TYLER – The U.S. District Court for Eastern Texas, a favorite venue for patent litigation, will hold on to at least one more patent lawsuit for the time being, as a federal judge recently found a defendant’s TC Heartland argument “unpersuasive.”
Realtime Data, a Plano company, filed suit against Barracuda Networks, a Delaware corporation with its principal place of business in California, on Feb. 2, 2017, in the Eastern District, arguing the defendant infringed several patents dealing with the compression, storage and retrieval of data.
Many companies, known commonly as patent trolls, set up shop in Plano and other East Texas cities for the sole purposes of acquiring patents to sue tech companies.
According to the complaint for infringement, Realtime argued jurisdiction was proper because Barracuda sold products in the Eastern District and on “information and belief” maintains an office in Austin, which is located within Texas’ Western District.
Barracuda answered the complaint on April 24, denying the alleged infringement within the Eastern District but did, however, admit the court may exercise personal jurisdiction.
A month later, on May 22, the U.S. Supreme Court unanimously found in favor of TC Heartland, a ruling aiming to keep patent suits confined in districts where the defendant is incorporated or has an established place of business.
Nine days after the ruling, Barracuda filed a motion for leave to amend its answer, arguing that TC Heartland represented a change in the legal interpretation of patent venue, making the Eastern District no longer the proper and convenient forum for the dispute.
On June 2, the following day, Barracuda filed a motion to dismiss for improper venue, court records show.
“Because Barracuda neither is incorporated in Texas nor ‘has a regular and established place of business’ in this district – and Realtime Data has not alleged otherwise – venue is improper,” the motion states.
“Accordingly, Barracuda believes this case must be dismissed.”
On July 13, U.S. Magistrate Judge John Love issued a report, denying Barracuda’s motion for leave and recommending its motion to dismiss also be denied.
Love found that Barracuda had 21 days to amend its answer and waived its venue defense. He also found that TC Heartland merely affirms a previous ruling.
“Barracuda’s argument that an improper venue defense was not available to it at the time it filed its Answer is thus unpersuasive,” Love writes.
“Barracuda filed its Answer a month after the Supreme Court heard oral argument in TC Heartland. As this Court has recently stated, ‘[w]ith 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.’”
Realtime is represented in part by Longview attorney T. John Ward Jr.
Ward is the son of former East Texas judge T. John Ward III, who, along with Leonard Davis, oversaw the Eastern District as it became a popular venue for patent suits.
Beaumont attorney Thad Heartfield represents Barracuda.
Heartfield did not return requests for comment.
Filed in the U.S. District Court for the Eastern District of Texas, Tyler Division, cause No. 6:17-cv-00120