Rillito River Solar LLC v. Wencon Development Incorporated
4:17-cv-06739
N.D. Cal.Nov 21, 2017Background
- EcoFasten (Rillito River Solar LLC) sued Quick Mount for patent infringement in D. Ariz., alleging venue was proper in Arizona.
- Quick Mount answered, initially asserting lack of information re: venue; later filed a counterclaim for declaratory judgment of invalidity.
- After the Supreme Court decided TC Heartland (May 2017), clarifying that corporations "reside" for patent venue purposes only in their state of incorporation, Quick Mount moved (July 2017) to dismiss for improper venue or, alternatively, to transfer to the Northern District of California (its state of incorporation).
- Quick Mount also moved for leave to amend its answer to expressly deny venue; motion came after the scheduling order deadline for amended pleadings.
- EcoFasten opposed amendment and dismissal, arguing waiver of the venue defense based on earlier pleadings, counterclaim, and post-TC Heartland litigation activity.
- The court granted leave to amend (finding good cause due to TC Heartland), held venue in Arizona improper under 28 U.S.C. § 1400(b), and transferred the case to the Northern District of California.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Quick Mount may amend its answer after the scheduling-order amendment deadline to assert improper venue | Amendment is futile and prejudicial; Quick Mount waived venue defense by prior pleadings and litigation conduct | Good cause exists because TC Heartland created a new, unavailable defense; amendment is timely and not in bad faith | Granted: Rule 16(b) good cause exists due to TC Heartland; leave to amend allowed |
| Whether Quick Mount waived the improper-venue defense by failing to raise it earlier or by filing a counterclaim | Waiver because Quick Mount previously admitted/denied ambiguously and litigated the case; counterclaim relinquishes the defense | Defense unavailable pre-TC Heartland; assertion of counterclaim does not automatically waive venue defenses | Denial: No waiver—defense was unavailable pre-TC Heartland; counterclaim does not bar raising venue objection |
| Whether the action should be dismissed or transferred given improper venue | Case should remain in D. Ariz. because parties already litigated Markman and dismissal is unnecessary | Transfer to Northern District of California is appropriate in interest of justice | Transfer: Court exercises discretion to transfer (rather than dismiss) to N.D. Cal. |
Key Cases Cited
- TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017) (holding § 1400(b) governs corporate "residence" for patent venue — corporation resides only in its state of incorporation)
- Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (1957) (§ 1400(b) is the exclusive patent-venue statute)
- VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990) (formerly treated § 1391(c) as redefining "resides" in § 1400(b))
- Hillis v. Heineman, 626 F.3d 1014 (9th Cir. 2010) (assertion of a counterclaim does not necessarily waive venue defenses when contemporaneously preserved)
- Rates Tech Inc. v. Nortel Networks Corp., 399 F.3d 1302 (Fed. Cir. 2005) (Federal Circuit law may govern waiver issues unique to patent litigation)
