Fed. Circ. Says Victoria’s Secret Online Business Can’t Be Sued in Texas

In Andra Group v. Victoria’s Secret, the U.S. Court of Appeals for the Federal Circuit upheld the Eastern District of Texas’ ruling that an online subsidiary of Victoria’s Secret cannot be sued for patent infringement in the state. Andra Group claimed Victoria’s Secret’s mobile and website management division infringed its patent for a virtual showroom. Victoria’s Secret moved to dismiss the suit for improper venue, claiming its online subsidiaries “did not have regular and established places of business in the district.” World IP Review interviewed Finnegan partner Karthik Kumar for his thoughts on the decision.

Karthik said, “The Federal Circuit decision reaffirms Supreme Court precedent against a broad reading of the federal venue statute. It also shows that courts will not easily consider employees of a subsidiary to be agents of the parent or other subsidiaries. Instead, the patentee must adduce specific facts showing that the subsidiary’s employees are conducting the parent’s or other subsidiaries’ business under their direction or control.”

Karthik also commented on the impact the ruling could have on future litigation. “To impute a subsidiary’s place of business to the parent or another subsidiary, the patentee must provide specific facts showing that those companies ratified the location by actually engaging in business from that location. As a practical result of the decision, companies can strategically use corporate structure to shelter themselves from having to defend patent infringement lawsuits in known patentee-friendly jurisdictions.”

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