Marshall, We Have a Problem: Texas Rocket-Docket Loses Luster

In In re Cray, Inc., No. 2017-129, the Federal Circuit granted a petition for a writ of mandamus, directing the Eastern District of Texas to transfer a case to the Western District of Washington because the defendant lacked “a regular and established place of business” in Texas.

By statute, venue in a patent case is proper either where the defendant resides or where the defendant infringes and has a regular and established place of business. Arguing that patent owner Raytheon had sued it in an improper venue, Cray, Inc. sought a transfer. The district court denied the transfer, finding Cray had a regular and established place of business in the district because Cray had allowed an employee to work remotely from his home within the district.  

Cray petitioned for a writ of mandamus. Considering the issue, the Federal Circuit identified three requirements for a defendant to have a regular and established place of business: (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.

Applying these factors to Cray, the Federal Circuit found that Cray did not have a regular and established place of business in the Eastern District of Texas because its employee’s home was not a place of the defendant. In making its decision, the Federal Circuit noted that Cray did not own, lease, or rent its employee’s home; had not required its employee to maintain a location in the district; and had not selected the home’s location or stored inventory or conducted demonstrations there. Because the three factors were not satisfied, the Federal Circuit ordered a change in venue.