Cstechus, Inc. v. NorthernZone, LLC
- Proceeding
- district
- Area
- civil
- Panel
- Marilyn L. Huff (author)
Analysis
The court considered Plaintiff's motion for leave to conduct discovery on venue and for an extension of time to file an amended complaint in a patent infringement case where the court had previously denied a motion for default judgment due to insufficient claims and improper venue. The court denied the motion for discovery as futile but granted the extension of time to file an amended complaint.
| What the court decided | The model |
|---|---|
Denial of Plaintiff's Motion for Leave to Conduct Discovery“In sum, the requested discovery is futile and is not capable of establishing that venue proper in this district. As a result, the Court denies Plaintiff's request to conduct discovery on venue.” | agree with court The court correctly applied the standard for patent venue under 28 U.S.C. § 1400(b) and controlling Federal Circuit precedent (TC Heartland, In re Cray, In re ZTE). The plaintiff sought discovery regarding online sales, advertising, and marking. The court correctly identified that these activities do not satisfy the requirement of a 'physical place' in the district, which is a necessary element for a 'regular and established place of business.' Therefore, the discovery was indeed futile for the purpose of establishing venue. |
Granting of Plaintiff's Request for an Extension of Time“Nevertheless, the Court grants Plaintiff's request for an extension of deadline to file its amended complaint. Plaintiff must file its amended complaint by January 29, 2022.” | agree with court The court has broad discretion to manage the docket and grant extensions of time. The order does not provide specific reasons for granting the extension, but it is a procedural matter within the court's discretion. There is no indication of error in granting the extension. |
The order itself: sound — The court's reasoning is sound. It correctly identifies the legal standard for patent venue, applies it to the specific facts presented (plaintiff's request for discovery on online activities), and concludes that the requested discovery cannot satisfy the 'physical place' requirement. The authorities cited are the correct and binding precedents for this issue in the Federal Circuit, which governs patent venue nationwide. The court also appropriately notes the plaintiff's own acknowledgment that it must show a regular and established place of business, making the futility of the requested discovery clear.
Opinion
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8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10
11 CSTECHUS, INC., a California Case No.: 21-cv-00122-H-AHG 12 corporation, ORDER: 13 Plaintiff, 14 v. (1) DENYING PLAINTIFF’S MOTION FOR LEAVE TO 15 NORTHERNZONE, LLC, CONDUCT DISCOVERY; AND 16 Defendant. (2) GRANTING PLAINTIFF’S 17 REQUEST FOR AN EXTENSION OF 18 TIME 19 [Doc. No. 21.] 20 On January 21, 2021, Plaintiff CSTECHUS filed a complaint for patent infringement 21 against Defendant NorthernZone LLC, alleging infringement of U.S. Patent No. 9,585,365 22 (“the ’365 patent”). (Doc. No. 1, Compl.) On March 26, 2021, the Clerk entered default 23 against Defendant. (Doc. No. 9.) 24 On August 24, 2021, Plaintiff filed a motion for default judgment against Defendant. 25 (Doc. No. 16.) On October 25, 2021, the Court denied Plaintiff’s motion for default 26 judgment. (Doc. No. 20.) In denying the motion, the Court explained that Plaintiff had 27 failed to adequately state a claim for patent infringement against Defendant. (Id. at 3-5.) 28 1 In addition, the Court noted that venue appeared to be improper in this district. (Id. at 5.) 2 The Court granted Plaintiff leave to file an amended complaint within 30 days from the 3 date of the October 25, 2021 order. (Id. at 6.) 4 On November 29, 2021, Plaintiff filed a motion for leave to conduct discovery on 5 venue and for an extension of the deadline to amend the complaint. (Doc. No. 21.) In the 6 motion, Plaintiff states that it seeks to conduct discovery on the online sales, advertising, 7 and marking of Defendant’s infringing products in this district in order to show that 8 Defendant conducts business in this district. (Id. at 4.) The Court denies this request 9 because the requested discovery even if obtained from Defendant would be insufficient to 10 establish venue in this district. 11 The patent venue statute, 28 U.S.C. § 1400(b), provides: “Any civil action for patent 12 infringement may be brought in the judicial district where the defendant resides, or where 13 the defendant has committed acts of infringement and has a regular and established place 14 of business.” “[F]or purposes of § 1400(b) a domestic corporation “resides” only in its 15 State of incorporation.” TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 16 1514, 1517 (2017). Further, for purposes of § 1400(b), in order for a defendant to have “a 17 regular and established place of business” in the district, the following three requirements 18 must be met: “(1) there must be a physical place in the district; (2) it must be a regular and 19 established place of business; and (3) it must be the place of the defendant. If any statutory 20 requirement is not satisfied, venue is improper under § 1400(b).” In re Cray Inc., 871 F.3d 21 1355, 1360 (Fed. Cir. 2017). The plaintiff bears the burden of establishing proper venue 22 under section 1400(b). In re ZTE (USA) Inc., 890 F.3d 1008, 1013 (Fed. Cir. 2018). 23 Thus, in order for venue to be proper in this district, the Defendant must either: (1) 24 reside in this district; or (2) have a regular and established place of business in this district. 25 See 28 U.S.C. § 1400(b). It appears that the Defendant does not reside in this district 26 because in the complaint, Plaintiff alleges that Defendant is “a Colorado company having 27 its principal place of business” in “Bailey, CO.” (Doc. No. 1, Compl. ¶ 2.) Indeed, in the 28 present motion, Plaintiff acknowledges that in order to establish that venue is proper in this 1 || district, it must show in its amended complaint that Defendant has a regular and established 2 ||place of business in this district. (Doc. No. 21 at 3.) But despite acknowledging this, 3 || Plaintiff states in the motion that it is seeking to conduct discovery on the alleged online 4 sales, advertising, and marking of Defendant’s infringing product in this district. (Id. at 4.) 5 || None of the requested discovery is capable of establishing that Defendant has a regular and 6 || established place of business in this district. In order to have a regular or established place 7 || of business in this district, the Defendant must have “a physical place” in this district. Cray, 8 ||871 F.3d at 1360. Online sales, advertising, and marking products do not show that the 9 || Defendant has a physical place in this district. 10 In sum, the requested discovery is futile and is not capable of establishing that venue 11 proper in this district. As a result, the Court denies Plaintiff's request to conduct 12 || discovery on venue. Nevertheless, the Court grants Plaintiff's request for an extension of 13 deadline to file its amended complaint. Plaintiff must file its amended complaint by 14 || January 29, 2022. 15 IT IS SO ORDERED. 16 || DATED: December 1, 2021 | | | | | M7 MARILYN ©. HUF F, Distri ge 18 UNITED STATES DISTRICT COURT 19 20 21 22 23 24 25 26 27 28