United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
Honorable David C. Nye United States District Judge.
CAO Lighting, Inc. (“CAO”) claims that Defendant
Light Efficient Design is infringing on one of its patents by
“making, using, selling, and/or offering to sell LED
retrofit lighting devices.” Dkt. 1, ¶ 25. CAO also
claims that Defendant Electric Wholesale Supply Company, Inc.
(“EWS”) is infringing on one of its patents by
distributing Light Efficient Design's infringing
products. Id. ¶¶ 17, 25. Defendants now
ask this Court to sever the claims against each Defendant,
transfer the claim against Light Efficient design to the
Northern District of Illinois, and stay the claim against EWS
in this District until the suit against Light Efficient
Design is complete. For the reasons set forth below, the
Court GRANTS the Motion.
a Utah corporation. Light Efficient Design is a limited
liability company that is organized under the laws of the
State of Illinois and has its principal place of business in
Cary, Illinois. EWS is incorporated in Idaho and has its
principal place of business in Idaho Falls, Idaho. EWS
distributes, among other things, Light Efficient Design's
products in Idaho.
United States Patent and Trademark office issued Patent 6,
465, 961 (“the ‘961 Patent”) to CAO on
October 15, 2002. On October 28, 2016, CAO filed this lawsuit
in the District of Idaho, asserting one claim of patent
infringement against Defendants. In its Complaint, CAO
included screenshots of products (lightbulbs) that Defendants
have displayed or offered for sale on their respective
websites and that CAO claims are infringing on the ‘961
Patent. CAO seeks both an injunction against Defendants and
filed an Answer to the Complaint on December 9, 2016. Dkt. 9.
On January 19, 2017, Judge B. Lynn Winmill filed a case
management order setting the discovery deadline for October
16, 2017, and the dispositive motion deadline for March 19,
2018. Dkt. 21. The discovery deadline was contingent upon the
Court holding a Markman hearing in August of 2017
and issuing a Markman order by September 14, 2017.
Dkts. 19-21. However, on July 14, 2017, Defendants filed the
instant Motion to Sever, Stay, and Transfer. Dkt. 28. Due to
extensions of time this Court granted in the briefing
schedule, this Motion became ripe on September 15, 2017.
Moreover, on August 2, 2017, Judge Winmill transferred this
case to the undersigned. Accordingly, in the interest of
justice, the Court vacated all case management deadlines and
rescheduled the Markman hearing for November 9,
2017. However, this hearing will not be necessary in light of
the Court's decision in the instant motion.
argue that the Court must transfer the claims against Light
Efficient Design because the District of Idaho is the
improper venue as to that Defendant. In response, CAO asserts
that (1) venue is proper and (2) regardless of whether venue
is proper, Defendants waived any challenge to venue. This
Court first addresses the merits of the request to transfer
and then addresses whether Defendants waived their right to
Whether Venue is Proper
to 28 U.S.C. § 1406(a), if a case is filed in an
improper venue, the district court “shall 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.” Venue in this case is governed by 28 U.S.C.
§ 1400(b), “the exclusive statutory provision
controlling venue in patent infringement proceedings.”
TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137
S.Ct. 1514, 1518 (2017) (citation omitted). The patent venue
statute provides: “Any civil action for patent
infringement may be brought in [(1)] the judicial district
where the defendant resides, or [(2)] where the defendant has
committed acts of infringement and has a regular and
established place of business.” 28 U.S.C.A. §
1400(b). Thus, there are two different means of establishing
proper venue under § 1400(b).
first means does not apply in this case. The Supreme Court
recently clarified that “a domestic corporation
‘resides' only in its State of incorporation for
purposes of the patent venue statute.” TC
Heartland, 137 S.Ct. at 1517. It is undisputed that
TADD, doing business as Light Efficient Design, is
incorporated in Illinois. Therefore, TADD does not reside in
Idaho for the purposes of the patent venue statute.
second method is not as obvious. Under this method, CAO has
the burden of showing: (a) that Light Efficient Design
“has a regular and established place of business”
in Idaho; and (b) that Light Efficient Design “has
committed acts of infringement” in Idaho. 28 U.S.C.A.
§ 1400(b). The parties do not dispute that CAO has
alleged that Light Efficient Design has committed acts of
infringement in Idaho. Therefore, the Court need only address
whether Light Efficient Design has a regular and established
place of business in Idaho.
Federal Circuit recently explained that “the regular
and established place of business standard requires more than
the minimum contacts necessary for establishing personal
jurisdiction or for satisfying the doing business standard of
the general venue provision.” In re Cray Inc.,
___ F.3d ___, No. 2017-129, 2017 WL 4201535, at *5 (Fed. Cir.
Sept. 21, 2017). Rather, this standard has three general
requirements: “(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.” Id. at 4.
there “must be a physical place in the district.”
Id. at 5. “While the ‘place' need
not be a ‘fixed physical presence in the sense of a
formal office or store, ' there must still be a physical,
geographical location in the district from which the business
of the defendant is carried out.” Id.
(internal citation omitted).
the place “must be a regular and
established place of business.” Id.
(emphasis added). “A business may be ‘regular,
' for example, if it operates in a ‘steady[, ]
uniform[, ] orderly [, and] methodical' manner.”
Id. (citation omitted). A business may be
established if it is “settle[d] certainly, or fix[ed]
permanently.” Id. at 6 (quoting Black's
Law Dictionary (1st ed. 1891)). “[A] business can