The Western District Of Texas Denies Motion To Transfer Based On Improper Venue As To Holding Company Defendant
On September 16, 2022, Judge Albright of the Western District of Texas denied three related Defendants’ motion to transfer venue, under 28 U.S.C. § 1404(a), from the Western District of Texas to the Northern District of California, on the grounds that venue in California would be improper for one of the moving Defendants, a holding company. MOV-ology LLC v. BigCommerce Holdings, Inc. et al, Case No. 6-22-cv-00084 (WDTX).
Defendants BigCommerce Holdings, Inc. (“Holdings”), BigCommerce Pty. Ltd., and BigCommerce, Inc., brought a motion to transfer venue from the Western District of Texas to the Northern District of California pursuant to Section 1404(a). Section 1404(a) provides that, “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.”
“The preliminary question under § 1404(a) is whether a civil action ‘might have been brought’ in the [transfer] destination venue.” In re Volkswagen, Inc., 545 F.3d 304, 312 (5th Cir. 2008) (“Volkswagen II”). The Court found that, in an action with multiple defendants, such as this, “venue and jurisdiction requirements must be met as to each defendant.” Magnacoustics Inc. v. Resonance Tech Co., No. 97-1247, 1997 U.S. App. LEXIS 26498, at *3-4 (Fed. Cir. Sept. 25, 1997).
With respect to venue, a claim for patent infringement must be brought “in the judicial district where the defendant resides” or “where the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. § 1400(b). Under the first prong, “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.” TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514, 1517 (2017). Under the second prong, there are three requirements, each of which must be met: “(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.” In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017).
Defendants admitted that Holdings is a Delaware corporation with no employees, no real estate, and no lease agreements in California, and that Holdings conducts no business anywhere. Therefore, the Court found that venue in the Northern District of California would be improper, and denied the motion to transfer.
While Defendants argued that Holdings is “an irrelevant party,” the Court stated that Defendants should have first moved to sever or dismiss Holdings before moving to transfer.