Andra Group, Lp v. Victoria's Secret Stores, LLC
6 F.4th 1283
Fed. Cir.2021Background
- Andra Group sued L Brands, Victoria’s Secret Stores, Victoria’s Secret Direct Brand Management, and Victoria’s Secret Stores Brand Management (collectively, Defendants) for infringement of U.S. Patent No. 8,078,498 based on functionality of the victoriassecret.com site and apps.
- The Non-Store Defendants (LBI, Direct, Brand) are Delaware corporations with no employees, stores, or other physical presence in the Eastern District of Texas; Stores operates retail locations in the District.
- Venue was contested under 28 U.S.C. § 1400(b); Andra relied on Stores’ in-district retail locations to establish that the Non-Store Defendants had a “regular and established place of business” in the District.
- Andra advanced two theories to impute Stores’ presence to the Non-Store Defendants: (1) Stores employees are agents of the Non-Store Defendants; and (2) the Non-Store Defendants ratified Stores locations as their places of business.
- The magistrate judge recommended dismissing the Non-Store Defendants for improper venue; the district court adopted that recommendation and dismissed them without prejudice. Andra appealed that dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether venue proper under §1400(b) for Non-Store Defendants by treating Stores locations as their "regular and established place of business" | Stores locations should be imputed to Non-Store Defendants because the entities operate a unified business and share operations | Non-Store Defendants are separate entities incorporated in Delaware with no physical presence in the District | Venue improper as to Non-Store Defendants; dismissal affirmed |
| Whether Stores employees are agents of Non-Store Defendants (agency) | LBI/Direct/Brand control store operations, hiring/firing, returns policy and website functions — showing control required for agency | Stores employees and managers hire, fire, and manage store operations; Non-Store Defendants lack right to direct or control in-district store staff | No agency: plaintiff failed to show the requisite right to direct or control Stores employees |
| Whether Non-Store Defendants ratified Stores locations as their own places of business (imputation) | Non-Store Defendants exercise control, sell/distribute products via Stores, and represent a unified brand, so Stores are ratified places of business | Corporate separateness maintained; Non-Store Defendants don’t own/lease stores, don’t engage in business from store locations, and perform different functions | No ratification: plaintiff failed to show Non-Store Defendants actually engage in business at Stores locations or abandoned corporate separateness |
| Whether dismissal should be converted to transfer to another district | Plaintiff did not seek transfer as to only some defendants and elected to proceed in Eastern District if others remained | Defendants sought dismissal or transfer to Southern District of Ohio as alternative | Court affirmed dismissal for improper venue; transfer was not addressed because venue failed as to the Non-Store Defendants |
Key Cases Cited
- Westech Aerosol Corp. v. 3M Co., 927 F.3d 1378 (Fed. Cir. 2019) (standard of review and plaintiff’s burden for patent venue)
- TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017) (a domestic corporation resides only in its state of incorporation for patent venue)
- In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017) (three-factor test for a "regular and established place of business")
- In re Google LLC, 949 F.3d 1338 (Fed. Cir. 2020) (agency and regular-presence requirements for venue; limited contractor activities insufficient)
- Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260 (1961) (venue statute must not be liberally construed)
- In re ZTE (USA) Inc., 890 F.3d 1008 (Fed. Cir. 2018) (contractual relationships alone do not make a location a defendant’s place of business)
- Meyer v. Holley, 537 U.S. 280 (2003) (elements of agency: control, principal’s manifestation, agent’s consent)
- Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333 (1925) (corporate separateness governs whether one company’s place of business may be imputed to another)