, and noting that the court
“need not decide whether [Federal Circuit] law or the relevant regional circuit’s law governs the
particular waiver question presented,” given that “[n]o decision of the Supreme Court or a circuit
court . . . r[an] counter to [the court’s] common-sense interpretation”).
4
6
that the corporate defendant “may be sued in the federal courts sitting in New York, at least
where diversity is the ground of federal jurisdiction,” the corporate defendant “was clearly
entitled to assert its right not to be sued [in New York] for patent infringement except when
venue of the suit was as required by [the patent venue statute].” Id.
While the Second Circuit’s opinion in Bulldog provided little reasoning in support of its
conclusion, other courts of appeals reached the same conclusion thereafter, providing additional
reasoning. See Carbide & Carbon Chems. Corp. v. United States Indus. Chems., Inc. (“Carbide
& Carbon”), 140 F.2d 47, 50 (4th Cir. 1944); Blaw-Knox Co. v. Lederle, 151 F.2d 973, 974 (6th
Cir. 1945); Ruth v. Eagle-Picher Co., 225 F.2d 572, 577 (10th Cir. 1955). In Carbide & Carbon,
the United States Court of Appeals for the Fourth Circuit held that the Neirbo rule was
inapplicable in patent infringement actions, noting that while the action at issue in Neirbo had
been brought on the basis of diversity of citizenship, and was thus governed by the general venue
statute, “venue in patent infringement suits is to be determined solely by application of [the
patent venue statute] and is not to be extended by the provisions of [the general venue statute].”
140 F.2d at 48 (emphasis added). Likewise, in Blaw-Knox Company, the United States Court of
Appeals for the Sixth Circuit concluded that the rule in Neirbo was inapplicable because the
patent venue statute “is wholly independent of [the general venue statute].” Id.
But the rationale for declining to apply the Neirbo rule in patent infringement actions was
best explained by the United States Court of Appeals for the Tenth Circuit in Ruth, where the
court reasoned that the patent venue statute “reflected a sound policy of long standing,” in which
Congress had determined that “practicality and convenience are best served when [a patent
infringement] case is prosecuted where the alleged acts of infringement occurred and the
defendant has a regular and established place of business.” 225 F.2d at 577. In light of this long-
7
established policy, the court concluded, it should not “lightly infer[]” that Congress intended the
Neirbo rule to apply in patent infringement cases. Id.
District courts, including one district court within the Third Circuit, have uniformly
followed the lead of these decisions of the courts of appeals. See Morse v. Master Specialties
Co., 239 F. Supp. 641, 642-43 (D.N.J. 1964) (holding that “[t]he waiver doctrine of Neirbo . . .
ha[d] no application” to a patent infringement action); see also Mastantuono v. Jacobsen Mfg.
Co., 184 F. Supp. 178, 180 (S.D.N.Y. 1960) (noting that the corporate defendant in a patent
infringement action “ha[d] not, by the mere designation of the New York Secretary of State to
receive process, waived its right to [challenge proper venue] under § 1400(b)”); Harris-Intertype
Corp. v. Photon, Inc., 185 F. Supp. 525, 530-31 (S.D.N.Y. 1960) (noting that “the rationale of
Neirbo was not applicable to a patent infringement action”). Recognizing this trend, treatises and
other secondary sources have reached the same conclusion. See 14D Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 3823 (3d ed. 2007) (“[T]he designation of an
agent for the receipt of process in a district is not a consent to be sued for patent infringement
there if the district would not be proper otherwise.”); Jean F. Rydstrom, Annotation, What
Constitutes “Regular and Established Place of Business” Within the Meaning of 28 U.S.C.A.
§ 1400(b) Fixing Venue in Actions for Patent Infringement, 12 A.L.R. Fed. 502 (1972) (“[T]he
Neirbo rule does not apply in a civil action for patent infringement.”).
The reasoning of these cases is based upon Congress’s purpose in enacting a patent venue
statute that is both exclusive of the general venue statute, and narrower than that statute in the
scope of venues that it permits. See Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260, 262
(1961). As the Supreme Court explained in Schnell:
8
[C]ongress adopted the predecessor to § 1400(b) as a special venue statute in patent
infringement actions to eliminate the abuses engendered by previous venue provisions
allowing such suits to be brought in any district in which the defendant could be served.
The Act was designed to define the exact jurisdiction of the courts in these matters, and
not to dovetail with the general venue provisions.
Id. (citations, internal quotation marks, and alterations in the original omitted). This view of
Congress’s purpose was recently reaffirmed by the Supreme Court in TC Heartland, which
rejected an interpretation of § 1400(b) that would have widened the scope of permissible venues
for patent infringement cases by incorporating the definition of corporate residency found in the
general venue statute, § 1391. 137 S. Ct. at 1518 (recounting the history of the patent venue
statute and cases expressing a view of the statute’s purpose, and noting that this “purpose . . .
would be undermined by interpreting [§ 1400(b)] to dovetail with the general provisions relating
to the venue of civil suits” (internal quotation marks omitted)).
Importantly, the Supreme Court has held that this venue purpose must be considered in
determining whether a certain type of conduct on the part of a defendant constitutes waiver of its
ability to challenge proper venue under the patent venue statute. See Schnell, 365 U.S. at 262
(“[C]ourts affix to conduct such consequences as to place of suit consistent with the policy
behind the applicable venue statute.” (internal quotation marks omitted)). In Schnell, the Court
considered whether, in light of Congress’s purpose in enacting the patent venue statute, a
defendant in a patent infringement action should be deemed to have waived its ability to
challenge venue where it assumed responsibility for defending one of its codefendants in the
action, pursuant to an agreement. Id. at 262-64. The Court concluded that this did not constitute
waiver, noting that “the practice [of assuming responsibility for a codefendant’s defense] was not
at all unusual at the time of [the patent venue statute]’s passage, and for us to enlarge upon the
9
mandate of the Congress as to venue in such patent actions would be an intrusion into the
legislative field.” Id. at 262-63.
The reasoning of Schnell applies with even greater force to the practice that Plaintiff
contends constitutes waiver here: registering to do business in a state and designating a local
agent to receive service of process. Not only is this practice longstanding and common—and
thus undoubtedly known to Congress when it enacted the patent venue statute5—but the manifest
purpose of Congress in enacting the statute was, again, to “eliminate the abuses engendered by
previous venue provisions allowing [patent infringement] suits to be brought in any district in
which the defendant could be served.” Schnell, 365 U.S. at 262 (emphasis added). Surely, in
seeking to prevent corporate defendants from being sued for patent infringement “in any district
in which [they] could be served,” Congress did not intend that, by operation of a waiver rule, a
corporate defendant could be sued in any state in which it had appointed an agent to receive
service of process.
Plaintiff relies on three cases in support of its position that the Neirbo rule is applicable to
patent infringement actions. (See Pl.’s Answering Br. 10-12 (citing Sunbury Wire Rope Mfg. Co.
v. United States Steel Corp. (“Sunbury”), 230 F.2d 511, 513 (3d Cir. 1956); Crosley Corp. v.
Westinghouse Elec. & Mfg. Co. (“Crosley”), 130 F.2d 474, 476 (3d Cir. 1942); In re First Solar
Derivative Litig. (“In re First Solar”), No. 12-cv-417, 2013 WL 817132, at *5-6 (D. Del. Mar. 4,
2013.)) But each of these decisions is distinguishable from this case, as none involved an action
for patent infringement governed by the patent venue statute.
5
Congress first enacted a specific patent venue statute—the predecessor to § 1400(b)—in 1897. See TC
Heartland, 137 S. Ct. at 1518. The practice, by states, of requiring out-of-state corporations to register to
do business within the state and appoint a local agent for service of process goes back to at least 1877—
and thus precedes the enactment of the patent venue statute by at least 20 years. See Ex parte
Schollenberger, 96 U.S. 369, 370 (1877) (considering the jurisdictional effect of a Pennsylvania statute
requiring any out-of-state insurance company, before doing business in Pennsylvania, to designate an
agent for service of process in Pennsylvania).
10
In Sunbury, the United States Court of Appeals for the Third Circuit considered whether,
in an antitrust action under the Clayton Act, venue was proper in the Eastern District of
Pennsylvania, where the corporate defendant was incorporated in New Jersey but had registered
to do business in Pennsylvania. 230 F.2d at 512. In concluding that the corporate defendant had
waived its ability to challenge venue under Neirbo, the court rejected the argument that Neirbo
was limited to cases involving state law claims brought under diversity of citizenship
jurisdiction. Id. at 513. The court explained that “there is no federal rule or overriding federal
policy which limits the effectiveness of this type of consent [i.e., waiver] in its application to
federal litigation [i.e., cases involving a federal question].” Id.
Plaintiff urges that the same reasoning applies here, contending that “venue in patent
cases, just like venue in any other federal litigation, is governed by federal statute, and therefore,
any rule regarding waiver (including the rule established in Neirbo) should apply equally to
patent cases as to all other federal question cases.” (Pl.’s Answering Br. 11.) But this argument
neglects the Supreme Court’s instruction to consider the policy embodied in the patent venue
statute when considering waiver. See Schnell, 365 U.S. at 262 (“[C]ourts affix to conduct such
consequences as to place of suit consistent with the policy behind the applicable venue statute.”
(internal quotation marks omitted)).
The purpose of the antitrust venue provision at issue in Sunbury stands in stark contrast
to that of the patent venue statute at issue here: as explained above, the patent venue statute is the
exclusive provision governing venue in patent cases, and its manifest purpose is to limit the scope
of permissible venues. The venue provision of the Clayton Act at issue in Sunbury was not
exclusive of the general venue statute. See Sunbury, 230 F.2d at 512-13 (noting that the choice
of forum “d[id] not satisfy the venue requirements of the Clayton Act or Section 1391 of Title 28
11
[i.e., the general venue statute]” (emphasis added)). Moreover, the Clayton Act expanded, rather
than limited, the scope of permissible venues available to plaintiffs. See Federal Practice and
Procedure § 3818 (3d ed. 2007) (noting that the venue provision of the Clayton Act “had an
important liberalizing effect on antitrust venue when [it] was enacted,” as “the general venue
statutes would have allowed suit only in the district of which all defendants were inhabitants”).
Accordingly, it does not follow from the court’s conclusion in Sunbury—that the Neirbo rule
applied to a federal statute expanding the scope of permissible venues in antitrust cases—that the
rule applies to the patent venue statute. Indeed, the fact that Congress was motivated by opposite
purposes in enacting the two venue statutes suggests that the results should be different.
Plaintiff similarly misses the mark in relying on a recent case from this district that
considered the applicability of the Neirbo rule to a shareholder derivative suit, a type of suit
governed by a special federal venue statute, 28 U.S.C. § 1401. See In re First Solar, 2013 WL
817132, at *8. Plaintiff urges that the court’s application of the Neirbo rule to this venue
statute—like Sunbury’s application of the rule to the antitrust venue provision of the Clayton
Act—supports its position that the rule applies to all federal venue statutes. (Pl.’s Answering Br.
11.) But as with the Clayton Act provision at issue in Sunbury, Plaintiff fails to appreciate
Congress’s diametrically opposed purposes in enacting the derivative action venue statute and
the patent venue statute. As the Court concluded in In re First Solar, the derivative action venue
statute “is not meant to function as an ‘independent’ venue statute, but instead is used in
conjunction with Section 1391 [i.e. the general venue statute] to allow a plaintiff in such cases to
(potentially) expand the number of district courts where federal venue may be found in
shareholder derivative actions.” 2013 WL 817132, at *10 (emphasis added). Again, by contrast,
the patent venue statute is exclusive of the general venue statute and limits, rather than expands,
12
the districts in which venue lies for patent infringement actions. Accordingly, In re First Solar
does not support Plaintiff’s position that the Neirbo rule applies in patent infringement actions.
Plaintiff’s reliance on the Third Circuit’s decision in Crosley is likewise misplaced,
because that case involved a declaratory judgment action governed by the general venue statute,
not an action for patent infringement governed by the patent venue statute. 130 F.2d at 475. In
Crosley, the plaintiff, an alleged patent infringer, sought a declaration of invalidity and noninfringement. Id. The defendant in the declaratory judgment action—the patent holder—argued
that declining jurisdiction was appropriate, because it had initiated an infringement suit in a
different district court. Id. In support of its position that the court should decline jurisdiction over
the declaratory judgment action, and instead permit the infringement action to proceed, the
patent holder argued that the Neirbo rule would allow a declaratory judgment action in a case
involving patents to proceed “wherever [the patent holder] may be found.” Id. at 476 The Third
Circuit disagreed, concluding that while the Neirbo rule was indeed applicable to declaratory
judgment actions involving patents, it “would only enlarge the venue of suits against a corporate
patent owner and then only to states in which it had appointed a local agent for service of
process.” Id.
Plaintiff argues that, based on this holding, the court “clearly understood that Neirbo
applied to patent cases.” (Pl.’s Answering Br. 11). But a careful reading of the Crosley opinion
only reflects that Neirbo applies to declaratory judgment actions involving patents—because
such actions are governed by the general venue statute, not the patent venue statute. 130 F.2d at
476 (holding that, by contrast to a “patent infringement suit,” which is “governed exclusively by
[the patent venue statute],” a “patent declaratory judgment suit . . . is governed by the provisions
of [the general venue statute]”). And if Crosley suggests anything as to patent infringement
13
actions, it suggests that the Neirbo rule would not apply to such actions. The following passage
from Crosley is telling on this point:
The fact that declaratory judgment suits can only be brought in the home district of a
patent owner or, in the case of a corporate owner, in those foreign states only in which it
has made arrangements to be served with process [i.e., where the Neirbo rule applies],
clearly negatives the [patent holder’s] assertion that the venue of such suits is very much
wider than that permitted to patent infringement suits by [the patent venue statute] under
which, as we have seen, the latter suits may be brought not only in the district of which
the defendant is an inhabitant but also in any other district in which the defendant has
committed acts of infringement and has a regular place of business.
130 F.2d at 476 (emphasis added). By noting that the Neirbo rule does not render the scope of
permissible venues for a patent declaratory judgment suit “very much wider than that permitted
to patent infringement suits by [the patent venue statute],” the court suggests that the Neirbo rule
does not apply to the latter, only to the former. Id. Accordingly, Crosley does not support
Plaintiff’s position that the Neirbo rule applies in patent infringement actions, and, in fact,
suggests the opposite conclusion.
In sum, the Supreme Court has consistently interpreted the patent venue statute as “the
exclusive provision controlling venue in patent infringement proceedings,” and has rejected
interpretations of that statute that would expand its scope and thereby undermine its purpose. TC
Heartland LLC, 137 at 1518. This purpose, the Supreme Court has further instructed, should be
carefully considered when determining whether a defendant’s conduct in a patent infringement
action constitutes waiver of its ability to challenge venue. See Schnell, 365 U.S. at 262. When
the purpose of the patent venue statute is considered, the conclusion in this case becomes clear:
deeming venue waived wherever a corporation has registered to do business and appointed an
agent for service of process would “enlarge upon the mandate of the Congress as to venue in . . .
patent actions,” and would “be an intrusion into the legislative field.” Id. at 263. Accordingly, I
concur with the other federal courts that have considered this issue, and conclude that the Neirbo
14
rule is inapplicable to patent infringement actions governed by the patent venue statute,
§ 1400(b).
Having thus concluded that Nintendo of America did not waive its ability to challenge
venue in this district, and because Plaintiff does not contend that venue in this district is proper
as to Nintendo of America, the Motion to Dismiss or Transfer will be granted. Accordingly, it
remains only to determine whether this action should be dismissed or transferred, and, if the
latter, whether Plaintiff’s claims against Nintendo (Japan) should be transferred as well. Neither
issue is genuinely disputed or presents any difficulty.
As to whether dismissal or transfer is appropriate, Plaintiff contends that “a dismissal
would unfairly prejudice [it] under the circumstances,” given that the case was initiated
approximately two years ago, and that, by statute, damages are not recoverable for infringement
that occurred more than six years prior to the filing of the complaint. (See Pl.’s 10/25/2017 Ltr.,
Doc. No. 36, at 2 n.1 (citing 35 U.S.C. § 286.)) For this reason, and noting that neither Defendant
has offered any reason why dismissal is a more appropriate remedy, I will exercise my discretion
to transfer the claims against Nintendo of America to a proper venue rather than dismiss them.
See Spiniello Cos., 2014 WL 7205349, at *5 (“[I]f the court finds that the interests of justice
would be served, it may transfer the case to a proper venue.”).
And because the claims against Nintendo (Japan) involve the same factual and legal
issues as those against Nintendo of America, I will transfer the entire case to the Western District
of Washington, where venue is proper as to both Defendants. See Cottman Transmission Sys.,
Inc. v. Martino, 36 F.3d 291, 296 (3d Cir. 1994) (holding that “[w]here venue is proper for one
defendant but not for another and dismissal is inappropriate, the district court . . . [may] transfer
the case to another district that is proper for both defendants,” and that a district court should do
15
so where severing the claims would cause “the same issues to be litigated in two places” (internal
quotation marks omitted)).6
IV.
CONCLUSION
For the reasons set out above, Defendant Nintendo of America’s Motion to Dismiss or
Transfer Venue will be granted and this case, in its entirety, will be transferred to the United
States District Court for the Western District of Washington.
An appropriate Order follows.
6
Venue in the Western District of Washington is proper as to Nintendo of America under § 1400(b), as it
is incorporated in Washington. TC Heartland, 137 S. Ct. at 1517. And as an alien corporation, Nintendo
(Japan) cannot challenge venue in any district. See In re HTC Corp., 889 F.3d 1349, 1354-1359 (Fed. Cir.
2018) (concluding that, in a patent infringement action, venue would lie against an alien corporation in
any district, as “alien defendants are outside the operation of the federal venue laws”).
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