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Judge Román Holds Storage Units Don’t Hold Water for Patent Venue Purposes

On May 24, 2018, Judge Nelson S. Román granted Defendant United States Endoscopy Group, Inc.’s (“Defendant”) Motion to Dismiss for Improper Venue pursuant to Federal Rule of Civil Procedure 12(b)(3).  On August 13, 2013, Plaintiffs CDx Diagnostic, Inc., Shared Medical Resources, LLC, and CDx Medical IP, Inc. (“Plaintiffs”) filed suit against Defendant and various unidentified John Does, alleging infringement of Plaintiffs’ patents.  During discovery, Defendant filed a motion to dismiss for improper venue in light of the recent Supreme Court case TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017). 

The Court agreed with Defendant that venue in this District is improper under 28 U.S.C. § 1400(b).  Because Defendant was not incorporated in the District, venue is only proper if Defendant committed acts of infringement and has a regular and established place of business in the District.  The court focused on Defendants’ use of storage facilities used by its customer service personnel to store materials needed when visiting clients.

The Court held that the storage facilities: (1) were a physical place in the district insofar as they were buildings and (2) were “of the defendant” as they were paid for by Defendant, but the storage units were not “regular and established places of business” because no employee or agent of the Defendant actually conducts business from there.  

The case is CDx Diagnostic, Inc. v. U.S. Endoscopy Grp., Inc., No. 13-cv-5669 (NSR) (S.D.N.Y. May 24, 2018).