Personal Audio, LLC v. Google, Inc.
280 F. Supp. 3d 922
E.D. Tex.2017Background
- Personal Audio sued Google for patent infringement (filed Sept. 15, 2015); Google moved to dismiss for improper venue under 28 U.S.C. § 1400(b) after TC Heartland abrogated VE Holding.
- Court authorized limited venue discovery focused on whether Google had a "regular and established place of business" in the Eastern District of Texas when suit was filed.
- Key disputed factual bases: a former leased Google office in Frisco, TX (opened 2011, closed Dec. 2013; lease terminated Aug. 31, 2015), presence of Google Global Cache (GGC) servers hosted by third‑party ISPs in the District, and a small number of Google employees working/ living in the District.
- Legal questions centered on (1) who bears the burden of proof on a § 1400(b) venue challenge and (2) whether venue facts are judged as of the filing date or the date the cause of action accrued.
- Court found Plaintiff failed to prove Google had a "regular and established place of business" in the District as of the filing date and therefore venue was improper; rather than dismissing, the court transferred the case to the District of Delaware under 28 U.S.C. § 1406(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Burden of proof on § 1400(b) challenge | Plaintiff: burden should be on defendant (analogy to § 1404(a) practice and general venue principles). | Google: challenge to venue under § 1400(b) was timely and should force plaintiff to prove venue. | Held: burden is on Plaintiff to prove venue under § 1400(b). |
| Relevant time for venue facts | Plaintiff: venue may be assessed at time cause of action accrued (accrual standard) if suit is filed within a reasonable time. | Google: venue must be analyzed as of the date the suit is filed. | Held: venue is assessed as of the filing date (present‑tense text of § 1400(b)). |
| Frisco office = "regular and established place of business" | Plaintiff: leased Frisco office and prior employees show a regular, established presence supporting venue. | Google: Frisco office closed Dec. 2013, lease terminated Aug. 31, 2015, and no Google employees there at filing; insufficient to show presence on filing date. | Held: Frisco office evidence insufficient to show a regular and established place of business as of filing date; plaintiff did not meet its burden. |
| GGC servers / remote home offices as place of business | Plaintiff: GGC servers (and employees working from homes) amount to physical places where Google conducts business in the District. | Google: servers are hosted and controlled by third‑party ISPs (not Google property); employees' homes were not held out or controlled by Google. | Held: GGC servers and remote/home offices do not satisfy Cray’s requirements for a defendant’s "place" of business; inadequate to establish venue. |
Key Cases Cited
- TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017) (§ 1400(b) is the exclusive patent‑venue statute; “resides” means state of incorporation)
- Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (1957) (patent venue statute is standalone and must be strictly construed)
- In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017) (three‑part test for "regular and established place of business": physical place; regular/established; place of the defendant)
- In re Cordis, 769 F.2d 733 (Fed. Cir. 1985) (discusses at‑home sales reps and venue inquiry under § 1400(b))
- Grantham v. Challenge‑Cook Bros., Inc., 420 F.2d 1182 (7th Cir. 1969) (places burden on plaintiff to prove venue under § 1400(b))
- Welch Scientific Co. v. Human Eng’g Inst., Inc., 416 F.2d 32 (7th Cir. 1969) (articulated accrual/reasonable‑delay approach to venue in limited circumstances)