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IP Alert: Corporate Defendant "Resides" in Only One District in States Having Multiple Judicial Districts Under Section 1400(b)

May 15, 2018

Today, in In re: BigCommerce, Inc., a Federal Circuit panel held that “for purposes of determining venue under § 1400(b) in a state having multiple judicial districts, a corporate defendant shall be considered to ‘reside’ only in the single judicial district within that state where it maintains a principal place of business, or, failing that, the judicial district in which its registered office is located.”

BigCommerce was sued for patent infringement in the Eastern District of Texas in two separate lawsuits, one initiated by Diem LLC and another by Express Mobile, Inc. In the Diem case, BigCommerce moved to dismiss under the TC Heartland case on the basis that BigCommerce only resides in the Western District of Texas. The magistrate judge concluded that the objection had been waived. In adopting the magistrate’s recommendation, the district court determined that even if the defense had not been waived, venue would still be proper in the Eastern District of Texas.

BigCommerce's petition for a writ of mandamus was granted by the Federal Circuit, which found that the question presented was “basic” and will inevitably be repeated. 

Section 1400(b) states as follows: “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.” At issue before the Federal Circuit was the first prong, relating to where the defendant “resides” for purposes of this statute. Applying statutory construction, the Federal Circuit found that a corporate defendant resides in only one district in those states with multiple judicial districts. BigCommerce has no place of business in the Eastern District of Texas. Instead, its registered office and its principal place of business are within the Western District of Texas. Accordingly, the Federal Circuit found that venue was improper in the Eastern District of Texas.

The Federal Circuit opinion provides guidance on how to determine where a corporate defendant resides under the first prong of section 1400(b):

  • For a corporate defendant that does not maintain its principal place of business within the state in which it is incorporated, “then the natural default is to deem it reside in the district in which its registered office, as recorded in its corporate filings, is located.”
  • For a corporate defendant that maintains its principal place of business within the state in which it is incorporated, the principal place of business can be identified by, for example, where its books are kept and its corporate business is transacted—the place where a corporation’s officers direct, control, and coordinate the corporation’s activities. This is different from the “regular and established place of business” part of the second prong of the statute.

In re: BigCommerce, Inc. will provide guidance for litigants involved in contested venue disputes. For more information on this ruling, please contact Fitch Even partner Jon A. Birmingham.


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