Order Denying Defendants' Motion to Dismiss or Transfer Venue, Wordtech Systems Inc. v. Integrated Network Solutions, Corp., Case No. 2:04-cv-1971 (Judge Troy Nunley)
As you know, we generally report on decisions issuing from our beloved Northern District of California. But this blog is committed to reporting on interesting cases from anywhere in the Northern California area. So today we're reporting on a fun patent case from Sacramento, which is actually north of San Francisco (but curiously in the Eastern District of California judicial district). The order takes a look at whether there was proper venue, an issue that typically does not come up in patent disputes. In an order that should shock no one, the court held that an 8 year (!) delay in moving to dismiss constituted waiver.
Wordtech began all the way back in 2004—the same year Facebook launched—when the plaintiff filed suit in the Eastern District of California. None of the defendants resided in the Eastern District, so they successfully moved to dismiss for improper venue. Wordtech re-filed its suit, this time adding the San Juan Unified School District, which is located in the Eastern District. In their answers the Defendants again objected to venue, arguing it was improper.
But then, inexplicably, the Defendants did not bring a motion to dismiss for improper venue. They waited, and waited, and waited some more. In its Final Pre-trial Order the court warned the Defendants that they were in danger of waiving their improper venue defence. Nevertheless, after San Juan Unified was dismissed, the parties went to trial, where the jury found infringement. Defendants appealed and the Federal Circuit reversed in part and remanded in 2010. Finally, after all that, the Defendants moved to dismiss for improper venue in December of 2013.
The court noted that the moving Defendants resided in the Central District of California for the relevant times of the lawsuit. Although the court conceded that proper venue "appeared" to be in the Central District, it found that the Defendants' 8-year delay in bringing a motion was far too long. During that time they tried the case and argued an appeal at the Federal Circuit. The Defendants countered that they waited to file their motion because the "dummy defendant," San Juan Unified, would have made venue proper. But even if that were true—and Judge Nunley did not think it was—the remaining Defendants still did not move to dismiss after San Juan Unified was dismissed.
The Defendants' motion asked, in the alternative, for a discretionary transfer to their home district, the Central District of California. The court found that venue was not inconvenient for the parties because the Defendants have already spent years litigating in the Eastern District, up to and including participating in trial. And the court was not persuaded that the Central District would be more convenient for the witnesses either, as the Defendants' arguments on this point were conclusory.
Although making an objection in an answer is generally enough to preserve certain affirmative defences, at some point a defendant has ask the court to take action. When to do so is a nuanced, strategic question, but is safe to say that eight years is probably too long.
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