Tinnus Enterprises, LLC et al v. Telebrands Corporation

Filing 456

ORDER ADOPTING 359 REPORT AND RECOMMENDATIONS. The Court ADOPTS the Report and Recommendation of the United States Magistrate Judge as the findings and conclusions of this Court. All objections are OVERRULED and Defendants' Motion (Docket No. 298 ) is DENIED. Signed by Judge Robert W. Schroeder, III on 10/17/2017. (rlf)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
TINNUS ENTERPRISES, LLC,
LTD.,

ZURU

Plaintiffs,
v.
TELEBRANDS
CORPORATION,
BULBHEAD.COM, LLC,

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CIVIL ACTION NO. 6:16-CV-00033

Defendants.
ORDER ADOPTING REPORT AND
RECOMMENDATION OF MAGISTRATE JUDGE
The above entitled and numbered civil action was referred to United States Magistrate
Judge John D. Love pursuant to 28 U.S.C. § 636. On August 1, 2017, the Magistrate Judge issued
a Report and Recommendation (“R&R”), recommending that Defendants Telebrands Corp.
(“Telebrands”) and Bulbhead.com LLC’s (“Bulbhead”) (collectively “Defendants”) Motion to
dismiss or transfer this case pursuant to 28 U.S.C. § 1406 and Federal Rule of Civil Procedure
12(b)(3) be denied. Docket No. 298. Defendants filed objections to the Magistrate Judge’s R&R.
Docket No. 387. Plaintiffs Tinnus Enterprises, LLC and Zuru, Ltd. (“Plaintiffs”) have filed a
response. Docket No. 397. Having conducted a de novo review of Defendants’ written objections,
the Court concludes that the findings and conclusions of the Magistrate Judge are correct and the
objections are without merit. 28 U.S.C. § 636 (b)(1).
Defendants specifically object to the Magistrate Judge’s finding that Defendants waived
their challenge to venue in this action and that the Supreme Court’s decision in TC Heartland was
not an intervening change in law. Docket No. 387 at 3–7.

First, as to Defendants’ general objection that TC Heartland was an intervening change in
law, this Court has already held that TC Heartland was not an intervening change in the law. Elbit
Sys. Land & C4I Ltd. v. Hughes Network Sys., LLC, No. 2:15-cv-00037, 2017 WL 2651618, at
*20 (E.D. Tex. June 20, 2017) report and recommendation adopted by Doc. No. 430 (July 19,
2017) (“The Court need not reach Defendants’ argument that a change in law constitutes an
exception to waiver under Rule 12(h)(1)(A) because the Supreme Court’s decision in TC
Heartland does not qualify”). Other courts have held the same. See In re Hughes Network Sys.,
LLC, No. 2017-130, 2017 WL 3167522, at *1 (Fed. Cir. July 24, 2017) (petition for writ of
mandamus denied); Navico, Inc. v. Garmin Int’l, Inc., No. 2:16-CV-190, 2017 WL 2957882, at *2
(E.D. Tex. July 11, 2017) (“[B]ecause TC Heartland does not qualify as an intervening change of
law, this waiver is not excused.”); Orthosie Sys., LLC v. Synovia Solutions, LLC, No. 4:16-CV00995, 2017 WL 3244244, at *3 (E.D. Tex. July 31, 2017); iLife Techs. Inc. v. Nintendo of
America, Inc., No. 3:13-cv-4987, 2017 WL 2778006, at *7 (N.D. Tex. June 27, 2017) (“TC
Heartland does not qualify as an intervening change in law.”); In re Nintendo of America Inc., No.
2017-127, Slip. Op., Doc. No. 30, at 3 (Fed. Cir. July 26, 2017) (petition for writ of mandamus
denied); Cobalt Boats, LLC v. Sea Ray Boats, Inc., No. 2:15-CV-21, 2017 WL 2556679, at *3
(E.D. Va. June 7, 2017) (“TC Heartland does not qualify for the intervening law exception to
waiver because it merely affirms the viability of Fourco.”); In re Sea Ray Boats, Inc., Case No.
2017-124, Dkt. 15, Slip Op. at 2 (Fed. Cir. June 9, 2017) (petition for writ of mandamus denied);
Chamberlain Group, Inc. v. Techtronic Indus. Co., No. 16 C 6097, 2017 WL 3205772, at *2 (N.D.
Ill. June 28, 2017) (“the Court follows Elbit and Cobalt Boats . . . in finding that TC Heartland did
not represent a change in the law that would excuse waiver under these circumstances.”); In re
Techtronic Indus. North America, Inc. et al., No. 2017-125, Slip. Op., Doc. No. 25, at 3 (Fed. Cir.

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July 25, 2017) (petition for writ of mandamus denied); Mantissa Corp. v. Ondot Sys., Inc., No.
4:15-cv-113, Slip. Op., Doc. No. 113, at 6 (S.D. Tex. July 26, 2017); Skyhawke Techs., LLC v.
DECA Int’l Corp. et al., No. 3:10-CV-708T-SL-RHW, 2017 WL 3132066, at *2 (S.D. Miss. July
21, 2017); Koninklijke Philips v. ASUSTeK Computer Inc., No. 1:15-cv-1125-GMS, Slip. Op.,
Doc. No. 215, at 10 (D. Del. July 19, 2017); Fox Factory, Inc., v. SRAM, LLC, No. 3:16-cv-506WHO, Slip. Op., Doc. No. 72, at 5 (N.D. Cal. July 18, 2017); Reebok Int’l Ltd., et al. v. TRB
Acquisitions LLC, et al., No. 3:16-CV-1618-SI, 2017 WL 3016034, at *3 (D. Or. July 14, 2017)
(“the defense of improper venue was not ‘unavailable’ to Defendants before the Supreme Court
issued its decision in TC Heartland.”); Infogation Corp. v. HTC Corp., No. 16-CV-01902-H-JLB,
2017 WL 2869717, at *4 (S.D. Cal. July 5, 2017) (“[T]he Supreme Court’s decision in TC
Heartland does not excuse Defendants’ waiver as to venue in this District.”); Amax, Inc. v. ACCO
Brands Corp., No. CV 16-10695-NMG, 2017 WL 2818986, at *2 (D. Mass. June 29, 2017)
(“defendant’s contention that an objection to improper venue under 28 U.S.C. § 1400(b) was
previously unavailable is incorrect.”); Crest Audio, Inc. v. QSC Audio Prods. LLC, No. 3:12-cv755, Slip. Op. (N.D. Miss. August 7, 2017) (same); Jarratt v. Amazon.com, Inc., No. 5:16-CV05302, 2017 WL 3437782, at *1 (W.D. Ark. Aug. 10, 2017) (“TC Heartland…merely reiterates
Supreme Court precedent from Fourco . . . which was erroneously rejected by the Federal
Circuit.”). Therefore, Defendants’ general objection is OVERRULED.
Regarding the Magistrate Judge’s finding of waiver, Defendants object because they
contend that they filed the instant motion five months before trial. Docket No. 387 at 7. The
Magistrate Judge found that during the time period in which Telebrands had repeatedly admitted
venue was proper in this District, the Court had conducted lengthy injunction proceedings,
resolved several discovery disputes, and completed claim construction. Docket No. 359 at 8. The

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Court agrees that this continuous conduct without any objection to venue constitutes waiver. See
Koninklijke Philips v. ASUSTeK Computer Inc., No. 1:15-cv-1125-GMS, at *8 (D. Del. July 19,
2017) (finding defendants’ conduct waived any venue defense where defendants “(1) participated
in a scheduling conference; (2) conducted discovery, (3) entered into a stipulation and protective
order with the plaintiff; and (4) moved the court to allow their out of state counsel to appear pro
hac vice.”); Infogation Corp. v. HTC Corp., No. 16-CV-01902-H-JLB, 2017 WL 2869717, at *3
(S.D. Cal. July 5, 2017) (finding defendants waived any challenge to venue through litigation
conduct by participating in litigation for “approximately a year, including by serving invalidity
contentions, filing two motions to stay, filing a motion for judgment on the pleadings, and
participating in claim construction.”). Moreover, even if Defendants are correct that the defense
was not available to them at those times, the Magistrate Judge further found that after filing its
motion to dismiss, Telebrands continued to seek affirmative relief from the Court. See Docket No.
359 at 8, citing Docket No. 324.
Defendants additionally object to the Magistrate Judge’s reliance on the filing of
affirmative counterclaims to support a finding of waiver. Docket No. 387 at 8. Defendants cite an
alleged contradictory decision from the Magistrate Judge in Blue Spike, LLC v. Contixo Inc., No.
6:16cv1220, 2017 WL 3172425, at *2 (E.D. Tex. July 27, 2017). Defendants are incorrect in citing
Blue Spike as contradictory and in applying the Court’s findings therein. In Blue Spike, the Court
found that, as a general matter, counterclaims alone are likely insufficient to constitute waiver
where “a party has otherwise preserved its venue objection.” Id. Indeed, in that case, Visual Land,
Inc. had denied venue was proper in its initial answer while filing counterclaims. Id. at *1. Here,
as the Magistrate Judge explained, Telebrands repeatedly admitted venue was proper while
asserting affirmative counterclaims. Docket No. 359 at 7, citing Docket Nos. 26, 139, 145

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(“Telebrands waived its venue defense in its multiple answers to Plaintiffs’ complaint by
repeatedly admitting that “venue is proper in this Judicial District. . . .” and “further waived its
venue defense by filing affirmative counterclaims without objecting to venue.”) (emphasis added).
While Defendants cite to Bayou Steel, that case dealt with waiver of personal jurisdiction, and the
Fifth Circuit expressly drew a distinction in finding the matter distinguishable from Rubens v.
Ellis, 202 F.2d 415 (5th Cir. 1953), which dealt with the issue of venue waiver where no objection
was raised. See Bayou Steel Corp. v. M/V Amstelvoorn, 809 F.2d 1147, 1149 (5th Cir. 1987)
(finding that Appellants’ “reliance on Rubens . . . is misplaced” because it did not “involve[]
personal jurisdiction.”). Here, Rubens is still applicable where the defense was “waived, not only
by [defendant’s] failure to object, but also because [defendant] affirmatively, by counter-claim,
sought the aid of the [] court.” Rubens v. Ellis, 202 F.2d 415, 417 (5th Cir. 1953). For these
.
reasons, the Court OVERRULES Defendants’ objection based on the Magistrate Judge’s finding
of waiver.
Defendants raise no other objections to the findings and conclusions of the Magistrate
Judge. Any objections to those findings and conclusions are therefore waived and not considered
herein on de novo review. The Court ADOPTS the Report and Recommendation of the United
States Magistrate Judge as the findings and conclusions of this Court.

All objections are

OVERRULED and Defendants’ Motion (Docket No. 298) is DENIED.
SIGNED this 17th day of October, 2017.

____________________________________
ROBERT W. SCHROEDER III
UNITED STATES DISTRICT JUDGE

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