SNI SOLUTIONS, INC. v. UNIVAR USA, INC.
1:19-cv-03071
S.D. Ind.Jul 23, 2019Background
- Plaintiffs SNI Solutions, Inc. and Natural Alternatives, LLC sued Univar USA, Inc. and Road Solutions, Inc. for patent infringement (de-sugared beet molasses de-icing agent). Case originally filed in Rock Island, transferred to Peoria Division.
- Defendants: Univar incorporated in Washington with HQ in Northern District of Illinois and two locations in Southern District of Indiana; RSI incorporated in Indiana with HQ in Northern District of Indiana and a location in Southern District of Indiana.
- Plaintiffs alleged defendants committed acts of infringement in the Central District of Illinois (sales through dealers, induced sales). Defendants moved to dismiss for improper venue.
- Plaintiffs asserted that third-party entities in the Central District—Bodine (a Univar-acquired subsidiary) and McLean (an RSI dealer/customer)—constitute the defendants’ "regular and established place of business."
- Defendants submitted affidavits showing corporate separateness (Univar/Bodine) and lack of ownership or control (RSI/McLean). The court found Plaintiffs had pleaded acts of infringement in the district but failed to show Bodine or McLean were the defendants’ "place."
- Because venue in the Central District of Illinois was improper, the court denied dismissal and instead transferred the case to the Southern District of Indiana under 28 U.S.C. § 1406(a) to avoid statute-of-limitations prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper venue under 28 U.S.C. § 1400(b) (residence) | Venue proper because defendants have presence in Illinois | Neither defendant is incorporated in Illinois, so they do not "reside" here | Not established—residency requires state of incorporation; defendants not incorporated in Illinois |
| Venue based on acts of infringement in the district | Defendants sold or induced sales of infringing product in Central District | Defendants did not dispute the allegation of acts of infringement | Court accepted pleaded acts of infringement as sufficient for that prong |
| Venue based on a "regular and established place of business" via third parties (Bodine, McLean) | Bodine (Univar subsidiary) and McLean (RSI dealer) are physical, regular places of defendants | Defendants submitted affidavits showing lack of ownership, control, inventory, or other indicia making those sites the defendants’ places | Physical locations exist, but Bodine and McLean are not "the place of the defendant"; plaintiffs failed to meet burden on this element |
| Remedy for improper venue | Dismiss and require refiling | Transfer to proper district to avoid prejudicing plaintiffs’ damages (statute of limitations) | Case transferred to Southern District of Indiana under § 1406(a) rather than dismissed |
Key Cases Cited
- In re Cray Inc., 871 F.3d 1355 (Fed. Cir.) (three-part test for a "regular and established place of business")
- In re ZTE (USA) Inc., 890 F.3d 1008 (Fed. Cir.) (plaintiff bears burden to establish proper venue in patent cases; factors for when a partner location is the defendant's place)
- TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (U.S. 2017) (residency for patent venue requires state of incorporation)
- Deb v. SIRVA, Inc., 832 F.3d 800 (7th Cir.) (court may consider evidence beyond pleadings on venue challenges)
- In re BigCommerce, Inc., 890 F.3d 978 (Fed. Cir.) (discussion of venue and residence in patent cases)
- Symbology Innovations, LLC v. Lego Sys. Inc., 282 F.3d 916 (4th Cir.) (corporate separateness and subsidiary analysis)