In Re: Zte (Usa) Inc.
890 F.3d 1008
Fed. Cir.2018Background
- American GNC sued ZTE USA (and related entities) for patent infringement in the Eastern District of Texas; ZTE USA moved to dismiss for improper venue under 28 U.S.C. § 1406(a)/§ 1400(b).
- Magistrate found venue proper based on a Plano, Texas call center run by iQor (First Contact LLC) with dedicated ZTE USA representatives and some ZTE supervisors onsite, placing burden on ZTE USA to show improper venue.
- District court adopted the magistrate report, denied ZTE USA’s motion to dismiss, and ZTE USA petitioned this court for mandamus relief.
- The Federal Circuit granted mandamus to the extent of vacating the denial and remanding: it held Federal Circuit law governs the burden question and placed the burden to establish proper § 1400(b) venue on the Plaintiff (American GNC).
- The court directed the district court to reconsider whether the iQor call center is a “regular and established place of business of the defendant,” applying Cray factors (ownership/control, signage, ability to move, etc.).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Governing law for the burden of proof on § 1400(b) venue | Regional-circuit procedure should govern (analogy to general Rule 12 practice) | Federal Circuit law should govern because § 1400(b) is patent-specific | Federal Circuit law governs the placement of the burden for § 1400(b) venue determinations |
| Which party bears burden on a defendant’s timely venue challenge under § 1400(b) | Burden should be on defendant as an affirmative defense | Burden should be on plaintiff to prove venue when defendant moves to dismiss | Burden of persuasion is on the plaintiff to establish proper venue under § 1400(b) |
| Whether the iQor/Plano call center is a “regular and established place of business of the defendant” | Call center is a place of ZTE USA because of dedicated agents and onsite supervisors | Call center is an independent third‑party location; contractual relationship alone is insufficient | Remanded: district court must apply and make findings on Cray factors (control, ownership, signage, ability to move, personnel relationship) before deciding |
| Appropriateness of mandamus review | Plaintiff: mandamus is not appropriate; ordinary appeal suffices | Defendant: exceptional circumstances justify mandamus to resolve recurring, important patent-venue questions post-TC Heartland | Mandamus granted limitedly: vacated district denial and remanded for reconsideration because issues are recurring and important for uniform patent law |
Key Cases Cited
- In re Cray Inc., 871 F.3d 1355 (Fed. Cir.) (establishes three-part § 1400(b) test and factors for whether a place is "of the defendant")
- TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017) (confirmed patent cases have a specialized venue statute and prompted venue-law clarification)
- In re Micron Technology, Inc., 875 F.3d 1091 (Fed. Cir.) (mandamus in § 1406 context to address TC Heartland fallout)
- Biodex Corp. v. Loredan Biomed., Inc., 946 F.2d 850 (Fed. Cir. 1991) (discusses when Federal Circuit law governs patent-related procedural issues)