November 15, 2017

Perhaps Out of Guilt, the Federal Circuit Grants Mandamus to Permit Venue Challenge

By Bryan K. Wheelock, Principal

In In re Micron Technology, Inc., [2017-138] (November 15, 2017), the Federal Circuit granted Microns’ petition for Mandamus to permit it to challenge the venue of the patent infringement case brought against it.  The District of Massachusetts refused to allow the challenge, finding that the Supreme Court’s decision was not a change of law that would make Rule 12(g)(2) and hence Rule 12(h)(1)(A) inapplicable.

The Federal Circuit concluded as a matter of law that a venue defense was not “available” to Micron in August 2016 because the Supreme Court had not yet decided TC Heartland and, before then, it would have been improper, given controlling precedent, for the district court to dismiss or to transfer for lack of venue.

The Federal Circuit said that where controlling law precluded the district court at the time of the motion from adopting a defense or objection and on that basis granting the motion, it is natural to say, in this context, that the defense or objection was not “available” to the movant.  The Federal Circuit added that when a defense or objection is futile in the sense that the law bars the district court from adopting it to dismiss, to require the assertion of the defense or objection in an initial motion to dismiss, on pain of waiver, would generally be to require the waste of resources, contrary to Rule 1.

The Federal Circuit said that this case is one in which controlling precedent precluded the district court from adopting an objection to venue before the Supreme Court decided TC Heartland — specifically, from adopting such an objection in August 2016, when Micron made its first Rule 12 motion.  On the patent-specific issue of the proper interpretation of 28 U.S.C. § 1400(b), the district court was bound by Federal Circuit precedent.  Circuit court precedent is binding on district courts notwithstanding the mere possibility that the Supreme Court might come to disapprove that precedent.

The Federal Circuit reasoned that TC Heartland was a change in law because the Supreme Court had never construed §1400(b) under the particular versions of §1391.  That change of law, severing §1400(b) from §1391(c), made available to Micron in this case the objection that it does not come within the meaning of “resides” for purposes of venue under §1400(b).

The Federal Circuit thus granted the petition for Mandamus vacating the Order denying Micron’s Rule 12(b)(3) motion, and remanding the case for further proceedings consistent with its Order.