In Andra Group, LP v. Victoria’s Secret Stores, LLC, [2020-2009] (August 3, 2021), the Federal Circuit affirmed the dismissal of three defendants for improper venue pursuant to 28 U.S.C. § 1400(b).
Andra sued for infringement of U.S. Patent No. 8,078,498 directed to displaying articles on a webpage, including applying distinctive characteristics to thumbnails and displaying those thumbnails in a “master display field.”
Defendants argued that venue was improper because Victoria’s Secret Stores did not commit acts of infringement in the District, and the related defendants did not have regular and established places of business in the District.
The Federal Circuit noted that because each defendant is incorporated in Delaware, no defendant “resides” in Texas for the purpose of patent venue. Thus, to establish venue in this case, Andra must show that each Defendant committed acts of infringement and maintains a regular and established place of business in the Eastern District of Texas.
While Victoria’s Secret Stores did have a place of business in the District, the other defendants did not. Andra argued, however, that Victoria’s Secret Stores’ locations are “a regular and established place of business” of the related entities because Victoria’s Secret Stores’ employees are agents of the related defendants, or, alternatively, because the related defendants have ratified Victoria’s Secret Stores locations as their places of business.
The Federal Circuit examined the relationship between Victoria’s Secret Stores and the related entities, and agreed that none of the facts alleged by Andra are sufficient to prove that Stores employees are agents of the other defendants. On Andra’s ratification theory, the Federal Circuit noted that “where related companies have maintained corporate separateness, the place of business of one corporation is not imputed to the other for venue purposes. The Federal Circuit further noted that the fact that the entities work together in some aspects, is insufficient to show ratification.
Giving reasoned consideration to all relevant factors or attributes of the relationship between Victoria’s Secret Stores and the related defendants, the Federal Circuit concluded that Andra has not met its burden to show related entities have ratified Victoria’s Secret Stores locations as their own places of business such that they may be said to maintain a regular and established place of business in the District.
The Federal Circuit thus affirmed the dismissal of the related entities who did not maintain employees or agents in the District and had not ratified the locations of a related entity as their own.