A “Regular and Established Place of Business” Under the Patent Venue Statute Requires the Presence of an Employee or Agent Conducting Defendant’s Business
Before Dyk, Wallach, and Taranto. On Petition for Writ of Mandamus to the District Court for the Eastern District of Texas.
Summary: A defendant does not have a “regular and established place of business” for the purpose of establishing venue under 28 U.S.C. § 1400(b) if it has no employee or agent regularly conducting its business in the district.
Super Interconnect Technologies sued Google in the Eastern District of Texas for patent infringement. Google moved to dismiss or transfer the suit, arguing that venue was improper. The district court denied the motion, opining that the presence of several Google servers in the district constitutes a “regular and established place of business” under the patent venue statute, 28 U.S.C. § 1400(b). Google petitioned the Federal Circuit for a writ of mandamus.
The Federal Circuit granted Google’s petition. The court noted that it previously denied mandamus in a similar case involving Google but concluded that mandamus is now appropriate to resolve inconsistencies that have since arisen in the district courts’ application of In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017). In re Cray identifies three general factors to show that a defendant has a “regular and established place of business” under the patent venue statute.
The Federal Circuit found that Google’s servers constitute a “place” under the first Cray factor, but not a “place of business” under the second Cray factor. The court agreed with Google that the second Cray factor requires an employee or agent to be present in the district. Relying on the historical relationship between the statutory provisions governing venue and service, the court concluded that, where a defendant has a “regular and established place of business” for venue purposes, there must also be an “agent . . . engaged in conducting such business” who can accept service. The court rejected the argument that Internet service providers (“ISPs”) that hosted Google’s servers could be considered agents conducting Google’s business. The court reasoned that, while the ISPs have an obligation to perform on-site maintenance of servers that suggests an agency relationship, such maintenance activities are “meaningfully different from” and “only ancillary to” Google’s business.
Judge Wallach joined the majority’s order and issued a separate, concurring opinion, in which he raised the possibility that Google’s end users located in the district could be considered Google’s agents “by virtue of voluntarily or involuntarily sharing information generated on Google’s servers.”
Editor: Paul Stewart