315 F. Supp. 3d 933
E.D. Tex.2018Background
- SEVEN Networks sued Google for patent infringement in the Eastern District of Texas; Google moved to dismiss for improper venue after venue discovery.
- Venue analysis governed by 28 U.S.C. § 1400(b) post-TC Heartland and guided by Federal Circuit decisions such as In re Cray and In re ZTE.
- SEVEN alleged Google caches popular content on Google Global Cache (GGC) servers physically hosted by local ISPs (e.g., Suddenlink, CableOne) in the Eastern District of Texas; Google provides hardware/software, owns the servers, and exercises contractual control over placement and maintenance.
- SEVEN pleaded that at least one step of asserted method claims and portions of system claims are performed in the District and that the GGC servers cache and deliver Google content (ads, apps, Play content) to local users.
- The Court conducted a Cray-style three-part §1400(b) analysis: (1) physical place in the district; (2) that place is a regular and established place of business; and (3) the place is "of the defendant."
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether venue can be based on defendant's residence | SEVEN: Google is incorporated in Delaware, so venue must be based on acts/place of business in Texas | Google: residence is Delaware so venue must be dismissed unless §1400(b) second prong met | Court: conceded residence is Delaware; analyzed second prong and denied dismissal because second prong satisfied |
| Whether acts of infringement occurred in the District | SEVEN: Complaint alleges at least one step of method claims and system elements performed/located in the District — sufficient for §1400(b) | Google: method claims require all steps in the District (citing NTP); SEVEN must tie alleged acts to the defendant’s place of business | Court: Rejected Google’s all-steps-in-district rule; partial performance or contributory/induced acts in district suffice; SEVEN adequately pled acts in district |
| Whether acts must be related/tied to the defendant’s regular and established place of business | SEVEN: statute treats the two requirements independently; no statutory tie required | Google: §1400(b) requires acts of infringement to occur at/relate to defendant’s place of business | Court: Rejected Google’s conjunctive reading; statutory elements are independent; no extra requirement that acts be tied to the place of business |
| Whether GGC servers/host locations are a "regular and established place of business of the defendant" | SEVEN: GGC servers are physical servers placed and controlled by Google, function as local data warehouses, are owned and managed by Google under hosting agreements, and serve local users — thus they are physical, regular, established, and "of Google" | Google: Servers are mere equipment inside ISP facilities; the ISP locations/rooms are not Google’s; servers are not places of business and are insignificant to Google’s overall operations | Court: Found servers + leased rack/agreements meet Cray physicality, regularity, permanence, and defendant-control requirements; GGC locations are places of Google and suffice for §1400(b) venue |
Key Cases Cited
- In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017) (establishes three-part analysis for §1400(b): physical place, regular and established place of business, and place must be of the defendant)
- In re ZTE (USA) Inc., 890 F.3d 1008 (Fed. Cir. 2018) (plaintiff bears burden to establish venue; courts should assess control/ownership factors for whether place is of defendant)
- TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017) (governs corporate residence for patent-venue analysis)
- NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005) (method-claim infringement requires performance of all claim steps, discussed by parties though Court rejected its strict application for venue)
- In re Micron Tech., Inc., 875 F.3d 1091 (Fed. Cir. 2017) (post-TC Heartland venue guidance cited)
- In re BigCommerce, Inc., 890 F.3d 978 (Fed. Cir. 2018) (reinforces that venue requirements must track statutory language without extra-statutory additions)