Symbology Innovations, LLC v. Lego Sys., Inc.
282 F. Supp. 3d 916
E.D. Va.2017Background
- Symbology Innovations, LLC sued Lego Systems, Inc. for alleged infringement of four QR-code–related patents; Symbology has filed many similar suits since 2015.
- Lego Systems is a Danish company incorporated in Delaware with U.S. headquarters in Enfield, Connecticut; some product packaging contains QR codes but Lego does not make QR‑processing software.
- Symbology sued in the Eastern District of Virginia (Richmond, later consolidated to Norfolk); Lego moved to dismiss and to transfer under § 1404(a), and later challenged venue under § 1406(a) after TC Heartland.
- Post-TC Heartland and In re Cray, the court applied the Supreme Court and Federal Circuit guidance tightening patent-venue analysis under 28 U.S.C. § 1400(b).
- The court found that Symbology’s well‑pled allegations satisfied the “acts of infringement” prong, but Lego Systems did not have a “regular and established place of business” in the Eastern District of Virginia.
- The court denied venue-specific discovery and leave to amend (futility), concluded venue was improper, and transferred the case to the District of Connecticut under 28 U.S.C. § 1406(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of improper‑venue defense | Symbology implied Lego waived by not raising Rule 12(b)(3) earlier | Lego reserved the challenge and sought leave after TC Heartland; equities justify consideration | Court excused waiver and allowed supplemental briefing; addressed venue merits |
| Acts of infringement in forum | Allegations that Virginia store employees tested/scanned QR codes suffice | Lego disputed those factual allegations | Court treated well‑pled allegations as satisfying acts requirement |
| "Regular and established place of business" under §1400(b) | Pointed to sales in Virginia, registration, registered agent, promotional events, and subsidiary Lego Retail stores | Lego maintained no Virginia physical office; Lego Brand Retail is a separate corporate entity; formal separateness preserved | Court held Lego lacks a regular and established place of business in E.D. Va.; subsidiary stores not imputable to Lego Systems |
| Remedy when venue improper; transferee forum | Symbology asked transfer to District of Delaware | Lego requested transfer to District of Connecticut (its U.S. HQ) | Court transferred to District of Connecticut under §1406(a) (transfer in interest of justice) |
Key Cases Cited
- Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (Sup. Ct.) (residence for patent‑venue statute is state of incorporation)
- TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (Sup. Ct.) (reaffirming Fourco; constrains patent‑venue under §1400(b))
- In re Cray, Inc., 871 F.3d 1335 (Fed. Cir.) (articulates three‑part test for "regular and established place of business" under §1400(b))
- Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260 (Sup. Ct.) (§1400(b) construed narrowly; history and purpose of patent venue statute)
- Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333 (Sup. Ct.) (parent/subsidiary separateness limits imputing subsidiary presence to parent)