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In Re Oath Holdings Inc.

| Douglas B. WentzelNicole R. Townes
Federal Circuit Summary
 

Before Dyk, Reyna, and Taranto, per curiam.  Petition for Writ of Mandamus from the District Court for the Eastern District of New York.

Summary: In a case pending before TC Heartland was decided, a venue challenge based on TC Heartland’s interpretation of the venue statute is not waived as it was not “available” and can be successfully raised later in the litigation if the defendant did not delay in raising the venue challenge once it became available.

Oath was sued for patent infringement in the Eastern District of New York.  Oath moved to dismiss for failure to state a claim but did not object to venue.  Oath later withdrew its motion and answered the complaint.  In its answer, Oath admitted the complaint’s venue allegations but “reserve[d] the right to challenge venue based upon any change in law, including the Supreme Court’s upcoming decision in TC Heartland. . . .”  Within 21 days of the TC Heartland decision, Oath moved to dismiss for improper venue because it was not incorporated in New York and undisputedly lacked a regular and established place of business in the Eastern District of New York.  According to the district court, however, this venue defense was “available” at the time of Oath’s initial motion to dismiss, and thus, the venue defense was waived for not being included in that motion.

Oath subsequently petitioned for a writ of mandamus directing the district court to grant the motion to dismiss for improper venue.  While the petition was pending, the Federal Circuit decided In re Micron Tech., Inc.  In Micron, the court held that venue challenges based on TC Heartland’s interpretation of the venue statute were not “available”—and could not be waived—prior to TC Heartland.  The Federal Circuit denied Oath’s petition, but instructed Oath to move the district court for reconsideration of its venue decision in light of the holding in Micron.  Oath did so, but the district court failed to follow Micron and again denied Oath’s venue motion on the grounds that the venue challenge was waived.  Subsequently, Oath again petitioned for a writ of mandamus.

The Federal Circuit granted Oath’s petition, vacated the district court’s decision, and remanded to have the case dismissed or transferred to an appropriate venue.  The Court held that Oath’s venue challenge was clearly not waived in light of its holding in Micron, and that the district court’s error in not following Micron warranted mandamus relief.  The Court found no grounds to deny this relief because Oath’s venue challenge was not a strategic “wait-and-see” tactic that could result in forfeit of a venue challenge based on delay once the challenge becomes available under 28 U.S.C. § 1406(b), and Oath had expressly reserved the right to challenge venue based on the eventual decision in TC Heartland.

This case is: IN RE OATH HOLDINGS INC.

Editor: Paul Stewart