IN T H E UNITED STATES DISTMCT COURT FOR THE NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

COOPER LIGHTING, L L C ,

Plaintiff,

C O R D E L I A LIGHTING, INC. and JIMWAY, INC.,

Defendants.

C I V I L ACTION F I L E

NO. l:16-CV-2669-MHC

ORDER

This case comes before the Court on Defendants Cordeha Lighting, Inc.

("Cordelia") and Jimway, Inc. ("Jimway")'s Motion to Dismiss for Improper

Venue in Light of TC Heartland v. Kraft Food Brands Group, or to Transfer

Pursuant to 28 U.S.C. § 1406(a) [Doc. 56] and Defendants' Motion to Stay

Litigation Pending Patent Office Inter Partes Review of Validity of Al l Patents-

Smt[Doc. 68].

I. BACKGROUND

A. Procedural History

On July 22, 2016, Cooper Lighting, LLC ("Cooper") fded smt against

Defendants alleging infringement of patents and stating as a basis for venue "28

U.SC § 1391(b) and 28 U.S.C. § 1400(b), as Defendants reside in this district

and/or wrongful acts giving rise to the Cooper's claims have occurred in this

district as alleged herein." Compl. 6 [Doc. 1]. Defendants answered the

Complaint and denied that venue was proper. Answer ^ 6 [Doc. 17]. Cooper fded

an Amended Complaint, making an identical venue allegation. Am. Compl. ̂ 6

"Doc. 18]. In lieu of answering. Defendants then to fded a partial motion to

dismiss the Amended Complaint, but did not address their original contention that

venue was not appropriate in the motion to dismiss. Motion to Dismiss [Doc. 23].

On April 6, 2017, the Court granted the partial motion to dismiss. Order [Doc. 44].

On April 20, 2107, Defendants answered the Amended Complaint, again denying

venue. Answer to Am. Compl. ̂ 6 [Doc. 50].

On May 22, 2017, the Supreme Court issued a decision in TC Heartland

LLC V. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017). The Court held

that a domestic corporation resides only in its state of incorporation for purposes of

28 U.S.C. § 1400(b). I d at 1517. On June 8, 2017, Defendants fded the instant

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motion to dismiss, contending that in light of TC Heartland, venue is only proper

in the state of their incorporation, Califomia. Defs.' Mem. of Law in Supp. of their

Mot. to Dismiss for Improper Venue in Light of TC Heartland LLC v. Kraft Foods

Group Brands LLC, or to Transfer Pursuant to 28 U.S.C. § 1406(a) ("Defs.' Br.")

[Doc. 56-1] at 9.

On July 26, 2017, Defendants filed an application for inter partes review

("IPR") with the Patent Office challenging the validity of the four patents that are

the subject of the instant dispute. Mem. in Supp. of Defs.' Mot. to Stay Litig.

Pending Patent Office Inter Partes Review of Validity of A l l Patents-in-Suit

("Defs.' Stay Br.") [Doc. 68-1] at 2-4. Shortly afterwards, on August 21, 2017,

Defendants filed a Motion to Stay Litigation Pending Patent Office Inter Partes

Review of Validity of Al l Patents-in-Suit [Doc. 68]. Defendants' application has

been assigned to the Patent Trial and Appeal Board ("PTAB"), and its decision

may narrow or resolve the issues in the litigation. Defs.' Stay Br. at 4-5.

B. Facts Related to Venue

1, Cordelia

Cordelia is listed in the online Whitepages with a phone number of (770)

425-2420 and an address of 844 Livingston Ct. SE, Marietta, GA 30067-8940.

Decl. of Geoffrey K. Gavin ("Gavin Decl.") [Doc. 58-1] ̂ 3. Cads to the phone

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number, i f not answered by a live person, receive a recorded message stating

"[y]ou have reached the Atlanta office of Cordeha Lighting." I d 114. Cordelia has

paid state property taxes on personal property located at the 844 Livingston Court

address since 2010. Id. I f 5. Cordelia does not own, but leases the property located

at 844 Livingston Court. Decl. of Jessie King ("King Decl.") [Doc. 62-2] 6-7.

The property at 844 Livingston Court shows signage for Cordelia Lighting outside

the entrance to the parking lot, on front door ofthe building, and on parking

spaces. Gavin Decl. I f 11.

The Atlanta location was created "exclusively for use as a convenience

location for a single customer. The Home Depot. . . ." King Decl. I f 8. Other than

meetings with The Home Depot, no other customers are invited to the location, and

it is not a retail outlet. Id. I f 12. Products to Georgia customers are not shipped

through 844 Livingston Court; moreover, no invoices are created or sales booked

through that location. I d I f l f 13-14. There are two Cordelia employees present at

the location, both with sales roles directed to The Home Depot. Id. I f 8.

2. Jimway

Jimway sells lighting fixtures to customers in Georgia. Answer to Am.

Compl. I f 12. Jimway has no employees located in the state of Georgia. King

Decl. I f 9. Cordelia and Jimway are separate corporate entities, with separate

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financial statements and balance sheets. Id. Tf 15. Jimway and Cordelia share a

common officer. Gavin Decl. I f 8.

II . L E G A L STANDARD

A. Standard for Venue

Cases for patent infringement "may 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). A

corporate defendant resides only in its state of incorporation for purposes of

Section 1400(b). TC Heartland, 137 S. Ct. at 1517. To determine "whether a

corporate defendant has a regular and established place of business in a district, the

appropriate inquiry is whether the corporate defendant does its business in that

district through a permanent and continuous presence there . . . ." In re Cordis

Corp., 769 F.2d 733, 737 (Fed. Cir. 1985).̂

A defendant may waive its privilege to contest venue i f it omits the objection

from a responsive pleading. FED. R. CIV. P. 12(h); see also Lerov v. Great W.

United Corp., 443 U.S. 173, 180 (1979). "Although, under the Federal Rules of

' Substantive decisions of the Federal Circuit dealing with patent matters are binding on this Court. 28 U.S.C. § 1295(a)(1); see also Catch Curve, Inc. v. Integrated Glob. Concepts, Inc., No. 1:06-CV-2199-CC, 2009 WL 10672752, at *1 (N.D. Ga. Feb. 18, 2009) (citing Phonometrics, Inc. v. Westin Hotel Co., 350 F.3d 1242, 1246-47 (Fed. Cir. 2004)).

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Civil Procedure, an amended complaint supersedes the initial complaint and

becomes the operative pleading in the case, the filing of an amended complaint

does not automatically revive all defenses or objections that the defendant may

have waived in response to the initial complaint." Krinsk v. SunTrust Banks, Inc.,

654 F.3d 1194, 1202 (11th Ch. 2011) (quotations and citation omitted). However,

one exception to waiver occurs i f a defense was not "available to the party" at the

time the responsive pleading was made. FED. R. CiV. P. 12(h)(1)(A). See also

Curtis Pub. Co. v. Butts, 388 U.S. 130, 143 (1967) (holding "effective waiver must

. . . be one of a known right or privilege.") (citation and quotations omitted). "A

defense is available unless its legal basis did not exist at the time of the answer or

pre-answer motion, or the complaint does not contain facts sufficient to indicate

that a defense was possible." Gilmore v. Palestinian Interim Self-Gov't Auth., 843

F.3d 958, 964 (D.C. Cir. 2016), cert, denied. No. 16-1359, 2017 WL 1955929

(U.S. Oct. 2, 2017); see also Artistic Stone Grafters, Inc. v. Safeco Ins. Co. of Am.,

No. CV 108-153, 2010 WL 317472, at *3 (S.D. Ga. Jan. 25, 2010) (holding no

waiver occurred where venue defense was raised after it became applicable to the

case).

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B. Standard for a Stay

The party seeking a stay bears the burden of showing that a stay is

appropriate. See Automatic Mfg. Sys., Inc. v. Primera Tech., Inc., No. 6:12-CV-

1727, 2013 WL 1969247, at *1 (M.D. Fla. May 13, 2013) (citing Landis v. N. Am.

Co., 299 U.S. 248, 255 (1936)). "Courts have inherent power to manage then

dockets and stay proceedings, including the authority to order a stay pending

conclusion of a PTO reexamination." Ethicon, Inc. v. Quigg, 849 F.2d 1422,

1426-27 (Fed. Cir. 1988) (citation omitted). Several courts have noted the benefits

of staying infringement litigation pending an IPR:

[a]ll prior art presented to the Court wil l have been first considered by the PTO, with its particular expertise[;] Many discovery problems relating to prior art can be alleviated by the PTO examination[;] In those cases resulting in effective invalidity of the patent, the suit will likely be dismissed[;] The outcome of the reexamination may encourage a settlement without the further use of the Court[;] The record of reexamination would likely be entered at trial, thereby reducing the complexity and length of the litigation[;] Issues, defenses, and evidence will be more easily limited in pretrial conferences after a reexamination[; and] The cost will likely be reduced both for the parties and the Court.

Tomco^ Equip. Co. v. Se. Agri-Svs., Inc., 542 F. Supp. 2d 1303, 1307 (N.D. Ga.

2008) (alterations in original) (quoting Datatreasurv Corp. v. Wells Fargo & Co.,

490 F. Supp. 2d 749, 754 (E.D. Tex. 2006)). Although there are many potential

benefits to a stay pending the outcome of an IPR proceeding, "the Court should not

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ignore the potential difficulties" including "the possible length o f the review, and

the fact that the IPR process "only considers the validity of the patent with regard

to prior art." I d (internal citations omitted).

III . VENUE

Because TC Heartland was decided after their Motion to Dismiss was filed,

Defendants contend that they have not waived the venue defense. Cooper responds

that because Defendants could have relied on the case law which formed the basis

for the decision in TC Heartland, they have waived the venue defense. Even i f the

defense is not waived. Cooper contends that Defendants have "committed acts of

infringement and ha[ve] a regular and established place of business" in the

Northem District of Georgia. PL's Opp'n to Defs.' Mot. to Dismiss for Improper

Venue in Light of TC Heartland v. Kraft Food Brands Group, or to Transfer

Pursuant to 28 U.S.C. § 1406(A) ("PL's Br.") [Doc. 58] at 2.

A plaintiff must show that venue is proper as to each defendant. Cook Grp.,

Inc. V. Purdue Research Found., No. IP 02-0406-C-M/S, 2002 WL 1610951, at *2

(S.D. Ind. June 24, 2002); Toombs v. Goss, 768 F. Supp. 62, 65 (W.D.N.Y. 1991).

See also Lvttle v. United States, No. l:10-CV-3302-CAP, 2011 WL 13187170, at

^2 (N.D. Ga. Oct. 6, 2011) (holding in non-patent arena that "when a complaint

states multiple claims against multiple parties, the plaintiff has the burden of

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establishing that venue is proper as to each claim."). Accordingly, the Court must

address whether each Defendant has waived a challenge to venue and, i f not,

whether venue is appropriate as to each Defendant.

A. Did Defendants Waive their Venue Defense?

The issue of whether Defendants have waived a challenge to venue turns on

whether the defense was "available" to them at the time the Motion to Dismiss was

fded on October 24, 2016, prior to the Supreme Court's decision in TC Heartland.

The answer to this question turns on whether (1) Defendants could have asserted

an improper venue defense prior to TC Heartland, and (2) whether TC Heartland

effected a change in the law.

1. Whether Defendants had a Venue Defense Prior to TC Heartland

Prior to TC Heartland, a corporation was determined to "reside" for

purposes of 28 U.S.C. § 1400 where it would be subject to personal jurisdiction.

VE Holding Corp. v. Johnson Gas Apphance Co., 917 F.2d 1574, 1579 (Fed. Ch.

1990). Neither Jimway nor Cordelia objected to venue or personal jurisdiction in

^ Defendants also contend that they did not waive the venue defense because they included it in their answer to the amended complaint although they failed to assert it in a previous Rule 12(b) motion to dismiss. Defs.' Br. at 12. As Cooper correctly points out (PL's Br. at 3-4), an amended complaint does not revive a waived venue defense. Krinsk, 654 F.3d at 1202.

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the Motion to Dismiss; accordingly, the Court must examine whether such an

argument would have been futile.

Under the applicable Federal Circuit law, "[djetermining whether personal

jurisdiction exists over an out-of-state defendant involves two inquiries: whether

the forum state's long-arm statute permits service of process, and whether the

assertion of personal jurisdiction would violate due process." Fusionbrands, Inc. v.

Suburban Bowerv of Suffem, Inc., No. l:12-CV-0229-JEC, 2013 WL 5423106, at

*4 (N.D. Ga. Sept. 26, 2013) (citing Avocent Huntsville Corp. v. Aten Int 'l Co.,

Ltd., 552 F.3d 1324, 1329 (Fed. Ch. 2008).) Where there has been no evidentiary

hearing, a plaintiff need only make a prima facie showing that defendants are

subject to personal jurisdiction. I d

Georgia's long-arm statute reaches those nonresidents whose conduct brings

them within the coverage of one of the six subsections of O.C.G.A. § 9-10-91, only

one of which is relevant here:

A court of this state may exercise personal jurisdiction over any nonresident. . ., as to a cause of action arising from any ofthe acts . . . enumerated in this Code section, in the same manner as i f he or she were a resident of this state, i f in person or through an agent, he or she:

(1) Transacts any business within this state[."

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O.C.G.A. § 9-10-91(1). A party "transacts business" in Georgia within the

meaning of the statute i f (1) it purposefully does some act or consummates some

transaction in the state, (2) the cause of action arises from or is connected with that

transaction, and (3) the exercise of jurisdiction by a court does not offend

traditional notions of faimess and substantial justice. Aero Toy Story, LLC v.

Grieves, 279 Ga. App. 515, 517-18 t2006); see also Diamond Crvstal Brands, Inc.

V . Food Movers I n f l , Inc., 593 F.3d 1249, 1260 n . l l (11th Ch. 2010). Although

the Supreme Court of Georgia adopted a literal interpretation ofthe statute's

"transacts any business" prong in Innovative Clinical & Consulting Services, LLC

V . First National Bank of Ames, it nevertheless held that courts must construe this

prong "as reaching only to the maximum extent permitted by procedural due

process." 279 Ga. 672, 675 (2005) (intemal quotations and citation omitted).

Under the Due Process Clause of the Fourteenth Amendment, a court may

only exercise personal jurisdiction over a nonresident defendant i f it has

established "certain minimum contacts with [the forum] such that the maintenance

of the suit does not offend traditional notions of fair play and substantial justice."

Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)

(quoting Int ' l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (intemal

quotation marks omitted)). Importantly, the defendant's contacts with the forum

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state must be sufficient to give it fair warning that it could be haled into court

there. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). A defendant is

said to have fair warning i f it "has purposefully directed [its] activities at residents

of the forum . . . and the litigation results from alleged injuries that arise out of or

relate to those activities." Id. at 472 (internal quotation marks and citations

omitted). I f the court decides the defendant purposefully established minimum

contacts with the forum state, it must then consider other factors to determine i f the

assertion of personal jurisdiction would comport with "fair play and substantial

justice." I d at 476 (quoting I n f l Shoe Co., 326 U.S. at 320).

With respect to Cordelia, the Court finds that the facts outlined above are

sufficient to satisfy Georgia's long-arm statute and federal due process concerns,

as it sells to Georgia customers, the patent infringement case arises out of those

sales, and it has a physical location and employees in Georgia. Thus, any

argument Cordelia would have made that it is not subject to personal jurisdiction

(and therefore venue) in Georgia would have been frivolous.

With respect to Jimway, its only apparent cormection to Georgia is that it

admits to selling lighting fixtures to customers in Georgia. However, Georgia

courts have held that selling allegedly infringing products to customers in Georgia

is enough to satisfy Georgia's long-arm statute and federal due process concems.

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See Sarvint Techs., Inc. v. Omsignal Inc., 161 F. Supp. 3d 1250, 1262-63 (N.D.

Ga. 2015) ("multiple courts have found personal jurisdiction over a patent

defendant based on a single sale or minimal sales of the accused product,

particularly when it is sold directly by the defendant into the forum.") (collecting

cases). Accordingly, this Court finds that Jimway could not have reasonably

objected to personal jurisdiction (and therefore venue), and any argument to that

effect also would have been frivolous.

2. Whether T C Heartland Effected a Change in the Law

Finding that Defendants could not have stated a venue defense under the

existing case law at the time they fded the Motion to Dismiss, this Court now tums

to whether TC Heartland effected a change in the law sufficient to excuse waiver.

This Court is not the first to struggle with this question. To date, the Federal

Circuit has been presented with the question three times, each in the form of a writ

of mandamus from a district court's holding that venue had been waived. In each

case, the Federal Circuit has declined to address the merits of the question, instead

finding no abuse of discretion sufficient to satisfy the writ of mandamus standard

for relief

Without necessarily agreeing with the district court's conclusion that the Supreme Court's decision in TC Heartland did not effect a change in the law, we nonetheless find that the district court did not clearly abuse its discretion in finding that Hughes waived its right to move to

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transfer for improper venue. Our ruling is based largely on the fact that Hughes filed its motion only after the TC Heartland case was decided by the Supreme Court and less than two months before trial.

In re Hughes Network Svs., LLC, No. 2017-130, 2017 WL 3167522, at *1 (Fed.

Ch. July 24, 2017). See also In re Nintendo of Am. Inc., No. 2017-127, 2017 WL

4581670, at =̂ 1-2 (Fed. Ch. July 26, 2017) (declining to decide whether TC

Heartland had effected a change in the law, holding that petitioner had not satisfied

the exacting standards for a writ of mandamus and upholding district court

decision finding waiver of venue defense had occurred where case was three

months before trial); In re Sea Rav Boats, Inc., 695 F. App'x 543, 544 (Fed. Cir.

2017) (finding writ of mandamus standard not filled where venue objection was

made two weeks before trial). However, unlike the posture of this case, each of

these decisions involved cases where trial was imminent. Compare Ironburg

Inventions Ltd. v. Valve Corp., No. 1:15-CV-4219-TWT, 2017 WL 3307657, at *3

(N.D. Ga. Aug. 3, 2017) (holding that "TC Heartland is an intervening change in

the law. Valve did not waive the defense of improper venue by failing to assert it

in its prior Motions to Dismiss.").

In 1948, Congress passed 28 U.S.C. § 1400; subpart (b) has not changed

since its enactment. See 28 U.S.C. § 1400(b) (1948). In 1957, the Supreme Court

held that 28 U.S.C. § 1400, not the general venue provision, 28 U.S.C. § 1391, was

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the exclusive venue provision to be used in patent infringement cases. Fourco

Glass Co. V . Transmirra Prod. Corp., 353 U.S. 222, 227-28, (1957). In 1988,

Congress amended the general venue statute to add that "[f]or purposes of venue

under this chapter, . . . [a] corporation shall be deemed to reside in any district in

that State within which its contacts would be sufficient to subject it to personal

jurisdiction i f that district were a separate State " 28 U.S.C. § 1391 (1988).

Two years later, the Federal Circuit held that the 1988 amendments also applied to

Section 1400(b) because of the language "[f]or purposes of venue under this

chapter . . . ." was meant to include Section 1400(b). VE Holding Corp, 917 F.2d

at 1579. "Congress could readily have added 'except for section 1400(b),' i f that

exception, which we can presume was well known to the Congress, was intended

to be maintained." Id. This was the legal landscape when Defendants fded their

motion to dismiss.

Cooper contends that the TC Heartland case was not an intervening change

in the law because the case itself "merely affirmed legal precedent available to

Defendants since at least 1957." PL's Br. at 5-6. Cooper points to the Supreme

Court's language that: "Congress has not amended § 1400(b) since Fourco, and

neither party asks us to reconsider our holding in that case." I d at 5 (citing TC

Heartland, 137 S. Ct. at 1520). But simply because Section 1400(b) was unaltered

15

does not mean that the statute could not have been later affected by the

amendments to Section 1391. That was the question the Federal Circuit was asked

to decide in VE Holding, and a question that could not have been answered by

Fourco (which was decided thirty years before the 1988 amendments). Indeed, the

VE Holding court viewed it as a matter of "first impression." VE Holding, 917

F.2d at 1579. VE Holding was binding precedent on all district courts, including

this Court, until it was abrogated by the TC Heartland decision. And simply as a

matter of common sense, i f Fourco was "controlling law" as Cooper would have

this Court believe, there would have been no need for the Supreme Court to

consider the matter and issue its opinion in TC Heartland.

Accordingly, this Court concludes that TC Heartland was an intervening

change in the law. This case is still in its initial phase and trial is not imminent,

therefore, the considerations weighed by the Federal Circuit in the recent

mandamus cases are not applicable.

B. Did Cooper Have to Affirmatively Plead Venue?

Defendants contend that venue is inappropriate in this Court because Cooper

failed to plead in the Amended Complaint that Defendants have committed acts of

infringement and have a regular and established place of business in the Northern

District of Georgia. Cooper responds that "[i]t is well-established law that 'a

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plaintiff is not required to include any venue allegations [in its complaint] to avoid

a dismissal under Rule 12(b)(3).'" PL's Br. at 13-14 (citing Elite Flower Servs.,

Inc. V . Elite Floral & Produce, LLC, No. 13-CV-21212-UU, 2013 WL 12095134,

at *5 (S.D. Fla. June 18, 2013)). The Court agrees with Cooper.

Rule 8 requires that a plaintiffs complaint include only the following: "(1) a

short and plain statement of the grounds for the court's jurisdiction . . . ; (2) a short

and plain statement of the claim showing that the pleader is entitled to relief; and

(3) a demand for the relief sought. . . ." FED. R. CIV. P. 8. There is no requirement

that venue be pled; rather, when determining venue, "pleadings need not be

accepted as true, and facts outside the pleadings may be considered." Estate of

Myhra v. Royal Caribbean Cruises, Ltd., 695 F.3d 1233, 1239 n.22 (11th Ch.

2012) (quoting Doe 1 v. AOL LLC, 552 F.3d 1077, 1081 (9th Cir. 2009)).

C. Is Venue Is Proper in the Northern District of Georgia?

Section 1400(b) places venue "where the defendant resides,̂ or where the

defendant has committed acts of infringement and has a regular and established

place of business." Cooper contends that venue is proper under the statute's

second test, as Defendants have committed acts of infringement and have a regular

^ Cooper concedes that i f venue has not been waived, then venue is not proper under the first test as Defendants are incorporated in California, meaning they reside in California based upon TC Heartland. PL's Br. at 8-9.

17

and established place of business in the Northern District of Georgia. PL's Br. at 9.

Jimway and Cordelia admit in the amended answer that they sell lighting fixtures

within the state of Georgia. Answer to Am. Compl. I f ^ f 11-12. Thus, the only

dispute is over whether Jimway and Cordelia have a regular and established place

of business in the Northern District of Georgia.

1. Jimway

Cooper's brief contains detailed factual allegations purporting to establish

that Cordelia has a regular and established place of business in the Northem

District of Georgia. PL's Br. at 9-13. However, neither Cooper's brief nor the

Amended Complaint allege that Jimway has a regular and established place of

business in the Northern District of Georgia. A plaintiff must establish that venue

is proper as to each defendant. Lyttle, 2011 WL 13187170, at *2.

While dismissal against one defendant "may not be an efficient resuh, the

Supreme Court has specifically held that Section 1400(b) must be strictly followed

. . . . I f the requirements for venue under Section 1400(b) are not met, the Court is

constrained to dismiss the action, even where the result is inefficient or unfair."

CVI/Beta Ventures, Inc. v. Tura LP, 905 F. Supp. 1171, 1201 (E.D.N.Y. 1995),

judgment rev'd in part, vacated in part, 112 F.3d 1146 (Fed. Cir. 1997) (citing

SchneU v. Eclmch & Sons, 365 U.S. 260, 262-64 (1961)).

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A district court cannot dispense witli the explicit patent venue requirement which Congress has created. Congress has not created an exception to § 1400(b) in cases involving multiple defendants or conspiring defendants. I have no authority to create such an exception to the statute and will not do so now.

Toombs, 768 F. Supp. at 65."̂ Cooper fails to allege facts which show that Jimway

has a regular and established place of business in the Northern District of Georgia;

therefore, this Court lacks venue as to Jimway.

2. Cordelia

The Federal Circuit recently issued an opinion explaining in detail the

requirements of establishing a "regular and established place of business" for

venue purposes. See In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017). To

determine whether a "regular and established place of business" exists, the Federal

Circuit explained that: "(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. I f any statutory requirement is not satisfied, venue is improper under

§ 1400(b)." Id. at 1360. Cordelia admits that the first prong is satisfied, as its

location at 844 Livingston Court is a "physical presence." Reply in Supp. of Defs.'

The court in Toombs also suggested that a plaintiff need not show venue is proper for each defendant where the defendant lacking venue was intertwined with or controlled by a defendant where proper venue was shown. Toombs, 768 F. Supp. at 64. Cooper has made no similar allegations here, but rather alleges "Defendant Jimway is affiliated or associated with Cordelia." Am. Comp. ̂ 12.

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Mot. to Dismiss for Improper Venue in Liglit of TC Heartland, or to Transfer

Pursuant to 28 U.S.C. § 1406(a) [Doc. 62] ("Defs.' Reply Br.") at 11.

To determine the second prong, whether the business is "regular and

established," the Federal Circuit has provided the following guidance. With

respect to the word "regular," the court has explained:

"S]poradic activity cannot create venue. A regular place of business is, obviously, a place where such business is carried on regularly and not merely temporarily, or for some special work or particular transaction. Indeed, the doing of a single act pertaining to a particular business will not be considered engaging in or carrying on the business; yet a series of such acts would be so considered.

In re Cray Inc., 871F.3datl362 (citations omitted, alterations accepted). With

respect to the word "established," the Federal Circuit explained that the place of

business cannot be transient. Id. at 1363. For example, "[w]here the defendant's

establishment in the district was just a location for a particular transaction, the

necessary element of permanency is lacking." Id. (alterations accepted, citations

and quotations omitted). "On the other hand, a five-year continuous presence in

the district demonstrates that the business was established for purposes of venue."

Id. (alterations accepted, citations and quotations omitted). In the case at hand,

Cordelia has been present in Georgia continuously for at least seven years.

Although the office is for the benefit of only one customer. The Home Depot, the

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office is not temporary or establislied solely for a particular transaction.

Accordingly, the Court finds the office is "regular and established."

For the third prong, the place of business must be that of the defendant (and

not an employee). Id. at 1363.

Relevant considerations include whether the defendant owns or leases the place, or exercises other attributes of possession or control over the place.

Marketing or advertisements also may be relevant, but only to the extent they indicate that the defendant itself holds out a place for its business.

Potentially relevant inquiries include whether the defendant lists the alleged place of business on a website, or in a telephone or other directory; or places its name on a sign associated with or on the building itself But the mere fact that a defendant has advertised that it has a place of business or has even set up an office is not sufficient; the defendant must actually engage in business from that location. In the final analysis, the court must identify a physical place, of business, of the defendant.

Id. 1363-64. Applied to the facts of this case, the place of business, 844 Livingston

Court, is a location of Cordelia. While Cordelia only leases the location, there is

signage to show that it is a Cordelia location, and its answering service identifies

the premises as a Cordelia location. Even though it may not serve as a general

retail location, Cordelia actively engages in business from that location, albeit for

one large customer. Accordingly, the Court finds Cordelia has a "regular and

21

established place of business" such that venue under 28 U.S.C. § 1400(b) is

appropriate.

D. Whether Transfer is Appropriate

Defendants ask the Court to transfer the action in accordance with 28 U.S.C.

§ 1406 to the United States District Court for the Central District of Califomia,

where both Defendants are headquartered and venue is appropriate because both

reside in Cahforniaunder 28 U.S.C. 1400(b). Defs.' Br. at 12-13. Section 1406(a)

provides "[t]he district court of a district in which is fded a case laying venue in

the wrong division or district shall dismiss, or i f it be in the interest of justice,

transfer such case to any district or division in which it could have been brought."

As venue is lacking as to Jimway in the Northern District of Georgia, this is the

appropriate resolution of the matter as to Jimway, but not as to Cordelia.

There are two options for the Court with respect to Cordelia. One is for the

Court to transfer to the Central District of California under 28 U.S.C. § 1404(a),

"for the convenience of parties and witnesses, in the interest of justice . . . ."

Another is for the Court to sever the action by each Defendant under Federal Rule

of Civil Procedure 21, which would allow Cooper to proceed against Cordelia in

the present action, but transfer the action against Jimway to the Central District of

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California. The Court is unable to assess whether transfer or severance is

appropriate without additional briefing from the parties addressing these issues.

IV. STAY PENDING INTER PARTES R E V I E W

Finally, Defendants contend that a stay is proper because the case is in its

early stages and PTAB's decision may narrow the issues between the parties.

Defs.' Stay Br. at 6-9. Cooper agrees that a stay for the first phase is appropriate,

but opposes a stay for the entirety of the IPR process. PL's Opp'n-in-Part to Defs.'

Mot. to Stay Litig. Pending Patent Office Inter Partes Review of Validity of A l l

Patents-in-Smt ("PL's Stay Br.") [Doc. 76] at 1. The Court finds that a stay is

appropriate through at least PTAB's institution decision. Because the PTAB's

institution decision in the IPRs is estimated to occur mid-February 2018, the

parties shall provide a status report to the Court as to the status of the PTAB's

decision on March 1, 2018. The Court wil l then reassess the appropriateness ofa

continuance of the stay for the entirety of the IPR process. The entry of the stay

shall not apply to the additional briefing with respect to the venue issue.

V. CONCLUSION

Accordingly, it is hereby ORDERED that the parties shall file supplemental

briefs on the question of whether this Court should sever the action and transfer

only the case against Jimway to the United States District Court for the Central

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District of Califomia or transfer the entire action to the Central District of

California for the convenience of parties and witnesses and in the interests of

justice. Cooper shall fde its supplemental brief no later than November 27, 2017;

Defendants shall have ten (10) days from the date of Cooper's filing to file its

response, and Cooper shall have seven (7) days from the date of Defendants' filing

to file any reply.

It is further ORDERED that Defendants' Motion to Stay Litigation Pending

Patent Office Inter Partes Review of Validity of A l l Patents-in-Suit [Doc. 68] is

GRANTED until further order ofthe Court. With the exception ofthe

supplemental briefing ordered herein and the Court's decision as to transfer, all

other proceedings in this case are hereby STAYED.

It is further ORDERED that the parties file a joint status report no later than

March 1, 2018, advising the Court as to the status of the PTAB's institution

decision.

I T IS SO ORDERED this 13th day of November, 2017.

MARK H. COHEN United States District Judge

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