Crest Audio, Inc. v. QSC Audio Products, LLC

Filing 243

ORDER denying 226 Motion to Dismiss or Transfer; finding as moot 233 Motion for Leave to File. Signed by District Judge Carlton W. Reeves on 8/7/2017. (AC)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
CREST AUDIO, INC.

PLAINTIFF

V.

CAUSE NO. 3:12-CV-755-CWR-FKB

QSC AUDIO PRODUCTS, LLC

DEFENDANT
ORDER

The defendant has moved to dismiss or transfer this case for improper venue. Docket No.
226. In considering the issues raised in the motion, the Court has benefitted from the parties’
consistently excellent briefing, as well as an outpouring of decisions from other courts working
to apply the Supreme Court’s recent ruling in TC Heartland LLC v. Kraft Foods Grp. Brands
LLC, 137 S. Ct. 1514 (2017).
It is not clear that this venue dispute has a “right” answer. Well-reasoned decisions have
come down on both sides. Compare iLife Techs., Inc. v. Nintendo of Am., Inc., No. 3:13-CV4987, 2017 WL 2778006, at *7 (N.D. Tex. June 27, 2017) (“TC Heartland does not qualify as an
intervening change in law.”) (Lynn, J.) with Hand Held Prods., Inc. v. Code Corp., No. 2:17167-RMG, 2017 WL 3085859, at *3 (D.S.C. July 18, 2017) (“Even if in a literal sense it may be
said that the law on patent venue has not changed since 1957, it is reasonable that litigants
believe TC Heartland is a change in the law.”) and Westech Aerosol Corp. v. 3M Co., No. C175067-RBL, 2017 WL 2671297, at *2 (W.D. Wash. June 21, 2017) (“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.”).
Forced to choose, however, the undersigned agrees with Judge Lynn (and the majority of
other courts to have weighed in on this point, including my colleague in this district, Tom S. Lee,

in a decision just two weeks ago – Skyhawke Technologies, LLC v. DECA Int’l Corp., No. 3:10CV-708-TSL-RHW, 2017 WL 3132066 (S.D. Miss. Jul. 20, 2017)) that the defendant’s improper
venue argument could and should have been raised at the outset of this case. Twenty-seven years
of reliance on Federal Circuit precedent, Judge Lynn reasoned, “does not change the harsh reality
that a party could have ultimately succeeded in convincing the Supreme Court to reaffirm
Fourco, just as the petitioner in TC Heartland did.” iLife Techs., 2017 WL 2778006, at *7
(quotation marks and citation omitted), pet. denied, In re: Nintendo of Am., Inc., No. 2017-127
(Fed. Cir. July 26, 2017).1 Choosing not to raise the issue might have appeared reasonable, no
doubt, but that choice runs into the wall built by Rule 12(h)(1).
The defendant’s motion to dismiss or transfer is denied. The plaintiff’s motion for leave
to submit additional briefing is denied as moot.
SO ORDERED, this the 7th day of August, 2017.
s/ Carlton W. Reeves
UNITED STATES DISTRICT JUDGE

1

“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, ignores the
significant impact of VE Holding and the patent bar’s reliance on the case for nearly three decades.” OptoLum, Inc.
v. Cree, Inc., No. CV-16-03828-PHX-DLR, 2017 WL 3130642, at *4 (D. Ariz. July 24, 2017) (quotation marks,
citation, and brackets omitted). “The clairvoyance demanded of [Movant] is inconsistent with the doctrine of
waiver,” as one court has explained. CG Tech. Dev., LLC v. Fanduel, Inc., No. 2:16-CV-801-RCJ-VCF, 2017 WL
3207233, at *2 (D. Nev. Jul. 27, 2017) (citation omitted).

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