IN RE: HTC Corporation

By Jordan E. Gottdank and Nicole R. Townes | May 10, 2018

Editor: Paul Stewart

Federal Circuit Summary

Before PROST, WALLACH, and TARANTO.  On Petition for Writ of Mandamus to the U.S. District Court for the District of Delaware.

Summary: The patent venue statute, 28 U.S.C. § 1400(b), does not apply to foreign corporations, which may be sued in any district where they are subject to personal jurisdiction.

HTC Corporation and its U.S. subsidiary HTC America, Inc. were sued for patent infringement in the District of Delaware.  HTC Corporation is a Taiwanese corporation with its principal place of business in Taiwan; HTC America, Inc. is a Washington corporation with its principal place of business in Seattle, Washington.  HTC Corporation and HTC America filed a motion to dismiss for improper venue under Rule 12(b)(3) or, in the alternative, to transfer the case to the Western District of Washington under 28 U.S.C. §§ 1404(a) or 1406(a).  The district court found that venue in Delaware was improper as to HTC America, but was proper as to HTC Corporation.  The plaintiffs dismissed their suit against HTC America without prejudice, and HTC Corporation petitioned the Federal Circuit for a writ of mandamus directing the District of Delaware to vacate its order denying HTC Corporation’s motion to dismiss for improper venue.

A writ of mandamus is only issued when (1) the petitioner has no other adequate means to attain the relief desired; (2) the petitioner demonstrates a “clear and indisputable” right to the issuance of the writ; and (3) the issuing court is satisfied that the writ is appropriate under the circumstances.  Addressing the first element, the Federal Circuit stated that the petitioner had an adequate remedy to reverse the adverse venue ruling – an appeal from final judgment.  The Court held that it is not enough to argue that hardship or even an unnecessary trial will result from delay.  The Court distinguished motions under Rule 12(b)(3) and § 1406(a), which are based on venue being improper from those under § 1404(a), which condition transfer on “the convenience of parties and witnesses, in the interest of justice.”  The Court explained that the aggrieved party in the latter situation ordinarily does not have an adequate remedy by direct appeal after final judgment because a reversal on venue grounds would require the parties and witnesses to appear in a second trial, which would rarely promote the convenience of the parties and witnesses.

The Federal Circuit also addressed the second element of the mandamus standard, and found that Delaware was a proper venue for suit against HTC Corporation.  The district court had found venue proper in Delaware by applying the Supreme Court’s 1972 Brunette decision, which affirmed the “long-established rule” that suits against foreign corporations are outside the scope of special and general federal venue laws, and may be brought in any judicial district where the defendant is subject to personal jurisdiction.  The Federal Circuit agreed, and explained that applying the patent venue statute to foreign corporations would create a venue gap for certain defendants where a federal court has jurisdiction, but no proper venue to exercise jurisdiction exists.  The Court found that neither the patent venue statute, nor the 2011 Federal Courts Jurisdiction and Venue Clarification Act, showed a clear legislative intent to alter the established rule that venue laws do not protect alien defendants and create such a venue gap for certain defendants.  Because HTC Corporation had other adequate means to attain the desired relief and venue in Delaware was proper, the Federal Circuit denied the petition for writ of mandamus…

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