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Unity Opto Technology Co., Ltd. v. Lowe's Home Centers, LLC

United States District Court, W.D. North Carolina

May 4, 2018

UNITY OPTO TECHNOLOGY CO., LTD., Plaintiff,
v.
LOWE'S HOME CENTERS, LLC and L G SOURCING, INC., Defendants.

          OPINION & ORDER

          JAMES D. PETERSON DISTRICT JUDGE.

         Plaintiff Unity Opto Technology Co., Ltd. is suing defendants Lowe's Home Centers, LLC and L G Sourcing, Inc. for infringement of four patents that relate LED light fixtures. Defendants have moved to transfer or dismiss the case under 28 U.S.C. § 1406 for improper venue or, in the alternative, to transfer the case under 28 U.S.C. § 1404. Dkt. 17. For the reasons explained below, the court will grant the motion to transfer under § 1406.

         ANALYSIS

         In a case such as this one brought under the Patent Act, venue is proper in a judicial district if the defendant: (1) “resides” in that district; or (2) “has committed acts of infringement” and has “a regular and established place of business” in that district. 28 U.S.C. § 1400(b); Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 229 (1957). This court has held that the plaintiff has the burden of proving that venue is proper under § 1400(b), Niazi v. St. Jude Med. S.C., Inc., No. 17-cv-183, 2017 WL 5159784, at *2-3 (W.D. Wis. Nov. 7, 2017), and neither side challenges that conclusion, so there is no need to consider that question again.

         Unity does not contend that either defendant “resides” in the Western District of Wisconsin, so the court need not consider that question either. And the parties assume that Unity has adequately alleged that both defendants have committed acts of infringement in this district. The issue is whether both defendants have “a regular and established place of business” here.

         Defendants concede that Lowe's Home Centers has a place of business in this district in the form of a retail store in Plover, Wisconsin. But defendants deny that L G Sourcing has a place of business here and they contend that the case should be transferred to the Western District of North Carolina as to both defendants because venue is proper there as to both defendants and it would be inefficient to sever the case. Unity does not deny that venue would be proper in North Carolina and it does not object to defendants' request to transfer the case as to both defendants if venue is not proper as to L G Sourcing. So the only question is whether L G Sourcing has “a regular and established place of business” in the Western District of Wisconsin.

         The Court of Appeals for the Federal Circuit recently provided guidance on the question of how district courts should determine whether a defendant has a regular and established place of business in a particular district. In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017). The court identified three requirements for satisfying § 1400(b): (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. If any statutory requirement is not satisfied, venue is improper under § 1400(b). Cray, 871 F.3d at 1360.

         Unity does not dispute the declaration of David Green, the vice president of L G Sourcing, that L G Sourcing “does not own, lease, maintain, or operate any facilities in the Western District of Wisconsin” and “does not have any employees who reside” here. Dkt. 18, ¶¶ 8-9. Instead, Unity's position is that the retail store for Lowe's Home Centers should qualify as a place of business for L G Sourcing because of the close relationship between the two companies.

         Unity relies on the following allegations for treating both defendants as the same for the purpose of determining whether L G Sourcing has a place of business in this district:

• both defendants are subsidiaries of Lowe's Companies;
• L G Sourcing sources products for Lowe's Home Stores;
• Lowe's Home Stores “must work closely with [L G] Sourcing to monitor supply chain and manage customer specifications, monitor supplier product performance, and address product quality issues so that its warehouse inventory is continuously stocked, ” Dkt. 28, at 7;
• a job announcement for “Lowes” shows that the company is seeking a “millwork specialist” in Janesville, Wisconsin;
• Unity's infringement allegations against both defendants relate to the same patents and the ...

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