Google Gets Out Of Texas In Its First Post-TC Heartland Transfer

A patent infringement suit brought against Google by Personal Audio, LLC has been transferred from the Eastern District of Texas (1:15-cv-00350) to the District of Delaware (1:17-cv-01751) due to improper venue. This appears to be the first time that a court has transferred a case against Google for that reason since the US Supreme Court issued its May 22 opinion in TC Heartland, which held that the narrower patent venue statute (28 USC Section 1400(b)), not the general venue statute (28 USC Section 1391), governs in infringement suits. In addition to the issue of venue propriety itself, the court also ruled on two other, threshold issues related to venue that had not been previously addressed by TC Heartland or subsequent cases: that the burden of proof for venue challenges falls on the plaintiff, under prior precedent for the patent venue statute; and that venue in patent suits should be analyzed based on facts and circumstances existing at the time a suit is filed, in light of the text of the statute.

The court began its analysis, issued in a December 1 order, by quoting the Federal Circuit's holding from In re Cray, which established three general requirements for assessing whether a defendant has a "regular and established place of business" in a district: "(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant". Judge Clark then noted that neither Cray nor TC Heartland had provided guidance on two threshold issues for determining proper venue under Section 1400(b): which party has the burden of proof, and "the date or time at which the defendant must have had a regular and established place of business".

The court addressed the first of those issues by reviewing prior case law, noting that while there had not been a Federal Circuit opinion on the burden of proof for improper venue challenges brought by corporate defendants under 1400(b), circuit court opinions from before the Federal Circuit was formed "are considered persuasive". Judge Clark then highlighted the Seventh Circuit's 1969 holding in Grantham v. Challenge-Cook Brothers, in which the court "put the burden on Plaintiff to establish proper venue" and "emphasized that the patent venue statute 'should not be liberally construed in favor of venue'". The court had "located no compelling authority suggesting that it should ignore the reasoning of Grantham" and deemed it...