November 14, 2018

TC Heartland/Micron Free Oath from the Eastern District of New York

In In re: Oath Holdings Inc., [2018-157] (November 14, 2018), the Federal Circuit granted Oath Holdings petition for mandamus, and remanded the case with the district court with the instruction that the district court either dismiss or transfer the case.

In March 2016, Oath was sued for patent infringement in the United States District Court for the Eastern District of New York. While Oath conducts business in the State of New York, it is incorporated in Delaware, and it does not have “a regular and established place of business” in the Eastern District.

Within 21 days of the Supreme Court’s decision in TC Heartland, although it had answered the Complaint, Oath filed a motion pursuant to Rule 12(b)(3), to dismiss for improper venue. The district court found that Oath had waived the right to challenge venue. Oath petitioned for mandamus, but because the Federal Circuit in Micron said TC Heartland effected a relevant change in the law, such that failure to present the venue objection earlier did not come within the waiver rule, the Federal Circuit instructed Oath to raise the matter with the district court. Oath did, but the district court did not change its ruling, so Oath filed a second petition for mandamus.

The Federal Circuit said that given its on point ruling in Micron, its order on Oath’s first mandamus petition based directly on Micron, and the district court’s reasoning in standing by its initial conclusion, they found that the case involved the narrow and exceptional circumstance in which mandamus is important for proper judicial administration.

The Federal Circuit rejected respondent’s argument that Micron does not apply because it arose under First Circuit law, while the present case arises under Second Circuit law, concluding that issues of waiver or forfeiture of patent-venue rights under §1400(b) and §1406(a) are governed by Federal Circuit law. The Federal Circuit went on to observe that there was no Second Circuit precedent that would suggest a different result than in Micron, and thus Micron answers the entire question of waiver under Rule 12(g)(2) and (h)(1) for purposes of this case: there was no such waiver.

The Federal Circuit concluded that Oath had not waived or forfeited its venue rights. Because it was undisputed that venue was improper in the Eastern District of New York, the case may not remain there. The Federal Circuit ordered the district court to either dismiss the case or transfer the case to a “district or division in which it could have been brought.”