In re: Micron Technology, Inc.: Uncertainty Remains in Objections to Patent Venue
November 29, 2017
The Court of Appeals for the Federal Circuit recently decided In re: Micron Technology, Inc. As a consequence, litigators should consider the following points:
- For defendants, delay in raising venue-based defenses can lead to the district court rejecting venue arguments despite the lack of an automatic waiver.
- Plaintiffs should look for issues related to timeliness and waiver when responding to an objection to venue.
- In re: Micron Technology is relevant only to pending cases; in new cases venue defenses still must be raised by defendants in their first responsive filings.
The Supreme Court’s decision in TC Heartland in May, 2017, granted defendants greater control over where patent infringement lawsuits can be filed against them. Left open, however, was a question of whether defendants in cases existing at the time of the decision can still seek to transfer pending actions.
Normally, a defendant that seeks to change venue of a litigation must do so as part of a first responsive filing. If the defendant does not move initially, improper venue claims are normally considered waived unless there is an “intervening change in the law.” The Supreme Court in TC Heartland, however, did not explicitly state whether their decision should be considered just such an “intervening change in law.” The issue posed in was: was TC Heartland an “intervening change of law” that prevents waiver of a venue defense or was the venue defense always available prior to TC Heartland?
On November 15, 2017, in In re: Micron Technology the Federal Circuit ruled that TC Heartland “changed the controlling law in the relevant sense.” The Federal Circuit, therefore, reversed the district court ruling that the defendant’s venue argument had been waived because it was not raised prior to TC Heartland.
Prior to Micron Technology, district courts had been split on the issue of whether the decision in TC Heartland was an 'intervening change in the law.' Some courts ruled that TC Heartland was in fact, such a change because the pertinent patent venue statute has remained unchanged for several decades (since 1948) and because older Supreme Court cases, consistent with TC Heartland, were never directly overruled. Other courts argued that TC Heartland created an unexpected change in patent infringement litigation practices, and that defendants should not have been expected to appeal venue all the way to the Supreme Court in order to challenge decades of accepted jurisprudence.
Micron Technology does not provide exhaustive instructions on how venue disputes in pending patent infringement cases should be resolved. While concluding that the Supreme Court’s decision in TC Heartland prevents venue defenses from being waived on grounds that the case did not represent a change in law, the Federal Circuit stated that such a waiver is not the only basis on which a venue defense may be excluded even if the defense may have succeeded on its merits. According to the Federal Circuit, a district court has inherent power to “reasonably” manage its own affairs to achieve orderly and expeditious practices and procedures; at some point in the litigation, defendants can be deemed to have forfeited their ability to object on the basis of improper venue.
While the Federal Circuit does not specify all of the circumstances in which a district court may preserve or find forfeited a right to object to venue under TC Heartland, it did acknowledge that “timeliness” could be a factor, for example, by considering how soon the trial is to be commenced and the length of delay since the defense first became available. Specific instances prior to In re: Micron Technology include denial of requests for writs of mandamus when defendants challenged venue close to trial (e.g. less than three months prior to start).
The Federal Circuit in In re: Micron Technology Inc. appears to largely resolve the ongoing split among district courts by ruling that the Supreme Court’s decision in TC Heartland was an “intervening change in law” that prevented the waiver of an objection to venue in existing cases on that basis. By doing so, however, the Federal Circuit may leave the district courts to develop their own standards and procedures relating to “timeliness” and possibly other factors when adjudicating venue objections. It will be important to follow district courts decisions and how the Federal Circuit judges the “reasonableness” of those developing standards.