Choice of Forum and Non-Practicing Entities

May 13, 2013, 10:02 AM

When a patent infringement litigant is choosing a forum the court in which the lawsuit will be filed it is important to remember that in analyzing the propriety of venue, district courts will look principally to four factors: (1) the plaintiffs initial choice of venue; (2) witness convenience and access; (3) the convenience of the parties; and (4) the interests of justice. JTH Tax, Inc. v. Lee, 482 F. Supp. 2d 731, 736 (E.D. Va. 2007). Although all four factors are important, the first factor, a plaintiffs choice of forum, is typically given substantial weight. However, the weight a court ultimately chooses to give this choice may vary depending on the significance of the contacts between the venue chosen by plaintiff and the underlying cause of action. Pragmatus AV, LLC v. Facebook, Inc., 769 F. Supp. 2d 991, 994-95 (E.D. Va. 2011).

Specifically, in patent infringement cases, the weight given to a plaintiffs choice of forum may diminish if plaintiff is a non-practicing entity and its sole activity in the forum is the enforcement of its intellectual property rights. The Eastern District of Virginia has defined a non-practicing entity as an entity that does not research and develop new technology, but rather acquires patents, licenses the technology, and sues alleged infringers. Id. at 995. The narrow reach of this non-practicing entity definition can be seen in a recent opinion issued by a Norfolk district court. The district court held that even where an entity had only one employee, no formal office location (outside of the employees residence), and did not engage in any manufacturing activities in the forum, substantial weight should still be given to plaintiffs choice of forum since the entitys sole employee was actively engaged in . . . research and development operations [within the forum] on a full-time basis. Virginia Innovation Sciences Inc. v. Samsung Electronics Co. Ltd., No. 2:12cv548, 2013 U.S. Dist. LEXIS 31626 (Davis) (E.D. Va. March 6, 2013). Therefore, before choosing to file in the Eastern District of Virginia, a plaintiff should consider whether its chosen forum has significant contacts with the underlying action while keeping in mind that these contacts need not be as extensive as a formal manufacturing operation but must include something more than the mere enforcement of intellectual property rights. --Lauren Tallent Rogers