Snyders Heart Valve LLC v. St. Jude Medical S.C., Inc. et al
MEMORANDUM ADOPTING IN PART 316 REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE. The Court finds that venue is improper in the Eastern District of Texas and this case is hereby transferred to the United States District Court for the District of Minnesota. Signed by District Judge Amos L. Mazzant, III on 6/25/2018. (rpc, )
United States District Court
EASTERN DISTRICT OF TEXAS
SNYDERS HEART VALVE LLC
ST. JUDE MEDICAL S.C., INC., ET AL.
Civil Action No. 4:16-CV-00812
MEMORANDUM ADOPTING IN PART REPORT AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
Came on for consideration the report of the United States Magistrate Judge in this action,
this matter having been heretofore referred to the United States Magistrate Judge pursuant to 28
U.S.C. § 636. On March 7, 2018, the report of the Magistrate Judge was entered containing
proposed findings of fact and recommendations (“the Report”) (Dkt. #316) that Defendants St.
Jude Medical S.C., Inc., St. Jude Medical, Cardiology Division, Inc., and St. Jude Medical, LLC’s
(collectively, “St. Jude” or “Defendants”) Motion for Summary Judgment of Improper Venue
(Dkt. #178) be granted and the case be dismissed for improper venue. Snyders Heart Valve, LLC’s
(“Snyders” or “Plaintiff”) filed objections to the Report (Dkt. #319), to which Defendants filed a
response (Dkt. #321). The Court held a hearing on the objections on May 30, 2018.
The Court has made a de novo review of the objections raised by Plaintiff and is of the
opinion that the Magistrate Judge’s ultimate conclusion that venue is improper in the Eastern
District of Texas is correct and the objections are without merit as to the Magistrate Judge’s
ultimate conclusion. The Court hereby adopts the conclusions of the Magistrate Judge to the extent
explained below and supplements the Report with the following findings and conclusions.
Because of the procedural posture of this case, the Court first discusses the relevant
background. Defendants made their first challenge to improper venue, asserting a challenge based
on the safe harbor provision, on January 17, 2017 (Dkt. #20); however, the motion was withdrawn
(Dkt. #29) pursuant to the parties’ Joint Motion Re: Discovery and Briefing Schedule for the St.
Jude Medical Defendants’ Jurisdiction/Venue/Transfer Motion (Dkt. #27). In this joint motion,
the parties agreed to a schedule for preliminary discovery on jurisdiction and venue, allowing for
Defendants to file preliminary motions on jurisdiction, venue, and transfer after completion of
discovery (Dkt. #27).
On February 13, 2017, after the parties completed discovery, Defendants filed their
Opposed Motion to Dismiss Under Fed. R. Civ. P. 12(b)(3) and Plaintiff’s and Defendants’ Joint
Motion to Hold Defendants’ Opposed Motion to Dismiss in Abeyance (Dkt. #33). In that motion,
Defendants contended that venue was improper under both prongs of § 1400(b), and the parties
jointly requested the Court to hold the motion in abeyance pending the Supreme Court’s ruling in
TC Heartland (Dkt. #33). The Court denied the parties’ request to hold the motion in abeyance
(Dkt. #42); accordingly, briefing on the motion to dismiss proceeded as prescribed by the Eastern
District of Texas Local Rules and the Federal Rules of Civil Procedure. In Defendants’ Brief in
Support of its Opposed Motion to Dismiss Under Fed. R. Civ. P. 12(b)(3), Defendants raised their
challenge to venue based on the safe harbor provision (Dkt. #44). However, on May 12, 2017, the
Court denied the motion to dismiss explaining that even though the Supreme Court of the United
States had granted certiorari in In re TC Heartland, the Federal Circuit had determined venue in
cases alleging patent infringement was proper in “‘any district where there would be personal
jurisdiction over the corporate defendant at the time the action is commenced.’” (Dkt. #98 at p. 2
(quoting VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1583 (Fed. Cir. 1990);
In re TC Heartland LLC, 821 F.3d 1338, 1342–43 (Fed. Cir. 2016)).
On May 22, 2017, the United States Supreme Court decided TC Heartland LLC v. Kraft
Foods Group Brands LLC, 137 S. Ct. 1514 (2017). In TC Heartland, the Supreme Court decided
that “[a] domestic corporation ‘resides’ only in its State of incorporation for purposes of the venue
statute.” 137 S. Ct. at 1517. In light of the new decision, St. Jude filed their Motion to Reconsider
the Court’s May 12, 2017 Order Denying St. Jude’s Motion to Dismiss for Improper Venue
(Dkt. No. 98), and St. Jude’s Renewal of the Same (Dkt. #110). In the motion for reconsideration,
St. Jude again argued that venue was not proper under either prong of § 1400(b), asserting a
challenge based on the safe harbor provision (Dkt. #110).
Instead of contesting the facts
surrounding the safe harbor, Snyders argued that the safe harbor was irrelevant to the venue
consideration and that St. Jude stipulated1 to the fact that it sold accused products in the district
In considering the arguments, the Magistrate Judge recommended that, pursuant to TC
Heartland, Defendants did not reside in this District, but used Defendants’ stipulation to determine
that there were alleged acts of infringement in this District (Dkt. #165). The Magistrate Judge
further recommended that because the safe harbor provision was an affirmative defense raised by
Defendants, Plaintiff was not required to negate the same to establish venue (Dkt. #165). Both
Snyders and St. Jude filed objections to this conclusion (Dkt. #170; Dkt. #171). The Court
overruled the objections and adopted the findings and conclusions of the Magistrate Judge as those
of the Court (Dkt. #188).
Defendants stipulated to the following:
2. Defendants will not contest in this case the “regular and established place of business” prong of
28 U.S.C. 1400(b); and
3. Defendants will not contest in this case that this is a district where Defendants have sold accused
products. (Defendants may, however, argue that any such sales are not acts of infringement, pursuant
to 35 U.S.C. 721(e)(1)).
(Dkt. #125, Exhibit 3 at p. 1).
Subsequently, on September 27, 2017, Defendants filed their Motion for Summary
Judgment of Improper Venue, again arguing that based on the safe harbor provision, there were
no acts of infringement committed in this District and venue was improper (Dkt. #178). Snyders
maintained that the safe harbor provision was irrelevant to venue, while not contesting the alleged
facts surrounding the venue challenge (Dkt. #184). This time, the Magistrate Judge recommended
that the safe harbor provision, in this case, is relevant to the venue inquiry and recommended
granting Defendants’ motion for summary judgment (Dkt. #316).
Before delving into the arguments of the parties, the Court finds that Defendants’ motion
for summary judgment should be treated as a motion for reconsideration of the Court’s previous
venue rulings. 2 The Court is permitted to maintain its own docket and reconsider rulings when
justice so requires. FED. R. CIV. P. 60(a). In this case, the Court finds that justice requires the
Court to re-examine Defendants’ venue challenge at this time. Even though the Court treats this
as a motion for reconsideration, as opposed to a motion for summary judgment, the Court still
addresses Plaintiff’s objections. Plaintiff filed objections to the Report on both procedural and
substantive grounds. St. Jude responds that all of Plaintiff’s objections are without merit and the
Report is correct and well-reasoned. The Court addresses Plaintiff’s objections and St. Jude’s
responses thereto in turn.
According to Plaintiff, “[t]he Report rejects Snyders’ procedural challenges to [St. Jude’s]
motion. But it does not address two of those challenges at all, and errs in rejecting the third.”
(Dkt. #319 at p. 1). The Court considers each of Snyders’ procedural challenges in turn.
The Court need not decide the issue of whether summary judgment is an appropriate vehicle to challenge venue
because the Court construes this motion as a motion to reconsider the Court’s prior rulings regarding Defendants’
A. Preclusive Effect of the Court’s Rulings on St. Jude’s 12(b)(3) Motion
Plaintiff argues that Defendants were already fully heard on their venue challenge. Plaintiff
correctly identifies that Defendants are permitted to submit any evidence available in support of a
motion to dismiss for improper venue, and that, in this case, Defendants did submit evidence.
Plaintiff maintains that the Court already ruled on Defendants’ arguments regarding venue and
that Defendants should not be allowed to make their same arguments again before the Court.
The Court is not persuaded. In a case where a defendant had the “full opportunity to
develop his case for lack of venue, following which the court found facts on conflicting evidence
to support venue”, then that court is “not obliged to retrace its steps and examine the identical
contention in the light of new evidence belatedly offered.’” Ryan v. Glenn, 336 F. Supp. 555, 556–
57 (N.D. Miss. 1971). Although not binding on the Court, the Court finds Ryan persuasive because
of the unique procedural grounds of this case.
Ryan permits the Court to review Defendants’ venue challenge at this stage in the litigation.
Here, the Court had not yet made factual findings on any of the evidence submitted in support of
Defendants’ venue challenge prior to Defendants filing the present venue challenge. As opposed
to making a factual determination on the evidence submitted by the parties on Defendants’ motion
to dismiss, the Magistrate Judge recommended, and the Court adopted, a holding that Plaintiff did
not need to overcome an affirmative defense on a motion to dismiss, i.e. the Court denied the
Defendants’ Rule 12(b)(3) motion on procedural grounds without addressing the substantive
nature of the motion. Accordingly, this case is factually distinguishable from Ryan because the
Court has never considered the evidence submitted in support of Defendants’ venue challenge.
See id. Moreover, although a court “is not obliged to retrace its steps”, it is not prevented from
doing so. See id. at 557. Indeed, as previously stated, the Court is permitted to maintain its own
docket and reconsider rulings when justice so requires. FED. R. CIV. P. 60(a). The Court finds that
justice requires the Court to “retrace its steps and examine” Defendants’ venue challenge despite
its previous procedural rulings on Defendants’ venue challenge.
B. Timeliness of St. Jude’s Venue Challenge Under Federal Rule of Civil Procedure 12
Snyders objects that the Report did not consider its timeliness argument. Snyders argues
that Rule 12 requires that all venue challenges, made pursuant to Rule 12 or not, be made before
any responsive pleading is filed. Snyders identifies that St. Jude’s motion was not filed until six
months after filing a responsive pleading; accordingly, Snyders avers that the motion is late.
Whether or not the Report addressed this argument is immaterial. Even though Federal
Rule of Civil Procedure 12 requires defendants to assert a venue challenge before filing a
responsive pleading, courts often consider motions timely for purposes of Rule 12 as long as the
defense is properly preserved in the party’s answer. Brokerwood Int’l (U.S.), Inc. v. Cuisine
Crotone, Inc., 104 F. App’x 376, 379–81 (5th Cir. 2004); Isbell v. DM Records, Inc., No. 4:07-cv00146, 2011 WL 1299611, at *2 n.2 (E.D. Tex. March 31, 2011) (“courts often ‘consider a
post-answer motion to dismiss as properly before the court as long as the movant also raised the
defense . . . in his or her answer.’” (quoting Delhomme v. Caremark RX Inc., 232 F.R.D. 573, 575–
76 (N.D. Tex. 2005))); Cloeren Inc. v. Extrusion Dies Indus., LLC, No. 1:12-CV-90, 2012 WL
12897045, at *2 (E.D. Tex. Aug. 14, 2012) (“Although a post-answer Rule 12(b)(6) motion is
technically untimely under the Rules, if a defense has previously been included in the answer, a
court will generally allow a Rule 12(b)(6) motion.” (citing Jones v. Lopez, 262 F. Supp. 2d 701,
706 (W.D. Tex. 2001); Puckett v. United States, 82 F. Supp. 2d 660, 663 (S.D. Tex. 1999))).
The Court finds that Defendants properly preserved its objection to venue. Here, on
December 12, 2017, the Court ordered Defendants to answer or otherwise respond to Snyders’
complaint by January 17, 2017 (Dkt. #18). As previously noted, Defendants timely filed their
motions to dismiss for improper venue (Dkt. #20; Dkt. #33). Further, in Defendants’ answer, St.
Jude stated “[a]s set forth in Defendants’ pending motion to dismiss pursuant to Fed. R. Civ. Proc.
12(b)(3) for improper venue and brief in support thereof, Defendants deny venue is proper in this
District.” (Dkt. #46 at ¶ 6). As such, while the motion may technically be untimely pursuant to
Rule 12, the Court finds that Defendants properly preserved their objection to venue.
It appears Snyders also argues that Defendants’ conduct here constitutes waiver of the
objection. (Dkt. #319 at p. 3 (“Here, [St. Jude] did not file its motion for summary judgment of
improper venue until . . . after substantial participation in the case on the merits. . . .”)). The Court
notes that a defendant’s conduct in the litigation can also constitute waiver. Navico, Inc. v. Garmin
Int’l, Inc., No. 2:16-cv-190, 2017 WL 2957882, at *2 (E.D. Tex. July 11, 2017) (citing Infogation
Corp. v. HTC Corp., No. 16-CV-01902-H-JLB, 2017 WL 2869717, at *1 (S.D. Cal. July 5, 2017);
Restoration Hardware, Inc. v. Haynes Furniture Co., No. 16 C 10665, 2017 WL 2152438, at *2
(N.D. Ill. May 17, 2017) (“Defendants gave every indication to Plaintiffs and this Court that they
were defending the case on the merits here . . . [and, therefore,] waived and/or forfeited their
argument that venue is improper . . . .”)). 3 However, such is not the case here. Defendants
repeatedly objected to the propriety of venue in this District, asserting its objection before filing
its answer, objecting to venue in its answer, filing a motion for reconsideration after the Court
denied its motion to dismiss, and filing the present motion challenging venue prior to filing
After the Navico decision, the Federal Circuit decided that TC Heartland was an intervening change in the law. In
re Micron, 875 F.3d 1091, 1099 (Fed. Cir. 2017). The effect of this decision is that defendants did not waive their
argument that venue is improper based on the “residence” prong by failing to assert it timely prior to the Supreme
Court of the United States’ decision in TC Heartland, because the defense was unavailable. However, it is still
possible for a defense of improper venue to be waived, and Navico’s discussion on the law of waiver remains intact.
motions for summary judgment challenging the merits of the case. Accordingly, the Court finds
that Defendants have not waived their objection to venue through their litigation conduct.
C. Timeliness Pursuant to the Parties’ Stipulation and Court Ordered Deadlines
Snyders also argues that Defendants did not file their motion timely under the parties’ Joint
Motion Re: Discovery and Briefing Schedule for the St. Jude Medical Defendants’
Jurisdiction/Venue/Transfer Motion. However, the joint motion states: “[t]he St. Jude Medical
defendants will file any motions relating to preliminary jurisdiction, venue, and/or transfer issues,
by February 8, 2017.” (Dkt. #27 at p. 2). The parties then requested an extension of that deadline:
“[t]he St. Jude Medical defendants will file any motions relating to preliminary
jurisdiction/venue/transfer issues and/or respond to the first amended complaint by February 13,
2017.” (Dkt. #31 at p.1). St. Jude filed a preliminary challenge to venue by February 13, 2017,
and then subsequently challenged venue in the present motion. The Court finds that this action is
not inconsistent with the parties’ agreement or the Court’s order granting the parties’ agreed
Snyders additionally avers that Defendants’ request to transfer the case in their motion for
summary judgment is late pursuant to the Order Governing Proceedings. However, the Court
concludes that although the request to transfer may be late pursuant to the Order Governing
Proceedings, St. Jude properly preserved the objection and it was not waived through their
litigation efforts. Thus, the Court finds that it is in the best interest of the parties to consider the
request to transfer.
Venue in patent infringement actions is governed by 28 U.S.C. § 1400(b). Fourco Glass
Co. v. Transmirra Prods. Corp., 353 U.S. 222, 229 (1957); TC Heartland LLC, 137 S. Ct. at 1519
(holding § 1400(b) “is the sole and exclusive provision controlling venue in patent infringement
actions.”). Under § 1400(b), venue is only proper (1) in the district in which the defendant resides
or (2) in a district “where the defendant has committed acts of infringement and has a regular and
established place of business.” 28 U.S.C. § 1400(b) (emphasis added).
Snyders argues that venue is proper in this District under both the residence prong and the
acts of infringement prong of § 1400(b). St. Jude responds that venue is not proper under either
prong. The Court address both prongs of the venue inquiry in turn, examining the “acts of
infringement” prong first, as this is the primary thrust of the parties’ briefing.
A. Acts of Infringement
Snyders objects that the safe harbor provision is irrelevant to the venue inquiry, and even
if it were relevant, St. Jude cannot prevail on its safe harbor argument. St. Jude responds that, in
light of the statutory framework, the safe harbor provision is relevant and that it applies to protect
the sales in this District. The Court considers both objections in turn.
1. Relevance of the Safe Harbor Provision
Snyders contends that the Report erred in finding the safe harbor relevant to the venue
inquiry. According to Snyders, it must only show “(1) that an act that it alleges to infringe its
patent occurred in the district and (2) that [Defendants] were responsible for that act.” (Dkt. #319
at p. 4). Snyders argues that the Federal Circuit only requires that the act alleged to infringe takes
place in the district. Further, Snyders maintains that it should not have to overcome an affirmative
defense to meet its burden.
The Court first addresses on a very broad scope the relevance of the safe harbor provision
to the consideration of whether venue is proper. An “act of infringement” is defined in § 271. See
generally 35 U.S.C. § 271. The safe harbor provision of § 271 provides that “[i]t shall not be an
act of infringement to make, use, offer to sell, or sell within the United States or import into the
United States a patented invention . . . solely for uses reasonably related to the development and
submission of information under a Federal law which regulated the manufacture, use, or sale of
drugs or veterinary biological products.” 35 U.S.C. § 271(e)(1). Although not specifically created
for the venue inquiry, several courts have looked to § 271 for guidance when determining what
constitutes an act of infringement. See, e.g., Galderma Labs., L.P. v. Teva Pharm. USA, Inc., 290
F. Supp. 3d 599, 606 (N.D. Tex. 2017); Bristol-Myers Squibb Co. v. Mylan Pharm., Inc., No. 17379-LPS, 2017 WL 3980155, at *13 (D. Del. Sept. 11, 2017), MTEC, LLC v. Nash, No. CV 08–
563–AC, 2008 WL 4723483, at *6 (D. Or. Oct. 20, 2008). Accordingly, the Court finds that the
safe harbor is, at the very least, relevant to the venue inquiry because it is found in § 271.
However, when narrowing in on the specifics of the safe harbor provision in relation to
venue challenges, the Court finds that in all but the rarest of circumstances, the safe harbor
provision will not be relevant to the venue inquiry. The Federal Circuit recently clarified that “the
Plaintiff bears the burden of establishing proper venue [under § 1400(b)].” In re ZTE (USA) Inc.,
890 F.3d 1008, 1013 (Fed. Cir. 2018). The Federal Circuit, the Fifth Circuit, and the Eastern
District of Texas, have all held that plaintiffs can satisfy this burden with an allegation of
infringement and that plaintiffs need not prevail on the merits of its infringement claim to satisfy
its venue burden. In re Cordis Corp., 769 F.2d 733, 737 (Fed. Cir. 1985) (citations omitted);
Gaddis v. Calgon Corp., 449 F.2d 1318, 1319 (5th Cir. 1971); Intellectual Ventures II LLC v.
FedEx Corp., No. 2:16-CV-980-JRG, 2017 WL 5630023, at *8 (E.D. Tex. Nov. 22, 2017)
(citations omitted); Astute Tech., LLC v. Learners Digest Int’l LLC, No. 2:12-CV-689-WCB, 2014
WL 12596468, at *5 (E.D. Tex. Apr. 28, 2014) (Bryson, J.). Moreover, the Federal Circuit has
identified the application of the safe harbor provision as a “dispute [that] goes to the merits of [the
plaintiff’s] complaint, not to [a court’s] jurisdiction to hear it.” Amgen, Inc. v. Int’l Trade Comm’n,
565 F.3d 846, 854 (Fed. Cir. 2009). Therefore, generally, plaintiffs need not overcome a
defendant’s safe harbor challenge to establish proper venue.
Nonetheless, this case presents a unique set of circumstances. As an initial matter, while
the Federal Circuit specifically identified in Amgen that a decision on the safe harbor should not
be applied to a court’s, or in that case the International Trade Commission’s, subject matter
jurisdiction, it did not make the same holding regarding venue. Id. While there are limited
similarities between subject matter jurisdiction and venue, there are, clearly, vast differences
between the two. The purpose of a court determining whether it has subject matter jurisdiction
over a case prior to a determination of the merits is that a court cannot properly rule on the merits
of a case if it does not have jurisdiction over the dispute. It naturally follows that if a dispute goes
to both the merits and a court’s jurisdiction, such court would assume jurisdiction and dismiss a
case on the merits as directed in Amgen. Id. However, the same cannot be said for venue. Proper
venue is a personal privilege of the parties which allows the parties to a dispute to have their case
heard in the proper place. See, e.g., Hunt v. Bankers Trust Co., 799 F.2d 1060, 1068 (5th Cir.
1986). Unlike subject matter jurisdiction, proper venue is a privilege that can be waived. See,
e.g., City of New Orleans v. Mun. Admin. Servs., Inc., 376 F.3d 501, 504 (5th Cir. 2004); Hunt,
799 F.2d at 1068. Thus, a court may properly make decisions on the merits of a case even if venue
is not proper in that court. In this case, if the Court determined venue was proper but then
dismissed portions of the case based on the merits of the safe harbor provision, as directed by
Amgen, it would only be able to dismiss the ten sales that took place in the Eastern District of
Texas, leaving only allegations of infringement that took place outside this District. In a case
where the facts are undisputed, this is not the proper result.
Most significantly, and what separates this case from other venue disputes, the parties agree
to all the facts surrounding the venue challenge. If the facts were not agreed to by the parties, the
safe harbor provision would likely never work to defeat a plaintiff’s ability to sufficiently establish
venue. This is an important factual distinction from the cases that decided an allegation of
infringement was sufficient. For example, in Intellectual Ventures II, the defendants disputed that
there were enough pleaded facts to show that the defendants were involved in the activities in the
district. Intellectual Ventures II, 2017 WL 5630023, at *8. The same can be said for the facts in
Amgen, as that case presented a dispute as to whether all the importations accused to infringe were
entitled to the protection of the safe harbor. Amgen, 565 F.3d at 852. Such is not the case here.
St. Jude and Snyders agree that ten sales took place in this District, and those ten sales were made
for the purpose of clinical trials. 4
Based on these unique factual and legal circumstances, the Court finds that the safe harbor
provision is relevant to the venue inquiry in this case.
2. Application of the Safe Harbor Provision
Because the Court determined that the safe harbor provision is relevant to the venue
inquiry, the Court turns to whether the safe harbor provision applies in this case. Snyders objects
to the Report’s conclusion that the safe harbor applies because some of St. Jude’s sales of the
Portico Products were for commercial purposes. Under Snyders’ interpretation of the safe harbor
provision, the safe harbor does not apply to any of Defendants’ sales because they made some
commercial sales; thus, the sales were not “solely” for clinical trials. St. Jude avers that the Report
correctly concluded that the safe harbor applied because the ten sales that took place in the Eastern
The Court acknowledges that there is a legal dispute concerning the application of the safe harbor provision, but
there are no factual disputes surrounding the venue analysis.
District of Texas were part of a clinical trial and not approved for commercial sale by the Food
and Drug Administration (“FDA”).
The parties’ dispute centers on statutory construction and the parties’ interpretation of the
word “solely” in the safe harbor provision. Again, the safe harbor provision protects actions: “to
make, use, offer to sell, or sell within the United States or import into the United States a patented
invention . . . solely for uses reasonably related to the development and submission of information
under a Federal law which regulated the manufacture, use, or sale of drugs or veterinary biological
products.” 35 U.S.C. § 271(e)(1) (emphasis added). The Federal Circuit previously construed this
statute, specifically in relation to the use of the word “solely.” Momenta Pharm., Inc. v. Amphastar
Pharm., Inc., 686 F.3d 1348, 1359–60 (Fed. Cir. 2012). “‘Solely’ modifies ‘uses reasonably
related to the development and submission of information,’ but does not place any other restriction
on when the patented invention may be used without infringing.” Id. Accordingly, the Federal
Circuit concluded that “[a]s long as the use of the patented invention is done to generate
information that will be submitted pursuant to a relevant federal law, that use falls within the safe
harbor.” Id. at 1360. Further, “‘[e]ach of the accused activities must be evaluated separately to
determine whether the exemption applies.’” Amgen, 565 F.3d at 852 (alteration in original)
(quoting Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 200 (2005)).
Based on this guidance, the Court is unpersuaded that the use of the word “solely” means
that any commercial sale precludes the safe harbor from applying to every sale. According to the
statutory construction provided by the Federal Circuit, the Court should look activity by activity
or use by use, which in this case requires the Court to look at each sale individually. Looking at
the ten sales that took place in this District individually, it is undisputed, and has been undisputed
since Defendants’ motion to dismiss, that the sales were made solely for clinical trials, in other
words, “solely for uses reasonably related to the development and submission of information under
a Federal law which regulated the manufacture, use, or sale of drugs or veterinary biological
products.” 35 U.S.C. § 271(e)(1). Therefore, as a matter of law, based on the undisputed evidence,
the safe harbor applies to each of the ten sales that took place in this District. Based on this
application, there are no remaining activities or uses in this District, and, as such, there is no “act
of infringement” to make venue proper in the Eastern District of Texas.
Snyders objects that the Report did not consider its argument that venue is proper because
Defendants reside in the District pursuant to 28 U.S.C. § 1391(d). According to Snyders, TC
Heartland does not apply to 1391(d) because: (1) only § 1391(c) was at issue in TC Heartland;
(2) the language of § 1391(d) is different from § 1391(c) and has been recognized to apply to
section § 1400(b); and (3) the savings clause of § 1391 does not apply to § 1391(d) because it did
not exist at the time of the Fourco decision. Snyders “acknowledge[d] that the Court previously
rejected [this argument]”; however, because the Court is revisiting the venue challenge, the Court
will also address this argument. (Dkt. #319 at p 6).
Despite Snyders’ citation to a recent case from the Western District of New York, which
is not binding on the Court, this Court still finds no error in the Magistrate Judge’s conclusion on
the motion for reconsideration that venue is not proper under § 1391(d) based on the Supreme
Court’s decision in TC Heartland. The Court remains convinced that TC Heartland expressed
clearly that the “savings clause applies to the entire ‘section.’” TC Heartland, 137 S. Ct. at 1521.
As such, the Court adopts the language from the Supreme Court that “‘reside[nce] in §1400(b)
refers only to the State of incorporation”, which means that residence refers only to a corporation’s
state of incorporation when determining venue in cases alleging patent infringement. Id. at 1521
(alterations in original); accord In re Big Commerce, Inc., 890 F.3d 978, 982–83 (Fed. Cir. 2018)
(engaging in a discussion regarding where a defendant resides when it is incorporated in a state
with multiple districts without conducting an analysis on whether personal jurisdiction still plays
a role based on 28 U.S.C. § 1391(d)). Here, none of the Defendants are incorporated in Texas,
and thus, Defendants do not “reside” in the Eastern District of Texas. Accordingly, venue is
improper under the “residence” prong of § 1400(b).
Because the Court finds that venue is improper, the Court turns to Defendants’ request to
transfer this case to the District of Minnesota. If venue is improper, the Court must 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); FED. R. CIV. P. 12(b)(3). In this case, the Court finds that in
the interest of justice, this case should be transferred to the District of Minnesota.
It is therefore ORDERED that St. Jude’s Motion for Summary Judgment of Improper
Venue, which the Court hereby considers a motion to reconsider its previous venue decisions
(Dkt. #178) is hereby GRANTED in part. The Court finds that venue is improper in the Eastern
District of Texas and this case is hereby transferred to the United States District Court for the
District of Minnesota.
SIGNED this 25th day of June, 2018.
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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