CR Bard v. Smiths Medical ASD
MEMORANDUM DECISION AND ORDER granting #204 Defendant's Renewed Motion to Transfer to the United States District Court for the District of Delaware. The Clerk of Court is directed to transfer the case to the United States District Court for the District of Delaware. Signed by Judge Robert J. Shelby on 11/16/20. (dla) [Transferred from Utah on 11/17/2020.]
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
C.R. BARD, INC., a New Jersey corporation,
and BARD PERIPHERAL VASCULAR,
INC., an Arizona corporation,
MEMORANDUM DECISION AND
ORDER GRANTING DEFENDANT’S
RENEWED MOTION TO TRANSFER
TO THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF
SMITHS MEDICAL ASD, INC., a Delaware
Chief District Judge Robert J. Shelby
Magistrate Judge Daphne A. Oberg
Plaintiffs C.R. Bard, Inc. and Bard Peripheral Vascular, Inc. (collectively, Bard)1 develop
and manufacture medical devices. Bard filed suit claiming Defendant Smiths Medical ASD, Inc.
(Smiths) infringed on two of Bard’s patents. Smiths denies the allegations. Before the court is
Smiths’s Renewed Motion to Transfer for Improper Venue.2 For the reasons explained below,
the Motion is GRANTED, and the case is TRANSFERRED to the District of Delaware.
Bard commenced this action on January 11, 2012, alleging Smiths infringed two of
Bard’s patents related to its power injectable port technology.3 Bard concurrently filed in this
On July 12, 2017, C.R. Bard assigned the patents at issue in this case to Bard Peripheral Vascular, including all
causes of action for past, present, and future infringement claims. See Dkt. 122 (Motion to Substitute a Party) at 2.
C.R. Bard then moved the court to substitute Bard Peripheral Vascular as the named Plaintiff in this case. Id. The
court denied the Motion and instead ordered joinder of C.R. Bard and Bard Peripheral Vascular. See Dkt. 140
(Order Denying Substitution).
Dkt. 2 (Complaint) at 2–4 (U.S. Patent No. 7,947,022; U.S. Patent No. 7,785,302).
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court two other actions involving the same patents against Medical Components, Inc. and
AngioDynamics, Inc.4 While the cases were in initial proceedings, AngioDynamics filed with
the United States Patent & Trademark Office (USPTO) a petition for inter partes reexamination.5
After the USPTO granted the petition for review, Smiths successfully moved to stay this case.6
On December 17, 2012, the case was administratively closed.7 Upon completion of the
USPTO’s inter partes reexamination proceedings, the court on October 4, 2019 lifted the stay
and reopened the case.8
While the case was stayed, the Supreme Court decided TC Heartland LLC v. Kraft Foods
Group Brands LLC, holding that for venue purposes a corporate defendant in a patent
infringement action resides only in its state of incorporation.9 That holding significantly changed
existing law.10 Shortly after this case was reopened, Smiths moved to transfer under the new rule
announced in TC Heartland.11 Smiths argued transfer was required because it is incorporated,
and therefore resides, in Delaware, and it does not have a regular and established place of
See cases 2:12-cv-32 and 2:12-cv-35, respectively.
See Dkt. 83 (Motion to Stay) at 2. AngioDynamics challenged three of Bard’s patents involving power injectable
port technology, but only two of the patents are at issue in this case. See supra note 3.
See Dkt. 89 (Motion for Extension of Stay); Dkt. 97 (Order granting stay).
See Dkt. 98.
See Dkt. 152.
137 S. Ct. 1514, 1517 (2017).
See In re Micron Technology, Inc., 875 F.3d 1091, 1094 (Fed. Cir. 2017).
See Dkt 157 (Motion to Transfer).
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business in Utah.12 Challenging that assertion, Bard filed a motion for venue discovery,13 which
the court granted.14
Following venue discovery, Smiths filed a Renewed Motion to Transfer for Improper
Venue, which is now before the court.15 Bard opposes the Motion, arguing venue is proper in the
District of Utah because (1) Smiths waived its ability to challenge venue in 2012 when it
affirmatively stated in its Answer that venue here was proper and then filed counterclaims
against Bard, and (2) the home offices of two Utah-based Smiths sales representatives and a Utah
storage unit paid for and used by Smiths sales representatives proves that Smiths had a regular
and established place of business in Utah at the time this lawsuit was filed.16
The court concludes venue in the District of Utah is improper and GRANTS Smiths’s
Renewed Motion to Transfer.
“Upon motion by the Defendant challenging venue in a patent case, the Plaintiff bears the
burden of establishing proper venue.”17 Venue is established under 28 U.S.C. § 1400(b), which
provides: “[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.” The Supreme Court recently held in TC Heartland
that in the context of a patent infringement action, a corporate defendant resides only in its state
Id. at 4.
Dkt. 168 (Order granting venue discovery).
See Dkt. 214 (Opposition Memo.) at 1.
In re ZTE (USA) Inc., 890 F.3d 1008, 1013 (Fed. Cir. 2018).
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of incorporation.18 Smiths asserts venue is no longer proper in the District of Utah under TC
Heartland because it is incorporated, and thus resides, in Delaware. For that reason, Smiths
maintains venue here is proper only if Smiths has committed acts of infringement in Utah and
had “a regular and established place of business” in the state when the case was filed in 2012.19
Smiths denies it had such a place of business.
Bard argues venue is proper in the District of Utah because (1) Smiths waived its right to
challenge venue, and (2) Smiths had a regular and established place of business in the District
when the case was filed. The court addresses each argument in turn.
Smiths Did Not Waive Its Right to Challenge Venue
Bard first argues Smiths waived its right to challenge venue because it admitted in its
Answer to the 2012 Complaint that venue here was appropriate, and because it sought
affirmative relief here when it chose to assert counterclaims against Bard. The court disagrees.
A. Legal Standard
Patent venue law has changed substantially over the past fifty years, with numerous
courts evaluating the relationship between the patent venue statute, § 1400(b), and the general
venue statute, 28 U.S.C. § 1391(c).20 In 1957, the Supreme Court held the then-existing version
of § 1391(c) did not apply to § 1400(b), meaning that patent venue was separate and distinct
from general venue requirements.21 Following 1988 Congressional amendments to § 1391(c),
137 S.Ct. at 1517.
28 U.S.C. § 1400(b) (2018).
Section 1391(c)(2), as most recently amended in 2011, states, “[A]n entity with the capacity to sue and be sued in
its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in
any judicial district in which such defendant is subject to the court’s personal jurisdiction . . . .”
See Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 229 (1957).
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the Federal Circuit concluded in V.E. Holding Corp. v. Johnson Gas Appliance Co.22 that the new
§ 1391 amendments “furnished a definition of ‘resides’ that applied to § 1400(b).”23 Under the
new amendments, a corporate defendant was “deemed to reside in any judicial district in which it
[wa]s subject to personal jurisdiction at the time the action [wa]s commenced.”24 Crucially, the
court in V.E. Holding broadly expanded patent venue jurisdiction by linking it with the general
Because the Federal Circuit retains nationwide original jurisdiction in patent cases,25 the
V.E. Holding decision set binding precedent for all federal district courts across the country and
remained good law for nearly thirty years.26 On May 22, 2017, “the Supreme Court changed the
controlling law when it decided TC Heartland.”27 The Court concluded “the [1988 and 201128]
amendments to § 1391 did not modify the meaning of § 1400(b)” as interpreted by the Court’s
917 F.2d 1574, 1575 (Fed. Cir. 1990).
In re Micron, 875 F.3d at 1098.
Id. at 1098–99 (internal quotation marks and citations omitted).
See 28 U.S.C. § 1295(a)(1) (2018) (“The United State Court of Appeals for the Federal Circuit shall have
exclusive jurisdiction of an appeal from a final decision of a district court of the United States . . . in any civil action
arising under . . . any Act of Congress relating to patents.”)
Federal Circuit law governs on all matters of substantive patent law, while regional circuit law governs procedural
issues. Although venue is a procedural issue, the Federal Circuit explains, “[A] procedural issue that is not itself a
substantive patent law issue is nonetheless governed by Federal Circuit law if the issue pertains to patent law, if it
bears an essential relationship to matters committed to our exclusive control by statute, or if it clearly implicates the
jurisprudential responsibilities of this court in a field within its exclusive jurisdiction.” Laboratory Corp. of America
Holdings v. Chiron Corp., 384 F.3d 1326, 1330 (Fed. Cir. 2004) (citation omitted). Therefore, “the interpretation of
§ 1400(b), a patent-specific statute, including its relation to § 1391, is a matter of Federal Circuit law, not regional
circuit law (subject, of course, to Supreme Court law).” In re Oath Holdings Inc., 908 F.3d 1301, 1305 (Fed. Cir.
In re Micron, 875 F.3d at 1099.
Congress again amended § 1391 in 2011. The Federal Circuit reasoned the 2011 amendments provided no basis
to reconsider its prior decision and reaffirmed V.E. Holding. See In re TC Heartland LLC, 821 F.3d 1338, 1343
(Fed. Cir. 2016), rev’d and remanded sub nom. TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514
(2017) (“We reject Heartland’s argument that in 2011 Congress codified the common law regarding venue in patent
suits as described in Fourco.”).
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earlier case law.29 In contrast to § 1391’s default definition, the term “resides” as applied to
patent venue in § 1400(b) “refers only to the State of incorporation” of corporate defendants.30
This change, which severed § 1400(b) from § 1391(c), made available an objection to venue
based on lack of residence for defendants nationwide who were currently involved in pending
Despite this change of law, many district courts initially concluded that defendants
waived their right to challenge venue under Federal Rule of Civil Procedure 12(h)(1) and Rule
12(g)(2) where they previously omitted a venue defense from their answers or initial motions to
dismiss.32 The Federal Circuit definitively rejected that approach when it decided In re Micron,
explaining, “The venue objection was not available until the Supreme Court decided TC
Heartland because, before then, it would have been improper, given controlling precedent, for
the district court to dismiss or to transfer for lack of venue.”33 In a follow-up case, In re Oath
Holdings, the Court again clarified that “issues of waiver or forfeiture of patent-venue rights
under § 1400(b)” are governed by Federal Circuit law and that “Micron answers the entire
question of waiver under Rule 12(g)(2) and (h)(1) . . . there [is] no such waiver.”34
Bard nevertheless claims Smiths waived its right to challenge venue because (1) Smiths
expressly admitted in its Answer to the 2012 Complaint that venue here was proper, and (2)
TC Heartland, 137 S.Ct. at 1517.
Id. at 1521.
See In re Micron, 875 F.3d at 1099.
Id. at 1093–94.
Id. at 1096.
908 F.3d at 1305.
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Smiths submitted to the jurisdiction of the court by filing invalidity and non-infringement
counterclaims against Bard.35 The Court finds both arguments unpersuasive.
1. Smiths’s Admission in 2012 Does Not Amount to Waiver
“Under longstanding precedent, it was understood when defendants answered the
complaints filed . . . that venue was proper in a patent infringement case against a corporation in
any district in which the corporation was subject to personal jurisdiction.”36 It is undisputed that
venue here was proper based on then-controlling precedent when this case was filed in 2012.
Consequently, Smiths admitted in its Answer that “venue with respect to it is proper in this
judicial district under 28 U.S.C. §§ 1391 and 1400.”37
As previously explained, a venue objection based on Smiths’s circumstances pre-TC
Heartland was not available when the case was filed, and it is well established that a defendant is
not required to engage in futile gestures solely to avoid a claim of waiver.38 As is the case here,
“a sufficiently sharp change of law sometimes is a ground for permitting a party to advance a
position that it did not advance earlier in the proceeding when the law at the time was strongly
enough against that position.”39
Bard insists Smiths’s specific admission distinguishes this case from other patent cases
pending at the time TC Heartland was decided.40 Unlike Smiths, the defendants in those cases
See Dkt. 214 (Opposition Memo.) at 21–24.
Xodus Medical Inc. v. Prime Medical LLC, 2018 WL 4385243, at *2 (W.D. Pa. Sept 14, 2018) (unpublished).
Dkt. 77 at 3, ¶ 5.
See In re Micron, 875 F.3d at 1098 (collecting cases showing all circuits agree with this position). The Tenth
Circuit explains there is no requirement that a defendant “make a futile attempt . . . given the state of the law,” and
the court will apply a new decision to a pending case when “the decision establishes a new principle of law . . . by
overruling clear past precedent upon which the litigants may have relied.” Peterson v. Shearson/American Exp.,
Inc., 849 F.2d 464, 466 (10th Cir. 1988).
In re Micron, 875 F.3d at 1097.
Dkt. 193 (Surreply) at 3.
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did not explicitly admit venue was proper.41 But this is a distinction without a difference. Venue
here was proper under existing law when this case was filed, and it would have been inconsistent
at least with the spirit of the Rules had Smiths maintained otherwise when the defense was
The Federal Circuit addressed the same question in In re Oath Holdings, where the
defendant admitted to venue in its answer, and the court explained that a litigant “cannot be
faulted for waiting to present a venue objection until after TC Heartland was decided, where the
case was in an early stage, [and] the defense could not properly have been adopted by the district
court at the time.”42 This was true even when the defendant there was aware that TC Heartland
was pending and could result in a change of law. Smiths did not waive its right to challenge
venue post-TC Heartland merely because it admitted in its 2012 Answer that venue was proper
at that time.
2. Smiths’s 2012 Counterclaims Do Not Amount to Waiver
“[F]iling a counterclaim, compulsory or permissive, cannot waive” Rule 12 defenses,
particularly when the moving party has not been “extensively participating in the litigation”
before seeking timely dismissal of the case.43 Further, “the Federal Circuit has suggested that the
[waiver] inquiry should at least start with an examination of the ‘time from when the defense
becomes available to when it is asserted.’”44
See, e.g., In re Micron, 875 F.3d 1091; Genesis Attachments LLC v. Detroit Edge Tool Co., 2019 WL 1924302
(W.D. Wis. Apr. 30, 2019); Xodus Med. 2018 WL 4385243.
908 F.3d at 1306.
Rates Technology Inc. v. Nortel Networks Corp., 399 F.3d 1302, 1308–09 (Fed. Cir. 2005); see also Campbell v.
Bartlett, 975 F.2d 1569, 1574 (10th Cir. 1992) (“We follow the rule that by filing a compulsory counterclaim a party
does not waive Rule 12(b) objections.”).
Intellectual Ventures II LLC v. FedEx Corporation, 2017 WL 5630023 at *3 (E.D. Texas, Nov. 22, 2017) (quoting
In re Micron, 875 F.3d 1091, 1102 (Fed. Cir. 2017)). The Intellectual Ventures Court refers to this as a “forfeiture”
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Considering that a venue defense was unavailable when the case was filed, it was entirely
appropriate that Smiths answered the Complaint and asserted counterclaims seeking affirmative
relief, especially if those counterclaims were compulsory.45 Unlike jurisdictional defenses that
are subject to waiver, seeking affirmative relief in counterclaims will not ordinarily implicate
waiver of venue defenses—at least not here, where Smiths had no way of knowing patent venue
law would change significantly years later while this case was administratively closed. To find
otherwise would place many parties in the untenable position of having to blindly weigh at the
outset of litigation the potential value of claims that may be lost if not asserted against the risk
that asserting those claims could result in waiver of new defenses that may later become
available only as a result of unforeseen changes in the law. Such an approach would impede
rather than promote the orderly and efficient resolution of disputes.
Nevertheless, specific circumstances in individual cases may compel different results. As
appellate courts have counseled, this is particularly so where a new defense becomes available
late in litigation. But notwithstanding the 2012 filing date, this case remains procedurally in its
infancy due to a nearly seven year stay during which the parties were engaged in proceedings
relating to review of the relevant patents.46 Importantly, none of Smiths’s counterclaims have
been actively litigated.
inquiry, but Bard frames the issue as one sounding in waiver. The two terms can be used interchangeably when
considering whether a party’s counterclaims defeat a subsequent improper venue motion.
The length of the stay is reflected in the complex procedural history of this case. During the inter partes
reexamination of the patents at issue, the USPTO initially invalidated the challenged patents. Bard appealed the
decision to the Federal Circuit, which found in 2018 that the USPTO’s claim construction was “unreasonably broad”
and vacated and remanded the case. On remand, the USPTO upheld the three challenged patents. See C.R. Bard v.
AngioDynamics, Inc., No. 2:12-cv-35 (D. Utah) Dkt. 152 (Bard’s Opposition to AngioDynamics’s Initial Motion to
Dismiss or Transfer for Improper Venue) at 3.
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In light of these facts, the court declines to find waiver of its new venue defense based on
Smiths’s filing of counterclaims.47
Smiths Did Not Have a Regular and Established Place of Business in the District
of Utah When the Case Was Filed in 2012
Questions concerning regular and established places of business in venue disputes are
often fact intensive. That is the case here. For this reason, the court provides first a detailed
summary of the relevant facts existing in 2012 when this case was filed.
Smiths employed at the time this suit was filed in 2012 a team of sixteen sales
representatives assigned to cover its Mountain State region, encompassing Arizona, Colorado,
Nevada, Utah, and Wyoming.48 Fourteen of the sales representatives periodically visited Utah on
sales trips from their homes in other states. The remaining two, Claudia Campbell and Mike
Franson, lived in Utah and serviced customers throughout the multi-state territory, including
Utah.49 When in Utah, the sales representatives worked in the field, visiting customers at
hospitals, surgery centers, and other healthcare facilities, and sometimes performing product
demonstrations at customers’ places of business.50
Smiths’s sales representatives typically did not place orders for customers in 2012.
Rather, customers directly placed their own orders using an automated system through a Shared
Other courts have reached a similar conclusion. See, e.g., H.W.J. Designs for Agribusiness, Inc. v. Rethceif
Enterprises, LLC, 2018 WL 827768, at *4 (E.D. Cal. Feb. 12, 2018) (finding assertion of counterclaim did not
waive venue challenge in patent case); Rillito River Solar LLC v. Wencon Dev. Inc., 2017 WL 5598228, at *4 (D.
Ariz. Nov. 21, 2017) (same); see also 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure
§ 1397 (3d ed. 2004) (“The trend in more recent cases is to hold that no Rule 12(b) defense is waived by the
assertion of a counterclaim, whether permissive or compulsory.”).
See Dkt. 157-1 (De Leon Decl.) at ¶ 10; Dkt. 204-1, Ex. A (Supp. Responses) at 3–4.
Dkt. 204-1, Ex. A at 3–4.
Dkt. 157-1 at ¶¶ 10–12.
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Services Center located outside Utah.51 In the rare event a sales representative did place a
customer’s order, they did so via telephone or facsimile through the same out-of-state Shared
Services Center.52 Additionally, Smiths did not provide Utah-based administrative support to the
sales representatives.53 Such support “would have been provided from Smiths Medical’s
corporate headquarters in Minnesota, its Shared Services Center in Dublin, Ohio, or, for product
specific support, one of its other facilities located in Keene, New Hampshire or Southington,
When not working in the field, the sales representatives worked from home offices
performing administrative tasks, including preparing expense reports, making internal telephone
calls, speaking with account managers, and scheduling meetings with customers.55 Although the
sales representatives kept small amounts of Smiths marketing materials and products for
demonstration purposes at their home offices, Smiths did not store product inventory at its sales
representatives’ homes or use the home offices as distribution centers.56 Sales representatives
were reimbursed for home office-related expenses, including home phone lines, internet service,
office supplies, and cell phones.57 Smiths did not own, lease, control, or occupy any portion of a
sales representative’s home or residence, nor did Smiths play any role in selecting any sales
representatives’ residence in Utah.58
Id. at ¶ 11.
Id. 157-1 at ¶¶ 9–12.
Id. 157-1 at ¶ 12.
Dkt. 204-1, Ex. A at 10.
Dkt. 157-1 at ¶ 10.
Id. at ¶ 14.
Id. at ¶ 9.
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In 2012, the sales representatives assigned to Utah also had access to an unmarked,
shared 10’ x 20’ storage unit located in Murray, Utah. The unit was leased by a Smiths sales
representative, who was reimbursed for the leasing cost by Smiths. 59 It was used to store product
samples, marketing literature, and heavier pieces of capital equipment.60 Smiths did not hold the
storage unit out as a place of business, there was no Smiths signage on the unit, and it was not
listed on any Smiths website or directory.61
While all sixteen sales representatives had the ability to access the storage unit, venue
discovery revealed only eight of them potentially did so, with the frequency of use varying
widely among them.62 The sales representatives retrieved sample products stored in the unit and
transported them via company-issued vehicles to customers’ places of business for presentations
and product demonstrations.63 It was Smiths’s company policy not to store any saleable
inventory in nor distribute products from the storage unit, and none of the sales representatives
transacted any business or met with customers at the unit.64
1. Claudia Campbell’s Activities in 2012
Claudia Campbell lived in Utah and was a Smiths “Key Account Manager” when this
action was filed in 2012.65 She was responsible for meeting with corporate buying teams for key
accounts and for accompanying and providing support to other Smiths sales representatives
Id. at ¶ 15.
Id.; Dkt. 206-4, Ex. F (De Leon Depo.) at 128:2–129:7.
Dkt. 216-1 (Plaintiff’s Opp. Memo.), Ex. 1 (Second Supp. Responses) at 14–15.
Dkt. 157-1 at ¶ 15.
Dkt. 216-1, Ex. 1 at 15.
Id. at 5.
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during meetings and demonstrations with customers.66 Campbell spent a typical work week
traveling and visiting out-of-state clients Tuesday through Thursday,67 while using Mondays and
Fridays to call on Utah accounts or work from her home office.68 In 2012, Campbell did not
personally place orders for any of her Utah accounts, nor did she meet with any customers at her
Campbell kept certain materials at her home office, including marketing materials,
support documentation, binders, and instructional manuals that fit within a double-wide file
drawer.70 She also had certain product samples in her home office that she took with her to
customers’ places of business for demonstration purposes.71 These included Smiths’s infusion
hardware, such as the “Medfusion™ pump and patient-controlled analgesia (“PCA”) pump,” and
several boxes of Smiths’s consumable products.72 Campbell ordered additional product samples
from Smiths to be shipped to her home as needed.73
Campbell used the Utah storage unit to store larger quantities of product samples and
larger hardware.74 On average, she went to the unit once a month,75 but she never met with
customers there.76 Campbell acknowledged that although it was Smiths’s policy to not use
Id. at 7.
Id. at 6.
Id. at 11–12.
Id. at 15.
Id. at 7.
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product from the storage unit to fulfill purchase orders, this could have happened “in an
emergency situation involving a product backorder.”77 But there is no evidence Campbell ever
2. Mike Franson’s Activities in 2012
When this case was filed, Mike Franson was a Distribution Manager responsible for
relationships with national distributors.79 Although he lived in Utah, he did not have any Utah
accounts in 2012 and spent very little time working in the state.80 Franson did not perform any
demonstrations or make any sales calls in Utah, nor did he place any orders for Utah customers
Franson maintained a home office in Utah, where he typically worked on Mondays and
Fridays performing administrative tasks.82 He traveled and visited customers outside Utah
Tuesdays through Thursdays.83 At his home office, Franson kept a limited amount of marketing
material and a few select sample products that were used only for demonstration purposes.84 If a
customer needed samples, he ordered them for delivery to the customer’s location.85 Franson
never met customers at his home office,86 and he did not use the Utah storage unit in 2012.87
Dkt. 223 (Defendant’s Reply) at 5.
Dkt. 216-1, Ex. 1 at 8.
Id. at 9.
Id. at 8.
Id. at 15.
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B. Legal Standard
The Federal Circuit announced in In re Cray Inc. a three-part test for determining
whether venue is proper under the “regular and established place of business” prong of 28 U.S.C.
§ 1400(b)88: “(1) there must be a physical place in the district; (2) it must be a regular and
established place of business; and (3) it must be the place of the defendant. If any statutory
requirement is not satisfied, venue is improper under § 1400(b).”89
When applying the three Cray factors, the Federal Circuit stresses that district courts
“should be mindful of th[e] history in applying the statute and be careful not to conflate
showings that may be sufficient for other purposes, e.g., personal jurisdiction or the general
venue statute, with the necessary showing to establish proper venue in patent cases.”90 When
Congress adopted the predecessor to § 1400(b) as a special patent venue statute, it did so “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.”91 Therefore, the standard for
determining a regular and established place of business “requires more than the minimum
contacts necessary . . . for satisfying the doing business standard of the general venue
Because Smiths is incorporated in Delaware, there is no dispute venue would be improper under only the
residency prong of § 1400(b). Therefore, Bard must show under the second prong that Smiths both committed acts
of infringement in the District of Utah and has a regular and established place of business here. Whether Smiths
committed acts of infringement “is a factual question not appropriate for resolution on a motion to dismiss for
improper venue.” Zaxcom, Inc. v. Lectrosonics, Inc., 2019 WL 418860 at *4 (E.D.N.Y. Feb. 1, 2019) (unpublished)
(citing Medicines Co. v. Hospira, Inc., 881 F.3d 1347, 1350 (Fed. Cir. 2018) (“Infringement is a question of fact.”);
In re Cordis Corp., 769 F.2d 733, 737 (Fed. Cir. 1985) (The “issue of infringement” is “a question to be determined
at trial” and “is not reached on the merits in considering venue requirements.”)). Smiths does not contest for
purposes of its Motion Bard’s allegations that it committed infringing acts in this district.
In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017). Federal Circuit law governs the interpretation of what
constitutes a regular and established place of business. “Section 1400(b) is unique to patent law, and constitutes the
exclusive provision controlling venue in patent infringement proceedings . . . [t]hus, Federal Circuit law rather than
regional circuit law, governs our analysis of what § 1400(b) requires.” Id. (internal quotation marks and citation
omitted). See also discussion, supra note 26.
Id. at 1361.
Id. (citing Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260, 262 (1961)).
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provision.”92 The Federal Circuit further explained that “no precise rule has been laid down and
each case depends on its own facts.”93
1. A Physical Place in the District
The defendant’s “place” need not be “a fixed physical presence in the sense of a formal
office or store,” but it must still be “a physical, geographical location in the district from which
the business of the defendant is carried out.”94 Although Campbell’s and Franson’s homes and
the Utah storage unit all fit the description of “a building” and thus,“a physical location,” the
statute requires more. As Cray suggests, courts should consider how the home or storage unit is
used by a defendant to conduct its business.95 This analysis overlaps in many respects with the
elements considered under the third Cray factor. To avoid repetition, the court will examine
Smiths’s 2012 business practices under the final Cray requirement discussed below.
2. A Regular and Established Place of Business
A place of business may be “regular” if it operates in a “steady, uniform, orderly, and
methodical manner.”96 Sporadic activity is not enough to create venue.97 To be “established,”
the place of business cannot be transient; it must be “settled certainly, or fixed permanently.”98
Concerning employees who work from home offices, “if an employee can move his or her home
Id. at 1362.
Id. (internal quotation marks and citation omitted) (emphasis added).
Id. (citation and internal punctuation omitted).
Id. at 1363. (citation and internal punctuation omitted).
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out of the district at his or her own instigation, without the approval of the defendant, that would
cut against the employee’s home being considered a place of business of the defendant.”99
Here, Bard argues the homes of the Smiths sales representatives living in Utah in 2012
were “established” places of business because they were not in the district by happenstance.
Bard contends it was Smiths’s policy to “recruit in the markets that [it] wanted sales reps to live
in.”100 And the business the representatives conducted in their home offices was “regular”
because they performed their job functions there at least two days per week.101 Similarly, the
storage unit was used frequently by at least three sales representatives covering Utah.102 The
court finds this reasoning unpersuasive.
First, as Smiths explains, Utah was never a single-state territory.103 In 2012, it was part of
the Mountain State sales territory, which included four other states.104 None of the sales
representatives were required to live within a particular state, and of the sixteen sales
representatives who covered Utah, only two lived here.105 While it was Smiths’s preference to
hire sales representatives who lived within their assigned territory, they were allowed to live
anywhere within the territory they serviced.106 Additionally, the sales representatives were
allowed to move their homes out of the district if they chose to do so, without prior approval
Dkt. 214 at 15; see also Dkt. 206-4, Ex. F at 59:11–12.
Dkt. 214 at 15.
Id. at 213–14.
Dkt. 204 at 10.
Id.; see also Dkt. 157-1 at ¶ 10; Dkt. 204-1, Ex. A at 3–4.
Dkt. 204 at 10.
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from Smiths.107 As the Cray Court instructed, this fact cuts against finding the home offices to
be established places of business because they were not permanently fixed.
Second, although Campbell and Franson typically worked from their home offices on
Mondays and Fridays, they both spent the majority of their work week traveling and visiting
customers outside Utah.108 For his part, Franson neither had customer accounts in Utah nor did
he make any sales calls within the state during the entirety of 2012.109 The work he performed
for Smiths from his home office was directed entirely to customers outside Utah. Bard has
provided no evidence showing Smiths controlled or arranged Campbell’s or Franson’s schedules
or dictated how often sales representatives were to work from their home offices. Bard has
failed to establish that the work performed by Smiths sales representatives in Utah was “steady,
uniform, orderly, and methodical.”
For similar reasons, the Utah storage unit cannot be considered a “regular” or
“established” place of business. The use of storage units was not part of any uniform Smiths
program.110 At most, it was a convenience that some Smiths sales representatives chose to take
advantage of. Individual sales representatives chose the storage unit’s location, and they were
free to change that location anytime without Smiths’s approval.111 They chose the storage
company, decided whether to enter a lease or pay monthly, and could discontinue the use of the
Dkt. 216-1, Ex. 1 at 7, 8.
Id. at 8.
Dkt. 204 at 11.
See Dkt. 206-4, Ex. F at 21:2–27:5.
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storage unit at any time.112 These facts weigh against finding the storage unit to be an established
place of Smiths’s business.
Further, Bard has provided no compelling evidence showing the storage unit was used in
any orderly or methodical manner. Although eight of Smiths’s Utah sales representatives
possibly used the storage unit, Bard can identify only three who may have used the unit with
some frequency.113 Bard offers no specific dates, official records, or any other evidence showing
the storage unit was used regularly.114 The court lacks sufficient evidence upon which to
conclude that the storage unit was a regular and established place of business. Bard has not
established the second Cray factor necessary to establish venue in this District.
3. The Place of the Defendant
A regular and established place of business must be the “place of the defendant, not
solely a place of the defendant’s employee.”115 The place must be ratified or established by the
defendant. It is not sufficient for the employee to do so on their own.116 The Federal Circuit
identifies several considerations for trial courts evaluating the “place of the defendant” factor,
including: (1) whether the defendant owns, leases, or exercises control over the place; (2)
whether the defendant conditioned employment on the continued residence of the employee in
the district; (3) whether the defendant stored materials at the place in the district for sale or
distribution; (4) whether the defendant used marketing or advertising to indicate that the physical
location was its place of business; and (5) how the defendant’s alleged place of business in the
Id.; Dkt. 223 (Defendant’s Reply) at 6.
See Dkt. 216-1, Ex. 1 at 15.
See Dkt. 214 at 14–16.
Cray, 871 F.3d at 1363 (emphasis in original).
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district compares with other places of business of the defendant in other venues.117 The court
evaluates each consideration in turn.
(a) Ownership and Control
(1) Campbell’s and Franson’s Home Offices
Smiths did not own, lease, or otherwise control any portion of Campbell’s or Franson’s
homes in 2012, nor did Smiths participate in selecting its sales representatives’ homes.118
Although it is Smiths’s policy to provide their sales representatives with computers and cell
phones and to reimburse them for office supplies, internet service, and home phone lines, this is
not enough to render a sales representative’s home office a place of Smiths.119 Such expenditures
are not “intentional actions” directed at creating a regular and established place of business
within a district, but are instead used to support sales representatives who cover broad areas.120
To illustrate, the Cray defendant provided similar materials and reimbursements, but the Federal
Circuit nonetheless found venue improper despite such arrangements.121 As the court explained,
the patent venue statute “clearly requires” more than merely showing “the defendant’s employee
owns a home in which he carries on some of the work that he does for the defendant.”122
Id. at 1363–64.
Dkt. 204 at 12.
Free-Flow Packaging Int’l, Inc. v. Automated Packaging Sys., Inc., 2017 WL 4155347, at *6 (N.D. Cal. Aug. 29,
Cray, 871 F.3d at 1364–65.
Id. at 1365 (citation omitted); see also Regents of Univ. of Minnesota v. Gilead Scis., Inc., 299 F. Supp. 3d 1034,
1043–44 (D. Minn. 2017) (providing computers and reimbursing home office expenses was insufficient to establish
a place of the defendant); Zaxcom, 2019 WL 418860 at *5 (same).
Case 1:20-cv-01543-UNA Document 230 Filed 11/16/20 Page 21 of 29 PageID #: 3333
(2) Utah Storage Unit
Similarly, Smiths did not directly own, lease, or control the Utah storage unit used by its
sales representatives.123 The unit was leased through a third party, and Smiths reimbursed the
expense to the sales representative who leased it.124 Smiths did not manage the products stored
there nor did it require sales representatives to use the storage unit.125 Simply reimbursing the
cost of the unit is not enough to establish it as a place of Smiths.126
Bard contends the storage unit is similar to the lockers at issue in Rensselaer Polytechnic
Inst. v. Amazon.com, Inc., where the court found the lockers represented a regular and
established place of business of the defendant.127 There, defendant Amazon used large, metal
lockers on third-party premises as places where customers could retrieve or drop off packages.128
Amazon operated and maintained the lockers, which were branded with Amazon’s logo and
customer service number, and Amazon promoted the lockers to the public as a secure place to
conduct customer transactions.129 Bard argues that Smiths used the storage unit in this case in a
similar manner to carry out the objective of its business.
Dkt. 204 at 16.
See also Regents, 299 F. Supp. 3d at 1043 (finding offsite storage lockers leased through a third party and
containing a small amount of defendant’s products did not constitute a place of the defendant); Zaxcom, 2019 WL
418860 at *5 (holding no place of defendant where employee leased a UPS mailbox to receive packages of
defendant’s products and was reimbursed for the cost by defendant); Free-Flow Packaging, 2017 WL 4155347 at
*2, 6 (venue improper where defendant reimbursed employee for storage unit where he kept defendant’s products
used for samples and demonstration purposes).
2019 WL 3755446, at *14 (N.D.N.Y. Aug. 7, 2019) (unpublished).
Id. at *3.
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The evidence before the court is to the contrary. Unlike the Rensselaer defendant, Smiths
never held the storage unit out to the public as a place of business, and Smiths sales
representatives conducted no meetings nor customer transactions at the unit. And while the
Rensselaer Court found Amazon’s degree of control over the lockers established a place of
business of the defendant, Smiths did not control the storage unit in a similar manner. The
storage unit was not a Smiths place of business.
(b) Condition of Employment
As explained above under the second Cray factor analysis, Smiths did not condition
employment on the location of a sales representative’s home in Utah. Bard nevertheless
contends that the presence of Utah-based sales representatives—notably Campbell as a Key
Account Manager—was particularly important to Smiths’s business.130 Campbell handled
Smiths’s largest and most important acute hospital accounts in the territory, three of which were
in Utah.131 But these facts do not suggest Campbell was required to live in Utah to carry out her
duties. As Smiths points out, Campbell oversaw key accounts in four other states, and it was not
critical to her job (nor possible) that she live in the state where each key account was located.132
Bard further argues that the administrative work Campbell performed in her home office
was more executive in nature than sales related, and therefore, more important to Smiths’s
business.133 Campbell was responsible for strategic growth planning, sales forecasting, goal
setting, and marshalling Smiths’s resources.134 But while Campbell may have been a key
Dkt. 214 at 4, 15.
Id. at 4.
Dkt. 223 at 3.
Dkt. 214 at 4.
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member of the Smiths’s sales team, that does not change the controlling analysis. The facts in
Cray were similar, where the two employees in question were also high-level staff members in
the defendant’s business. One of the employees was a “senior territory manager,” while the
other was a “sales executive” responsible for sales “in excess of $345 million.”135 The court
explained that even if the employees performed work for the defendant beyond sales, including
“management of key accounts,” it would not change the analysis under the Cray factors.136
Bard’s suggestion that the court separately consider the nature and relative importance of
the tasks performed by each sales representative in the District is an invitation to add a new
element to the third Cray factor. This the court will not do, especially where the Federal Circuit
cautioned against such an approach when it decided Cray, stating, “[W]e do not suggest that
district courts must scrutinize the ‘nature and activity’ of the alleged place of business to make
relative value judgments on the different types of business activity conducted therein.”137 Bard
has not established that Campbell’s home office was Smiths’s place of business simply because
the work she performed there was executive in nature.
(c) Storage of Materials
In contrast, that Campbell and Franson stored Smiths’s products in their home offices and
a significant number of products were also kept in the storage unit weighs in favor of finding one
or more of these a place of business for Smiths.138 It was an important part of Smiths’s business
to have sales representatives carry products in their sales bags and vehicles so they were on hand
Cray, 871 F.3d at 1357.
Id. at 1366.
Id. at 1364, n.*.
See Zaxcom, 2019 WL 418860 at *6 (finding this factor in favor of plaintiff when employee kept a significant
number of defendant’s products in his home and garage).
Case 1:20-cv-01543-UNA Document 230 Filed 11/16/20 Page 24 of 29 PageID #: 3336
for demonstrations while out on sales calls.139 Many of Smiths’s products are consumable, onetime use items, and sales representatives frequently provided multiple samples to customers.140
Thus, it was necessary for sales representatives to keep products in their homes and helpful to
utilize a storage unit for larger quantities of sample products and larger pieces of capital
Although the products stored in the home offices and the storage unit were nonsaleable
inventory, the volume of stored products was notable. For example, over a six-month period in
2012, Campbell shipped to her home approximately 12,300 sample products.142 The products
were small, consumable items, such as needles and syringes, but they are indicative of the
volume of products stored by Smiths’s sales representatives. This is in contrast with Cray,
where the sales representatives in question did not store any products or marketing materials in
An important consideration is whether the stored products were ever directly sold or
distributed to customers. For example, in In re Cordis Corp., the Federal Circuit held venue was
proper where a defendant not only used its employees’ homes to store its “literature, documents,
and products,” but also treated the homes as distribution centers, where inventory was stored and
Dkt. 204 at 13.
See Dkt. 216-1, Ex. 1 at 6 (Regarding consumable products, Campbell usually took five to ten samples of each
given product to a demonstration for clients.).
Id. at 6–7.
Dkt. 214 at 4; Dkt. 216-1, Ex. 1 at 11–12.
871 F.3d at 1365. See also RegenLab USA LLC v. Estar Techs. Ltd., 335 F. Supp. 3d 526, 552 (S.D.N.Y. 2018)
(facts regarding inventory storage at employees' home offices cut in favor of finding venue appropriate where
employees used those products to conduct demonstrations for customers). But cf. Automated Packaging Sys., Inc. v.
Free-Flow Packaging Int'l, Inc., 2018 WL 400326, at *8 (N.D. Ohio Jan. 12, 2018) (finding venue improper where
“small amounts of product are maintained in [employees'] homes, [but] this product is not available for direct sale to
Case 1:20-cv-01543-UNA Document 230 Filed 11/16/20 Page 25 of 29 PageID #: 3337
then taken directly to customers by the employees.144 Although Smiths’s documents and sample
products were kept in the sales representatives’ homes and the storage unit, the products were for
demonstration purposes only.145
Bard makes much of Campbell’s statement that “in an emergency situation involving a
product backorder,” product from the storage unit may have been used to fulfill a purchase
order.146 But Campbell acknowledged this practice was contrary to Smiths’s policy.147 Even
then, Bard has provided no evidence this ever happened. Bard has also failed to produce
evidence showing Smiths treated the sales representatives’ home offices and the storage unit as
inventory deposits or distribution centers.
(d) Outward Representations Concerning the Alleged Places of Business
When determining whether a defendant has represented to the public that it has a place of
business in the district, courts must consider whether the defendant listed the alleged place of
business on a website, telephone or other directory, or placed its “name on a sign associated with
or on the building itself.”148 Smiths did not hold out the storage unit, Campbell’s home, or
Franson’s home as places of business for the company. The three locations were never listed on
Smiths’s website or any company directory,149 and the sales representatives’ business cards
displayed the Ohio address and telephone number of Smiths’s Shared Services Center.150
769 F.2d 733, 735 (Fed. Cir. 1985).
Dkt. 206-4, Ex. F at 81:12–83:9, 81:18–82:22.
Dkt. 216-1, Ex. 1 at 7.
Cray, 871 F.3d at 1363–64.
Dkt. 204 at 14.
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While the business cards also included the Smiths-issued, Utah cellphone numbers for
Campbell and Franson,151 this is insufficient to establish a place of Smiths in the district.152 At
most, the inclusion of the personal phone numbers indicated that Campbell and Franson
conducted business from Utah, not that Smiths established a place of business in the state.153
Indeed, it is an antiquated notion that a personal cell phone number indicates establishment of a
fixed address in a specific area. In the modern era, people do not have to change their cell phone
numbers every time they move or cross state lines, and the area code of a cell phone number only
indicates where the number was initially issued. It no longer creates a permanent link to a
specific geographic location.
Further, there was no Smiths signage in front of or affixed to Campbell’s or Franson’s
homes indicating they were places of business of Smiths. Nor was there any Smiths signage on
the storage unit. In short, “nothing outwardly conveys” that the sales representatives’ homes or
the unmarked storage unit were places of Smiths’s business.154
(e) Comparison of the Alleged Place of Business to Others
The final consideration relates to how the alleged places of business in the district
compare to other places of business of the defendant in other venues.155 The purpose is to reveal,
for example, whether the “defendant has a business model whereby many employees’ homes are
See Cray, 871 F.3d at 1364–66 (employee’s use of an in-district telephone number was not enough to establish a
place of business for defendant); Regents, 299 F. Supp. 3d at 1045 (same); Zaxcom, 2019 WL 418860 at *6 (same).
Cray, 871 F.3d at 1365–66.
Regents, 299 F. Supp. 3d at 1045.
Cray, 871 F.3d at 1364.
Case 1:20-cv-01543-UNA Document 230 Filed 11/16/20 Page 27 of 29 PageID #: 3339
used by the business as a place of business by the defendant.”156 There is no evidence of this
here. Smiths’s business model does not contemplate all employees working from home, and for
those who do, Smiths does not treat their home offices as places of business.157
Telecommuting and the use of home offices has clearly risen significantly over the past
fifteen years. This was the case even before changes this year wrought by the COVID-19 global
pandemic. Arguments that home offices amount to established places of business for corporate
defendants are far less persuasive in the modern era. If the court were to find venue established
here, then virtually every business where an employee works from home could be subject to
venue wherever those home offices are located. This would render the “regular and established
place of business” prong of § 1400(b) all but meaningless. As the Cray Court explained, “[I]t is
of no moment that an employee may permanently reside at a place or intend to conduct …
business from that place for present and future employers. The statute clearly requires that venue
be laid where the defendant has a regular and established place of business, not where the
defendant’s employee owns a home” where some of the employee’s work is carried out.158
When determining whether a defendant has a “regular and established place of business”
within the District under § 1400(b), “no one fact is controlling.”159 Considering the record as a
whole, in view of the history and “restrictive” nature of the patent venue statute,160 the court must
Id. at n.*; see also RegenLab USA LLC, 335 F. Supp. 3d at 549 (observing that because all employees of the
defendant worked from home, their home offices constituted a primary physical location for the defendant's
Dkt. 204 at 18.
Cray, 871 F.3d at 1365 (internal quotation marks and citation omitted).
Cray, 871 F.3d at 1366.
See Stonite Prods. Co. v. Melvin Lloyd Co., 315 U.S. 561, 566 (1942).
Case 1:20-cv-01543-UNA Document 230 Filed 11/16/20 Page 28 of 29 PageID #: 3340
conclude that Smiths had no regular and established place of business in the District of Utah
when this case was filed in 2012.
This Case Should Be Transferred to the District of Delaware
If venue is found lacking, the court under 28 U.S.C. § 1406 may “in the interest of
justice, transfer [the] case to any district or division in which it could have been brought.”
Smiths is incorporated, and therefore, resides in Delaware for purposes of 28 U.S.C. § 1400. As
this case could properly have been brought in Delaware, transfer to the District of Delaware is
appropriate under § 1406.
Because Smiths’s corporate headquarters and principal place of business are located in
Minnesota, Smiths asks the court to transfer instead to the District of Minnesota for the sake of
convenience.161 While the court acknowledges it would be more convenient for Smiths to litigate
this case near its headquarters, it is Bard’s right as plaintiff to choose where to bring its
lawsuit.162 Bard requested transfer to the District of Delaware, an appropriate forum, and the
court will honor that choice.
Dkt. 204 at 23.
“After all, the general rule says the plaintiff is the master of her complaint and gets to choose where and how to
sue.” K.B. by & through Qassis v. Methodist Healthcare – Memphis Hosps., 929 F.3d 795, 799 (6th Cir. 2019)
(citing The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25 (1913) (“The party who brings a suit is master to
decide what law he will rely upon.”)).
Case 1:20-cv-01543-UNA Document 230 Filed 11/16/20 Page 29 of 29 PageID #: 3341
For the reasons explained above, Smiths’s Renewed Motion to Transfer for Improper
Venue is GRANTED.163 The Clerk of Court is directed to transfer the case to the United States
District Court for the District of Delaware.
SO ORDERED this 16th day of November 2020.
BY THE COURT:
ROBERT J. SHELBY
United States Chief District Judge
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