Patent Lawyer Blog
After this patent infringement action was filed, the defendant, BigCommerce, filed a motion to dismiss for failure to state a claim for relief pursuant to Fed.R.Civ.P. 12(b)(6). BigCommerce did not file a motion to transfer or to challenge at that time. After the district court ordered the plaintiff to file an amended complaint and the plaintiff filed the amended complaint, BigCommerce filed a motion for improper venue pursuant to Fed.R.Civ.P. 12(b)(3). The BigCommerce motion was filed shortly after the Supreme Court’s decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, No. 16-341, 137 S.Ct. 1514 (May 22, 2017).
BigCommerce argued that although it is incorporated in Texas, it is not incorporated in the Eastern District of Texas and lacks any place of business in the Eastern District of Texas. Therefore, BigCommerce argued it should be dismissed from the case because of improper venue.
The district court concluded that BigCommerce had waived the defense because the defense was not raised in the original Fed.R.Civ.P. 12(b)(6). “A party waives any defense listed in Rule 12(b)(2)–(5) by . . . omitting it from a motion in the circumstances described in Rule 12(g)(2).” Fed. R. Civ. P. 12(h)(1)(A). Under Rule 12(g)(2), “a party that makes a motion under this rule must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.” Certain defenses are exempt from Rule 12(g)(2)’s consolidation requirement, but venue is not one of the exempt defenses. See Rule 12(h)(2)–(3). See Elbit Sys. Land & C41 Ltd. v. Hughes Network Sys., LLC, No. 2:15-cv-37-RWS-RSP, 2017 WL 2651618, at *19 (E.D. Tex. June 20, 2017) (citing Albany Ins. Co. v. Almacenadora Somex, S.A., 5 F.3d 907, 909 (5th Cir. 1993)). “Thus, by filing a motion to dismiss for failure to state a claim under Rule 12(b)(6) and omitting its venue defense, [BigCommerce] waived the defense.” Id. at *20 (citing Fed. R. Civ. P. 12(g)(2) and 12(h)(1)(A)).
As the district court explained, “BigCommerce argues that TC Heartland was an intervening change in law and thus a venue defense was not available when it filed its first Rule 12(b) Motion. (Doc. No. 17, at 1–2.) This Court agrees with decisions holding that “TC Heartland does not qualify for the intervening law exception to waiver because it merely affirms the viability of Fourco.” Elbit, 2017 WL 2651618, at *20.”
BigCommerce also asserted that “[a] defense cannot simultaneously be borderline sanctions worthy under Rule 11, which is what an appeal to the fact of a certiorari grant would have been once numerous courts in the same District soundly rejected it, yet simultaneously available under Rule 12.”
The district court rejected this argument as well. “BigCommerce filed its first 12(b) Motion ten months after the Supreme Court granted certiorari in TC Heartland and over a month after the Supreme Court heard oral argument. With a Supreme Court decision looming, it is not unreasonable to require a defendant to raise the propriety of venue in accordance with the federal rules and therefore preserve its consideration after the Supreme Court issues its ruling.”
Accordingly, the district court denied the motion to dismiss for improper venue.
Diem LLC v. Bigcommerce, Inc., Case No. 6:17-CV-186 (JRG-JDL) (E.D. Tex. July 6, 2017)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.