By Angela Underwood | Dec 20, 2017

MARSHALL – A Marshall Division of the Eastern District of Texas judge has dismissed a patent infringement complaint based on venue.

Judge Rodney Gilstrap granted defendant Nutanix’s motion to dismiss without prejudice the complaint brought against it by Uniloc USA Inc. and Uniloc Luxembourg S.A. for improper venue and failure to state a claim.

“In short, plaintiffs have not met their burden to establish that venue is proper in the Western District of Texas,” according to the Dec. 6 order, adding transfer is not a possibility for the case. “In light of this conclusion, the court finds that has little alternative but to dismiss the case pursuant to 28 U.S.C. § 1406(a).”

The complaint stems from a March lawsuit filed against cloud-computing software company Nutanix for alleged infringement of patent '228. Though it is a Delaware corporation, Nutanix allows employees to work from their residences in California, Washington, Virginia, North Carolina and Texas. At the time of the complaint, 19 employees had residences in the Eastern District of Texas, however did not stock product or servers in their homes.

Citing TC Heartland LLC v. Kraft Foods Group Brands LLC 2017 under the legal standard, Gilstrap pointed out that “any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business,” according to the order.

In the case analysis, Gilstrap cited Raytheon Co. v. Cray Inc. 2017, a similar case where an advanced supercomputer seller in Washington employed an account manager who sold its product from a separate state and the Cordis Corp. case, which related to a Florida-based business that also employed out-of-state staffers.  

Even though Cray provided reimbursement to their employees for cellphone, Internet fees and mileage, “the federal circuit concluded that, taken together, these facts did not support a finding that Cray had a regular and established place of business within this district,” according to the order.

Gilstrap continued to cite the two cases in deciding the case before him.

“While there is a fine distinction between Cordis and Cray, the case before this court falls closer on this spectrum to Cray than it does to Cordis,” according to the order. “Although Nuanix has 19 employees who are permitted to work from their individual residences in the Eastern District of Texas, the court finds that none of these residences are ‘places of the defendant,’ as explained by the federal circuit in Cray.” 

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