TELEBRANDS CORP. v. ILLINOIS INDUSTRIAL TOOL, INC.
2:17-cv-03411
D.N.J.Sep 18, 2017Background
- Telebrands (New Jersey) sued Illinois Industrial Tool, Inc. (IIT) for patent infringement involving decorative lighting patents in the District of New Jersey.
- IIT moved to transfer the case to the Northern District of Illinois under 28 U.S.C. § 1400(b); Telebrands opposed and sought expedited venue discovery.
- Section 1400(b) allows venue where the defendant resides (First Clause) or where the defendant both committed acts of infringement and has a "regular and established place of business" (Second Clause).
- Telebrands conceded IIT is an Illinois corporation (so First Clause does not support New Jersey venue).
- IIT submitted a sworn declaration that its headquarters, employees, and facilities are in Illinois and that it has no regular and established place of business in New Jersey.
- Telebrands presented no evidence showing IIT has a regular and established place of business in New Jersey and requested discovery instead of opposing IIT’s factual showing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether venue is proper under the First Clause (defendant's residence) | Telebrands conceded IIT is an Illinois corporation, so no claim that IIT resides in NJ | IIT is incorporated in Illinois and thus "resides" in Illinois | Court treated First Clause as inapplicable because plaintiff conceded residency in Illinois; venue not proper in NJ under First Clause |
| Whether venue is proper under the Second Clause (infringement + regular and established place of business) | Telebrands did not contest infringement element at this stage but alleged venue in complaint; sought discovery to show IIT’s NJ presence | IIT asserted it has no offices, employees, shareholders, representatives, contractors, or facilities in NJ and no regular and established place of business there | Court found IIT’s sworn declaration showed lack of a regular and established place of business in NJ and Telebrands failed to make an arguable showing to the contrary; Second Clause not satisfied |
| Whether Telebrands should be permitted venue discovery to try to show a NJ business presence | Telebrands asked for expedited venue-related discovery to uncover IIT’s contacts in NJ | IIT argued discovery is unnecessary because its sworn testimony negates a regular and established place of business in NJ and plaintiff offered no plausible contrary evidence | Court denied discovery request; held that the absence of a prima facie showing cannot be cured by mere request for discovery in response to a § 1400(b) transfer motion |
Key Cases Cited
- TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017) (interpreting venue provisions for patent actions under § 1400(b))