Orthosie Systems, LLC v. Redtail Telematics Corporation, 3:17-cv-01857

Orthosie Systems sued Redtail Telematics for infringement of U.S. Patent No. 7,430,471 in the Eastern District of Texas on December 5, 2016.
Redtail answered on March 6, 2017, denying venue allegations and asserting it is a California corporation with no physical presence in the Eastern District of Texas.
After TC Heartland (Supreme Court clarified patent-venue law), Redtail moved on June 6, 2017 to dismiss for improper venue under 28 U.S.C. § 1406(a) or alternatively to transfer venue.
Orthosie argued Redtail waived the venue defense by (1) filing an answer before the motion, (2) not specifically invoking § 1400(b) in its answer, and (3) missing the court’s scheduling deadline for transfer motions.
The court found Redtail preserved its improper-venue defense by denying venue in its answer, that its post-answer Rule 12(b)(3) motion was not untimely given limited litigation activity, and Orthosie did not contest Redtail’s substantive assertions about residency and lack of a regular and established place of business in the Eastern District.
The court granted Redtail’s motion and transferred the case to the Southern District of California in the interest of justice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Redtail waived improper-venue defense by filing an answer before the Rule 12 motion	Redtail’s post-answer motion is untimely under Rule 12	Even if post-answer, defense preserved if raised in answer	No waiver; preserved by general denial in answer
Whether Redtail waived by failing to specifically invoke § 1400(b) in its answer	Failure to cite § 1400(b) and affirmatively object waives defense	General denial in answer preserved venue defense	No waiver; general denial sufficient
Whether Redtail’s motion was untimely under the Court’s scheduling order	Motion filed after the scheduling deadline; thus waived	Motion filed before extensive litigation; timely for venue objection	Timely—not barred by scheduling order given limited litigation
Whether venue is proper in Eastern District of Texas under § 1400(b) after TC Heartland	Venue proper per plaintiff’s complaint allegations	Redtail resides in California and lacks a regular established place of business in the Eastern District	Venue improper; case transferred to Southern District of California

Fourco Glass Co. v. Transmirra Prod. Corp., 353 U.S. 222 (establishing § 1400(b) as the governing patent-venue statute)
TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (domestic corporation resides only in state of incorporation for patent-venue purposes)
Brokerwood Int’l (U.S.), Inc. v. Cuisine Crotone, Inc., 104 F. App’x 376 (5th Cir.) (post-answer Rule 12(b) motions may be considered timely if the defense was preserved in the answer)