United States District Court, W.D. Washington, Tacoma
ORDER GRANTING LEAVE TO AMEND AND TO TRANSFER DKT.
B. LEIGHTON UNITED STATES DISTRICT JUDGE.
MATTER is before the Court on Defendant ICON's Motion
[Dkt. #46] for leave to amend its answer. ICON seeks to deny
that venue is proper, and asks the Court to transfer the case
to Utah, where ICON actually has a place of business.
Nautilus claims ICON's “FreeStrider
Elliptical” exercise machine infringes upon four of
Nautilus's patents for “variable stride
technology” in such machines. Nautilus initially
alleged (and ICON admitted) that venue was proper in this
District, because ICON sells its devices to Washington
venue motion was triggered by the Supreme Court's recent
holding that venue for a patent infringement case against a
domestic corporation is proper only where it is incorporated
or where it has committed alleged acts of infringement and
has a “regular and established place of
business.” TC Heartland LLC v. Kraft Foods Group
Brands LLC, No. 16- 341, 2017 U.S. LEXIS 3213 (May 22,
2017). It is undisputed that ICON is not incorporated here
and does not have an established place of business here. It
asks the Court to transfer the case to Utah (where is does
have an established place of business) under 28 U.S.C. §
(the venue provision for patent cases).
sued ICON in May 2016, and TC Heartland was decided
a year later. The Markman hearing in this case is
scheduled for October 13, and in accordance with the
Court's scheduling order, the parties filed a joint claim
chart and pre-hearing statement on August 18- the day after
ICON filed this motion.
determining whether to grant leave to amend under Rule 15,
the Court considers five factors: “bad faith, undue
delay, prejudice to the opposing party, futility of
amendment, and whether the plaintiff has previously amended
the complaint.” United States v. Corinthian
Colleges, 655 F.3d 984, 995 (9th Cir. 2011) (emphasis
added). Among these factors, prejudice to the opposing party
carries the greatest weight. Eminence Capital, 316
F.3d at 1052.
argues that ICON unreasonably delayed bringing its motion,
noting the passage of time between the opinion and the motion
(87 days). It argues that ICON continued to litigate in this
district after TC Heartland, waiving the venue
defect, and that transfer at this late stage would be unduly
prejudicial, because its patents expire in less than four
years and moving the case would delay trial by at least a
denies that its conduct or the passage of time amounts to a
waiver of its venue challenge. The “litigation”
in which it engaged in the interim consisted of stipulations,
a request for a case management conference, and its
court-required participation in drafting the joint statement.
It argues that the impact of TC Heartland was not
immediately known (specifically whether it applied
retroactively), and that it was at the same time awaiting
word from the PTAB about its (unsuccessful) challenge to
Nautilus's patents. Indeed, it had sought a stay while
the PTAB process was ongoing.
argues that in TC Heartland's wake, a number of
cases have held that it was an intervening change of law
excusing or precluding waiver, citing opinions from this
Circuit, this District, and this Court. It points out that
the Oregon District Court recently (September 5) transferred
a similar case after the Markman hearing, after
dispositive motions, and only ten days before trial, because
the defendant did not reside in Oregon, or have a regular,
established place of business there. Like Nautilus, the
plaintiff there argued that the defendant had waived the
venue objection through its litigation conduct and the
passage of time. Indeed, the showing of prejudice to the
plaintiff there was far greater than Nautilus's showing
here. Nevertheless, under § 1406, the Court held that
prejudice to the plaintiff was not a relevant consideration.
Court is not prepared to go quite that far, but it is clear
that any prejudice to Nautilus stems not from ICON's
conduct or inaction, but from TC Heartland and the
Utah Court's calendar. The work that was done in the 87
days between the opinion and motion in preparation for the
Markman hearing was not wasted; the parties can
presumably use the same document in Utah. In any event, the
short delay in bringing the motion did not cause a one year
delay in the trial.
is improper in this District. ICON's Motion to Amend its
answer to so allege is GRANTED, and its
Motion to Transfer is also GRANTED.
case is TRANSFERRED to the District of Utah,
where venue is proper.