By David Yates | Nov 30, 2017

MARSHALL – While FedEx may advertise that it’s “everywhere you need to be,” apparently that slogan also applies to judicial venue, at least when the litigation is brought in the Eastern District of Texas – a preferred venue for patent suit filers.

On Nov. 22, U.S. District Judge Rodney Gilstrap denied a FedEx motion to dismiss, which argued the Supreme Court’s precedent-setting ruling in TC Heartland makes the Eastern District the improper venue for a patent lawsuit against the company and its subsidiaries.

“According to the FedEx Defendants’ advertising, they are 'everywhere' you need them to be. However, in their Motion to Dismiss Defendants argue that they are everywhere but this District, at least with respect to venue,” wrote Gilstrap.

“The Court disagrees. Accordingly … Defendants’ Motion is DENIED.”

The TC Heartland ruling aimed to keep patent suits confined in districts where the defendant is incorporated or has an established place of business.

However, since the ruling, Eastern District judges, like Gilstrap for example, have often denied motions to transfer venue or dismiss from defendant companies with arguably no place of business within their jurisdiction.

FedEx experienced the pattern first hand in an infringement suit brought by Intellectual Ventures II, a Washington patent licensing company that contended venue was proper in the Eastern District because FedEx operates service centers within the area.

In its suit, IV II alleges FedEx and its subsidiaries infringed upon several patents held by the company, most of which center around the tech behind managing and tracking mobile field assets (packages).   

Court records show on July 27 FedEx filed a motion to dismiss, arguing that a regular and established place of business is lacking within the Eastern District.

“Plaintiff Intellectual Ventures II attempted pre-TC Heartland to shoehorn all Defendants into this District based on the Federal Circuit’s prior personal jurisdiction test, now defunct,” the motion states. “It is also well understood that venue requirements must be met as to each defendant. That has not been satisfied by IV2 in this case.”

Although FedEx objected to the venue from the get go, Gilstrap says the company never cited the TC Heartland case until filing its motion to dismiss, two months after the Supreme Court’s ruling.

“…(T)he Court begins by examining Defendants’ conduct after TC Heartland was decided,” the order states. “Even at this point, Defendants continued actively litigating this case for months.”

Gilstrap concluded FedEx’s venue objection had been “waived based on their own conduct,” the judicial resources already expended by the court, and the “prejudice” to IV II in reopening a dormant venue dispute “simply because it has become convenient” for FedEx “to litigate the issue now.”

“The various FedEx locations established in this District are not merely places from which Defendants happen to carry out business because of an employee or a customer,” the order states. “These locations are stores and facilities operated by Defendants for their business purposes and held out to consumers as places from which customers can tap into Defendants’ vast shipping network.”

Longview attorney William Davis, along with the New York law firm Demarais LLP, represent IV II.

FedEx is represented by Tyler attorney Eric Findlay, along with attorneys for the D.C. law firm Finnegan, Henderson, Farabow, Garrett & Dunner.

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