United States: Unreasonable Delay In Filing Patent Infringement Litigation May Prevent Suit In A District Where Defendants Have Ceased To Have A Physical Presence

Abstract

Defendants may try to avoid being sued for patent infringement in a district by closing their offices in that district so they have no physical presence there and venue is improper. In determining whether such a district is an appropriate venue for patent infringement litigation, courts may consider whether the alleged infringement occurred in the district and whether suit was filed within a reasonable time. Thus, a patent owner who unreasonably delays in filing a patent infringement suit may lose the ability to sue a defendant in a district where the defendant had a physical presence at the time of infringement, but no longer has a physical presence. 

Background

ParkerVision sued nine defendants for patent infringement in December of 2015 and amended its complaint two days later. As the case progressed, ParkerVision dismissed its claims against seven of the defendants, and the two remaining defendants (Apple and Qualcomm) challenged venue, Apple through a motion to dismiss for improper venue and Qualcomm through a motion to transfer to the Southern District of California.

When the magistrate judge presiding over the motions recommended the judge deny those motions, Qualcomm objected, contending the magistrate erred in denying the transfer because Qualcomm had no regular and established place of business in the district when the suit was filed, and because the magistrate gave too much weight to ParkerVision's choice of forum.

After de novo review, the Court adopted the magistrate's recommendations not to transfer the case.

The ParkerVision Decision

The parties agreed that Qualcomm did not "reside" in Florida under the TC Heartland  test because it was a Delaware corporation with its principal place of business in California. Therefore, the Court focused its analysis on a second basis for venue in Florida—a defendant with a "regular and established place of business" that is a physical place in the district.

Closing an Office Prior to the Lawsuit

Prior to the filing the complaint, Qualcomm maintained offices in Florida. But it closed one of the offices in 2014 and the other in November of 2015.  So Qualcomm argued Florida was an improper venue for litigation because Qualcomm had no physical place of business in Florida at the time of the complaint.

The Federal Circuit had not recently addressed whether an office that was closed prior to the filing of the complaint constitutes a "regular and established place of business" sufficient to satisfy the venue statute, so the Court looked at precedent from other courts and districts. It concluded that venue is proper if a defendant had a regular and established place of business at the time the cause of action accrued, and a lawsuit was subsequently filed within a reasonable time. While another case found a 21-month delay in filing suit to be unreasonable, in this case, ParkerVision sued Qualcomm within weeks of Qualcomm closing its doors, which the Court found to be reasonable.

Location of Alleged Acts of Infringement

Next the Court analyzed whether ParkerVision alleged acts of infringement in the district sufficient to establish venue in the district under § 1400(b). In its complaint, ParkerVision claimed "Qualcomm directly or through its subsidiaries or intermediaries makes, uses, offers for sale, sells, imports, advertises, makes available, and/or markets products in the United States, the State of Florida, and the Middle District of Florida that infringe one or more claims" of the asserted patents. Qualcomm submitted an affidavit from its senior legal counsel stating that the basis for the alleged infringement occurred either in the Southern District of California or overseas. The Court found that Qualcomm's affidavit did not override the allegations in the complaint and adopted the magistrate's finding that ParkerVision's allegations satisfy the "acts of infringement" requirement of § 1400(b).

Convenience of the Witness

Transfer under § 1404(a) is based on convenience of the witnesses and in the interest of justice. The magistrate denied the motion to transfer the litigation from Florida, noting that it was ParkerVision's chosen forum because it had previously sued Qualcomm in the Middle District of Florida, ParkerVision resided there, and the inventions claimed in the asserted patents were conceived and reduced to practice in that district. The magistrate also commented on the financial resources of the parties, noting Qualcomm's ability to compel its employees to travel to the Middle District of Florida if necessary. 

Qualcomm argued that the magistrate placed too much weight on such factors. But the Court disagreed and denied the motion to transfer, finding that the parties were in equal footing regarding the convenience of the witnesses and transferring the case would merely shift the burden from ParkerVision to Qualcomm.

Strategy and Conclusion

Defendants may try to avoid being sued for patent infringement in a district by closing their offices in that district so they have no physical presence there and venue is improper. A patent owner who unreasonably delays in filing a patent infringement suit may lose the ability to sue a defendant for patent infringement in a district where a defendant had a physical presence at the time of infringement, but no longer has a physical presence. No hard-and-fast rule has been set by the courts and the question of reasonableness may depend on the specific facts of the case. However, at least one court has found that a delay of 21 months was not reasonable, and another found that a delay of a few weeks was reasonable.

Further Information
The ParkerVision  opinion can be found  here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
13 Dec 2018, Speaking Engagement, Washington, DC, United States

Finnegan is a sponsor of the Silicon Valley Intellectual Property Law Association’s Inventor of the Year presentation and program “Subject Matter Eligibility—Alice, Berkheimer, Iancu—Where are we now?

2 Jan 2019, Conference, Washington, DC, United States

Finnegan is a Silver sponsor of the 36th annual National CLE Conference. Finnegan partner Erika Arner will co-present “The Interplay Between IPRs and Other PTAB Trial Proceedings and Litigation—Strategy and Lessons.

6 Jan 2019, Webinar, Washington, DC, United States

As part of Strafford Publications’ webinar series, Finnegan attorneys Virginia Carron and Jessica Marks will consider patent eligibility issues with engineered natural products.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions