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Smart Wearable Technologies Inc. v. Fitbit, Inc.

United States District Court, W.D. Virginia, Charlottesville Division

August 29, 2017

FITBIT, INC., Defendant.


          Hon. Glen E. Conrad, United States District Judge.

         Smart Wearable Technologies Inc. ("Smart Wearable") filed this action against Fitbit, Inc. ("Fitbit") for alleged infringement of U.S. Patent No. 6,997,882 B1 ("the '882 Patent"). Based on the United States Supreme Court's recent decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137S. Ct. 1514 (2017), Fitbit has moved to transfer venue. For the reasons set forth below, the court will grant the motion and transfer the case to the United States District Court for the Northern District of California.


         On April 29,2016, the United States Court of Appeals for the Federal Circuit reaffirmed its longstanding rule that, in actions for patent infringement, venue is proper in any judicial district in which a corporate defendant is subj ect to personal jurisdiction. See In re TC Heartland LLC, 821 F.3d 1338,1345 (Fed. Cir. 2016), rev'd, 137 S. Ct. 1514 (2017).

         Approximately six months later, Smart Wearable filed the instant action against Fitbit, a Delaware corporation based in San Francisco, California, asserting claims of direct and indirect infringement of the '882 Patent. Consistent with the then-controlling venue rule, Smart Wearable relied on its allegations establishing personal jurisdiction in the Western District of Virginia to support the assertion that venue is proper in this district. See Compl. ¶ 4, Docket No. 1 ("For all of these reasons, personal jurisdiction exists and venue is proper in this Court....").

         On February 17, 2017, Fitbit moved to dismiss the claims of indirect infringement under Rule 12(b)(6) of the Federal Rules of Civil Procedure. On April 6,2017, the motion was granted in part and denied in part, and Smart Wearable was granted leave to file an amended complaint. Smart Wearable filed an amended complaint, containing the same venue allegations, on April 18, 2017.

         On May 9,2017, Fitbit moved to dismiss certain portions of the amended claims of indirect infringement, pursuant to Rule 12(b)(6). That same day, Fitbit filed an answer to the amended complaint. Although Fitbit did not move to dismiss for improper venue under Rule 12(h)(3) of the Federal Rules of Civil Procedure, Fitbit included an affirmative defense directed to the possibility that the Supreme Court would change the venue rule applied in patent cases. See Answer ¶ 26, Docket No. 44 ("Venue is improper in this judicial district under 28 U.S.C. § 1400(b). Among other things, Fitbit expect[s] that the Supreme Court's upcoming decision in In re TC Heartland LLC (No. 2016-105) will change the Federal Circuit['s] current nation-wide venue rule pursuant to which this case has been brought.").

         The Supreme Court issued its decision in TC Heartland on May 22, 2017. In TC Heartland, the Court reversed the Federal Circuit's longstanding holding that the patent venue statute, 28 U.S.C. § 1400(b), incorporates the broader definition of corporate "residence" contained in 28 U.S.C. § 1391(c). TC Heartland, 137 S. Ct. at 1520. The Court instead held that "a domestic corporation 'resides' only in its State of incorporation for purposes of the patent venue statute." Id., at 1517.

         On June 14,2017, Fitbit filed the instant motion to transfer venue, contending that in light of TC Heartland, venue is improper in this district. In response to the motion, Smart Wearable acknowledges that venue is improper. However, Smart Wearable argues that Fitbit waived the defense of improper venue by not raising it in either of the motions previously filed under Rule 12(b). In reply, Fitbit argues that the defense of improper venue was not available until the Supreme Court decided TC Heartland, and thus that the defense was not waived.

         The court held a hearing on Fitbit's motion on August 10,2017. The matter has been fully briefed and is ripe for review.

         Standard of Review

         When an objection to venue is raised, the plaintiff generally bears the burden of establishing that venue is proper. See Colonna's Shipyard, Inc. v. City of Key West, 735 F. Supp. 2d 414, 416 (E.D. Va. 2010). However, because venue is considered a "personal privilege[] of the defendant," rather than an "absolute stricture[] on the court," Lerov v. Great W. United Corp., 443 U.S. 173,180(1979), a defendant may waive its privilege to demand a proper venue if it does not make a "timely and sufficient objection," 28 U.S.C. § 1406(b).

         Rule 12(b) of the Federal Rules of Civil Procedure provides that every defense to a claim for relief must be asserted in a responsive pleading if one is required, and that certain defenses, including the defense of improper venue, may be asserted by motion. See Fed. R. Civ. P. 12(b). As a general rule, the defense of improper venue is waived if it is not raised in the first motion filed under Rule 12. See Fed. R. Civ. P. 12(g)(2). This rule, however, extends only to defenses that were "available to the party" at that earlier time. Id. Thus, a defendant does not waive the defense of improper venue if such defense was unavailable at the time the defendant filed its first Rule 12 motion. A defense is unavailable if "its legal basis did not exist at ...

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