In re Micron Technology, Inc.
875 F.3d 1091 (Fed. Cir. 2017)
Authored by Christian Lake
Statement of Facts: In June 2016, President and Fellows of Harvard College (“Harvard”) filed a patent infringement case (the “Patent Case”) against Micron Technology, Inc. (“Micron”) in the United States District Court for the District of Massachusetts (the “district court”). Harvard alleged that venue in the District Court of Massachusetts was proper under 28 U.S.C. §§ 1391(b) and 1400. On August 15, 2016, Micron moved to dismiss Harvard’s case under Federal Rule of Civil Procedure (“FRCP”) 12(b)(6) for failure to state a claim, but did not include any objection to venue in the district court under FRCP 12(b)(3).
In May 2017, the Supreme Court decided TC Heartland LLC v. Kraft Foods Group Brands LLC (“TC Heartland”) and held that 28 U.S.C. § 1400(b)’s residence requirement for proper venue against a patent defendant is satisfied only in the corporate defendant’s state of incorporation. 137 S. Ct. 1514, at 1517 (2017).
After the Supreme Court’s decision in TC Heartland, Micron, which was not incorporated in Massachusetts, filed a motion in the district court to either dismiss or transfer Harvard’s case for improper venue. The district court denied Micron’s motion, and held that Micron had waived any venue objections when Micron failed to object to venue at the time it filed its motion to dismiss under FRCP 12(b)(6). The district court also rejected Micron’s contention that TC Heartland was a change of law which made the waiver rule under FRCP 12(h)(1)(A) inapplicable due to the objection being unavailable to Micron at the time it filed its FRCP 12(b)(6) motion.
Procedural History: Micron petitioned the Federal Circuit for a writ of mandamus to reverse the district court’s order and to either dismiss Harvard’s case for improper venue or to transfer the case to either the District of Delaware, where Micron was incorporated, or the District of Idaho, where Micron had its corporate headquarters. Micron, Articles, https://www.micron.com/about/our-commitment/governance/articles (last visited Nov. 19, 2017). Conversely, Harvard asked the Federal Circuit to deny Micron’s petition, or alternatively to vacate the district court’s order and to remand for consideration of 28 U.S.C. § 1400(b)’s allowance of venue where the acts of infringement have occurred and where the defendant has an established place of business. The district court had not considered § 1400(b)’s venue provisions because the court held that Micron waived its venue objection, which made further venue determinations pointless.
Questions Presented: First, is mandamus a proper remedy for Micron’s disagreement with the district court on whether it waived its venue objection? Second, did TC Heartland effect a change of controlling law such that the waiver rules under FRCP 12(h)(1)(A) were inapplicable to Micron? Third, was dismissal, transfer, or remand of Harvard’s case to the district court the proper remedy if Micron had not waived its venue objection prior to filing its 12(b)(3) motion?
Holdings: First, mandamus was appropriate in this case to answer the “basic, undecided” legal question of whether TC Heartland effected a change of controlling law regarding venue in a patent-infringement lawsuit. Second, TC Heartland did change the applicable law and Micron had not, therefore, waived a venue objection made consistent with the reasoning contained in TC Heartland. Third, the appropriate remedy in this case was to vacate the district court’s order denying Micron’s 12(b)(3) venue objection, and to remand the case to the district court for further consideration of other potential forfeitures of venue outside of waiver.
Reasoning: Under 28 U.S.C. § 1651(a), only exceptional circumstances that amount to either judicial usurpation of power or a clear abuse of discretion justify the issuance of mandamus, and the Federal Circuit listed three requirements that must all be met to justify issuance of a writ of mandamus. Those requirements are: 1) the petitioner must have no other adequate means to attain the relief; 2) the right to issuance of the writ is clear and indisputable; and 3) the court must be satisfied the writ is appropriate under the present circumstances. 875 F.3d at 1095. The Federal Circuit held that mandamus was proper in this case because of the basic and undecided legal question among the district courts regarding venue objections in the wake of TC Heartland. Absent issuing a writ of mandamus here, Micron, and other similarly-situated defendants, would suffer and judicial administration would continue to be inefficient in the face of the uncertainty regarding venue in patent infringement cases after TC Heartland.
Moving to the substance of Micron’s petition, the Federal Circuit first addressed the waiver provision contained within FRCP 12(h)(1). Under FRCP 12(h)(1), a party waives an FRCP 12(b)(2‒5) objection if such an objection was omitted in a party’s initial motion to dismiss, yet was available to that party at the time of the initial motion to dismiss, pursuant to FRCP 12(g)(2). To determine the availability of Micron’s venue objection, the Federal Circuit focused on the existing law at the time Micron filed its FRCP 12(b)(6) motion to dismiss and held that Micron’s venue objection was not available in August 2016. The Federal Circuit reasoned that Micron’s venue objection could not have been made prior to TC Heartland because the existing law prior to TC Heartland would have made Micron’s 12(b)(3) motion improper and, therefore, unavailable.
The Federal Circuit interpreted FRCP 12(h)(1)’s availability requirement in accordance with “common-sense,” and held that availability must be determined at the time of the motion to dismiss; not based on some hypothetical availability of relief pending changes to the existing law. Because futile objections are deemed unavailable under FRCP 12(h)(1) and 12(g)(2), Micron’s 12(b)(3) motion was not available in the pre-TC Heartland context. However, the sharp change in applicable law regarding venue in patent-infringement cases after TC Heartland gave effect to Micron’s venue objection. Thus, the Federal Circuit held that Micron did not waive its FRCP 12(h)(1) venue objection, despite not advancing it earlier in the proceeding, because prior to TC Heartland such an objection would have been futile.
Furthermore, the Federal Circuit held that, prior to TC Heartland, the district court was bound by the Federal Circuit’s opinion in V.E. Holding Corp. v. Johnson Gas Appliance Co., which defined “resides” under § 1391 and § 1400 as any jurisdiction in which the defendant could be subject to the personal jurisdiction of the district court therein. 917 F.2d 1574, 1578 (Fed. Cir. 1990). Since venue was proper in the District Court of Massachusetts under the holding in V.E. Holding Corp. at the time Micron made its initial 12(b)(6) motion, any 12(b)(3) venue objections prior to the change in applicable law under TC Heartland were futile and unavailable. Thus, the Federal Circuit held that Micron had not waived its 12(b)(3) motion for dismissal due to improper venue in August 2016.
The Federal Circuit next discussed the proper resolution of Micron’s appeal. In so doing, the Federal Circuit considered additional reasons why a district court could find that a defendant such as Micron could no longer present a venue defense, such as when a defendant has equitably forfeited a venue objection. In Neirbo Co. v. Bethlehem Shipbuilding Corp., the Supreme Court held that venue is a privilege that may be lost or forfeited if not asserted seasonably, or if the conduct of the asserting party justifies denial of the privilege. 308 U.S. 165, 168 (1939). However, the Federal Circuit noted that, on remand, any finding of forfeiture by the district court must be in accordance with the decisional framework set forth by the Supreme Court in Dietz v. Bouldin, Inc., 136 S. Ct. 1885. In Dietz, the Supreme Court held that forfeiture is an appropriate exercise of the District Court’s inherent powers where: 1) it is a reasonable response to the problems presented in the case at hand; and 2) the exercise of such power is not contrary to express grants or limitations on the powers of the court. Id. at 1891–92.
After determining the applicable forfeiture laws, the Federal Circuit refrained from making a final determination on Micron’s venue objection. Instead, the Federal Circuit focused on other circumstances where forfeiture had been found, such as where venue objections were presented close to trial. Such a wait-and-see approach can lead to a finding of forfeiture, according to the Federal Circuit. The Federal Circuit then remanded the case to the district court for consideration of other justifications for disallowance of Micron’s venue objection beyond waiver.