Columbia Sportswear N. Am., Inc. v. Seirus Innovative Accessories, Inc.

• Decision Date: 05 September 2017
• Docket Number: No. 3:15–cv–00064–HZ,3:15–cv–00064–HZ
• Citation: 265 F.Supp.3d 1196
• Parties: COLUMBIA SPORTSWEAR NORTH AMERICA, INC., an Oregon Corporation, Plaintiff, v. SEIRUS INNOVATIVE ACCESSORIES, INC., a Utah Corporation, Defendant.
• Court: U.S. District Court — District of Oregon

265 F.Supp.3d 1196

COLUMBIA SPORTSWEAR NORTH AMERICA, INC., an Oregon Corporation, Plaintiff,

v.SEIRUS INNOVATIVE ACCESSORIES, INC., a Utah Corporation, Defendant.

No. 3:15–cv–00064–HZ

United States District Court, D. Oregon.

Signed September 5, 2017

David W. AxelrodScott D. EadsNicholas F. Aldrich, Jr. Schwabe, Williamson & Wyatt, P.C. 1211 SW 5th Ave., Ste. 1600 Portland, OR 97204, for Plaintiff.

Renée E. Rothauge Markowitz Herbold P.C. 1211 SW Fifth Ave., Suite 3000 Portland, OR 97204 Christopher S. MarcheseSeth M. Sproul Garrett K. Sakimae Tucker N. Terhufen Fish & Richardson P.C. 12390 El Camino Real San Diego, CA 92130 Matthew D. Murphey Troutman Sanders LLP 5 Park Plaza, Suite 1400 Irvine, CA 92614, for Defendant.

OPINION & ORDER

MARCO A. HERNÁNDEZ, United States District Judge

Before the Court is Defendant's motion to dismiss or transfer venue to the Southern District of California. Defendant argues that venue is improper in this District under the Supreme Court's recent decision in TC Heartland LLC v. Kraft Foods Group Brands LLC , ––– U.S. ––––, 137 S.Ct. 1514, 197 L.Ed.2d 816 (2017). Because TC Heartland constitutes an intervening change in law, the motion is granted and the Court orders that this case be transferred to the Southern District of California.

BACKGROUND

I. Procedural Background

Plaintiff filed its Complaint in the District of Oregon on January 1, 2015. See Compl. ECF 1. Plaintiff is an Oregon corporation with its principal place of business in Oregon. Defendant is a Utah corporation with its principal place of business in San Diego, California. On February 27, 2015, Defendant filed its first motion to dismiss or transfer venue. See First Mot. to Dismiss, ECF 15. Specifically, Defendant moved under Rule 12(b)(3) to dismiss for lack of personal jurisdiction. Defendant asserted that venue was improper because Oregon did not have personal jurisdiction over it, therefore Defendant did not "reside" in Oregon under 28 U.S.C. § 1391(c). Def.'s Mem. Supp. First Mot. to Dismiss 10–16, ECF 16. Additionally, Defendant argued that the convenience factors provided in 28 U.S.C. § 1404(a) favored transfer to the Southern District of California. The Court denied the motion, holding that it had "personal jurisdiction over Seirus because it intentionally targeted the forum by selling allegedly infringing products directly to Oregon retailers." Op. & Order 2, June 29, 2015, ECF 33. The Court also found that the parties split the multi-factor analysis under § 1404(a) and it deferred to Plaintiff's choice of venue. Id.

To date, the parties have litigated this case up to trial. The Court engaged in claim construction and held a Markman hearing. The Court also granted the parties' joint motion for judgment declaring Plaintiff's Design Patent valid. Before the close of discovery, the Court granted Plaintiff's motion for partial summary judgment that Defendant infringed its Design Patent. Additionally, the Court ruled on separate fully briefed cross-motions for partial summary judgment regarding Plaintiff's Utility Patents and other issues remaining in this case. See Op. & Order, Apr. 12, 2017, ECF 159. Defendant filed its second motion to dismiss or transfer venue on June 14, 2017. A ten-day jury trial is set to begin on September 19, 2017, and the Court has received voluminous pre-trial filings.

II. Legal Background

Defendant's motion arises from the Supreme Court and Federal Circuit's differing interpretations of the relationship between two venue statutes. Venue in general is governed by 28 U.S.C. § 1391(c). Venue in patent cases is governed by 28 U.S.C. § 1400(b), which provides: "Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business." In 1957, the Supreme Court analyzed the relationship between the two provisions in Fourco Glass Co. v. Transmirra Prods. Corp. , 353 U.S. 222, 77 S.Ct. 787, 1 L.Ed.2d 786 (1957). When Fourco was decided, § 1391(c) had been amended to read: "A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes." Id. at 223, 77 S.Ct. 787. The Supreme Court considered whether the general venue provision should be read into § 1400(b), expanding the definition of where a domestic corporation "resides" for venue purposes. Section 1400(b) provided that a corporation "resides" only in the state in which it is incorporated; § 1391(c), by contrast, used the definition of corporate residence to mean that a defendant could be sued where it was doing business, or in other words, where the court had personal jurisdiction over it.

In Fourco , the Supreme Court looked to its prior decision in Stonite Prods. Co. v. Melvin Lloyd Co. , 315 U.S. 561, 62 S.Ct. 780, 86 L.Ed. 1026 (1942), which presented a legally indistinguishable question about whether the general venue statute applied to patent infringement litigation. In Stonite , the Court found that the precursor to § 1400(b) was the "exclusive provision controlling venue in patent infringement proceedings." Id. at 561, 62 S.Ct. 780. The Stonite Court explained that Congress did not intend § 1400(b)'s predecessor "to dovetail with the general provisions relating to venue of civil suits, but rather that it alone should control venue in patent infringement cases." Id. at 555–56, 62 S.Ct. 780. Relying on Stonite , the Court in Fourco held that " § 1400(b) is the sole and exclusive provision controlling venue in patent infringement actions, and it is not to be supplemented by the provisions of 28 U.S.C. § 1391(c)." 353 U.S. at 229, 77 S.Ct. 787. The Supreme Court found that the Reviser's Note did not clearly express any substantive change to § 1400(b), therefore none would be presumed and § 1391(c)'s amendment to purportedly apply to "all cases" did not include patent cases. Id. at 227–28, 77 S.Ct. 787.

Section 1400(b) has not been amended since Fourco was decided; but in 1988, Congress amended § 1391(c). The 1988 amendment changed § 1391(c) to read as follows: "For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." Judicial Improvements and Access to Justice Act, Pub. L. No. 100–702, tit. X, § 1013(a), 102 Stat. 4642, 4669 (1988). In VE Holding Corp. v. Johnson Gas Appliance Co. , the Federal Circuit considered whether the 1988 amendment to § 1391(c) applied to § 1400(b). 917 F.2d 1574 (1990). The Federal Circuit found that by including the phrase "under this chapter," Congress intended § 1391(c)'s amendment to apply to all of chapter 87 of title 28, which included § 1400(b). Id. at 1575 ("We hold that Congress by its 1988 amendment of 28 U.S.C. § 1391(c) meant what it said; the meaning of the term ‘resides’ in § 1400(b) has changed.").

The Federal Circuit squared its decision with Fourco and Stonite by reasoning that the version of § 1391(c) as it was in Fourco no longer existed and that Congress could have excepted § 1400(b) from the 1988 amendment but chose not to. The Federal Circuit explained that the plain meaning of the statute and the Supreme Court's willingness to read another provision into § 1400(b) in a different case indicated that Congress meant § 1391(c) and § 1400(b) to be read together. Id. at 1579–80. For the next twenty-seven years, venue in patent cases incorporated § 1391(c) into § 1400(b).

On May 22, 2017, the Supreme Court decided TC Heartland , reaffirming Fourco 's central holding that: "[T]he amendments to § 1391 did not modify the meaning of § 1400(b) as interpreted by Fourco .... [A] domestic corporation ‘resides’ only in the State of incorporation for purposes of the patent venue statute." 137 S.Ct. at 1517. In 2011, Congress amended § 1391(c) to read: "That ‘[f]or all venue purposes,’ a corporation ‘shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question." Id. (quoting 28 U.S.C. §§ 1391(a), (c) ). The Court found that "the current version of § 1391 does not contain any indication that Congress intended to alter the meaning of § 1400(b) as interpreted by Fourco. " Id. at 1520. The Court concluded as follows:

Finally, there is no indication that Congress in 2011 ratified the Federal Circuit's decision in VE Holding. If anything, the 2011 amendments undermine that decision's rationale. As petitioner points out, VE Holding relied heavily—indeed, almost exclusively—on Congress' decision in 1988 to replace "for venue purposes" with "[f]or purposes of venue under this chapter " (emphasis added) in § 1391(c). Congress deleted "under this chapter" in 2011 and worded the current version of § 1391(c) almost identically to the original version of the statute. Compare § 1391(c) (2012 ed.) ("[f]or all venue purposes") with § 1391(c) (1952 ed.) ("for venue purposes"). In short, nothing in the text suggests congressional approval of VE Holding.

Id. at 1521. In sum, TC Heartland reaffirmed that for venue purposes in patent cases, a domestic corporation "resides" only in its state of incorporation.

STANDARDS

Pursuant to Rule 12(b)(3), a party may move to dismiss an action for improper venue. If venue is improper, the district court shall dismiss the case "or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a). The plaintiff bears the burden of showing that venue is proper. Piedmont Label Co. v. Sun Garden Packing Co. , 598 F.2d 491, 496 (9th Cir. 1979). Venue is a waivable defense. Leroy v. Great W. United Corp. , 443 U.S. 173, 180, 99 S.Ct. 2710, 61...