Cellular Dynamics International, Inc. v. Lonza Walkersville, Inc.
3:17-cv-00027
W.D. Wis.Sep 12, 2017Background
- CDI and WARF sued Lonza Walkersville (Delaware corporation; principal place of business in Walkersville, MD) for patent infringement involving induced pluripotent stem cell products and a Lonza Kit.
- After the Supreme Court's decision in TC Heartland narrowed patent-venue law to corporate state of incorporation, Lonza moved to transfer the case from the Western District of Wisconsin to the District of Maryland, arguing Wisconsin is not a proper venue under 28 U.S.C. § 1400(b).
- Lonza produced declarations and limited expedited venue discovery showing no Wisconsin real estate, offices, inventory, bank accounts, or employees; sales are filled and shipped from Maryland; one sales rep visits Wisconsin three days per month and does demonstrations but does not take orders.
- Plaintiffs pointed to a long-standing supply contract with the University of Wisconsin (choice-of-law and forum-selection clause specifying Dane County, WI) and collaborations/quality testing relationships with Wisconsin entities to argue venue or waiver.
- The court limited discovery, accepted Lonza’s declarations as credible for venue purposes, and found the record sufficient to decide the transfer motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lonza "resides" in WDWI for § 1400(b) venue | Venue proper because Lonza is subject to personal jurisdiction here and has business contacts | Residence under § 1400(b) is state of incorporation; Lonza is Delaware-incorporated | Held: Not a resident of WDWI; residence = state of incorporation per TC Heartland |
| Whether Lonza has a "regular and established place of business" in WDWI | Lonza’s sales visits, UW contract, R&D/quality-testing relationships, and service obligations create a regular place of business | No Wisconsin offices, employees, inventory, or permanent presence; orders filled from MD; periodic visits insufficient | Held: No regular and established place of business in WDWI; contacts amount only to doing business |
| Whether forum-selection clause in Lonza–UW contract waives venue objection | Forum clause (Dane County, WI) and WARF as possible third-party beneficiary mean Lonza waived venue defense | Patent action does not "arise under" the supply contract; forum clause governs contract disputes only | Held: Clause does not apply to this patent infringement suit; no waiver of venue defense |
| Appropriate remedy under § 1406(a) | Plaintiffs did not oppose dismissal or transfer location | Transfer to District of Maryland is proper | Held: Case transferred to the U.S. District Court for the District of Maryland in the interest of justice |
Key Cases Cited
- TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017) (held corporate "reside" in § 1400(b) means state of incorporation)
- VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990) (previously treated corporate residence as subject to personal jurisdiction)
- Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957) (historical rule that corporate residence for patent venue is state of incorporation)
- In re Cordis Corp., 769 F.2d 733 (Fed. Cir. 1985) (interpreting "regular and established place of business" to require a permanent and continuous presence)