Orthosie Systems, LLC v. Redtail Telematics Corporation, 4:16-cv-00927

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, a California corporation with principal place of business in San Diego, answered on March 6, 2017 and denied venue allegations.
After the Supreme Court decided TC Heartland, Redtail moved (June 6, 2017) to dismiss for improper venue under 28 U.S.C. § 1406(a) or, alternatively, to transfer.
Orthosie argued Redtail waived the venue defense by (1) filing an answer before moving, (2) failing to assert a specific § 1400(b) objection in the answer, and (3) filing the motion after the court’s scheduling deadline.
The court found Redtail did not waive the venue defense (its general denial preserved the issue), Orthosie did not dispute Redtail’s factual assertions about lack of a Texas presence, and venue under § 1400(b) was improper in the Eastern District of Texas.
In the interest of justice the case was transferred to the United States District Court for the Southern District of California.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether venue is proper under 28 U.S.C. § 1400(b)	Venue proper in E.D. Tex.; defendant transacted business and infringed there	Redtail is incorporated in California and has no regular/established place of business in E.D. Tex.	Venue improper in E.D. Tex.; § 1400(b) allows venue only in state of incorporation or where there is a regular and established place of business and acts of infringement.
Waiver by filing answer before motion (Rule 12 timing)	Redtail waived by answering before moving	Post-answer Rule 12(b) motions are acceptable if defense preserved in answer	No waiver; general preservation in answer suffices; motion deemed timely if defense preserved.
Sufficiency of Redtail’s answer to preserve improper-venue defense	Redtail should have specifically invoked § 1400(b) in answer	General denial of venue allegations preserved the defense	General denial preserved the venue defense; no specific citation to § 1400(b) required.
Timeliness under the Court’s Order Governing Proceedings / prior litigation conduct	Motion was late per scheduling order (deadline April 24)	Motion filed before extensive litigation; timely under preservation doctrine	Motion timely—parties had not engaged in extensive litigation; defense preserved and motion not untimely.

Fourco Glass Co. v. Transmirra Prod. Corp., 353 U.S. 222 (1957) (venue for patent actions governed by § 1400(b))
TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017) (domestic-corporation venue limited to state of incorporation under § 1400(b))
Brokerwood Int’l (U.S.), Inc. v. Cuisine Crotone, Inc., [citation="104 F. App'x 376"] (5th Cir. 2004) (post-answer Rule 12(b) motions may be timely if defense preserved in answer)