In a Multi-District State, venue proper where defendant maintains a principal place of business

In a Multi-District State, venue proper where defendant maintains a principal place of businessIn re BigCommerce, Inc., Nos. 2018-120, 2018-122, 2018 (Fed. Cir. May 15, 2018) (Before Reyna, Linn, and Hughes, J.) (Opinion for the court, Linn, J.)

Diem LLC and Express Mobile each brought patent infringement suits against BigCommerce in the Eastern District of Texas. BigCommerce moved to dismiss Diem’s case and to transfer Express Mobile’s case for lack of venue. The district court found that venue was proper in both cases. BigCommerce petitioned the Federal Circuit for a writ of mandamus, which the Court granted.

Fourco and TC Heartland settled that, for venue purposes, a domestic corporation resides only in its state of incorporation. It remained unsettled whether the corporate defendant resides in every juridical district, when its state of incorporation has multiple districts.

The Court found that a corporation resides only in one judicial district, not all dsitricts within the state where it is incorporated. First, the plain reading of “the judicial district” indicated that Congress had in mind one particular judicial district where the defendant had committed acts of infringement and had a regular and established place of business. Additionally, other venue rules promulgated near the same time as § 1400(b) included a clear statement that venue could lie in multiple districts when Congress intended that result. Although Fourco established that incorporation within the state is necessary for venue purposes and sufficient for venue in single-district cases, it did not imply that venue was proper in every district within the state.

The Court further held that venue is typically proper in the district where the principal place of business is located – usually the corporation’s headquarters. If the headquarters was merely a meeting place and not where business was directed and controlled, venue is proper in the district where the registered office is located. Here, BigCommerce was incorporated in Texas, and its registered office was in the Western District of Texas. Thus, the Eastern District of Texas was not the proper venue for the suits against BigCommerce.

Take Away

In patent infringement suits brought against a corporate defendant in a state with multiple judicial districts, venue is only proper in the single district where the defendant maintains a principal place of business. If the principal place of business is not in the state of incorporation, venue is proper in the single judicial district where the office registered in its corporate filings is located.

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Discuss this

There are currently 1 Comment comments.

  1. Paul Morgan May 27, 2018 10:40 am

    For a corporation registered in the state, how difficult is it to change its registered office to a different district in that state?