Federal Circuit: Remote Workers Support Patent Venue

The Federal Circuit has denied a petition for a writ of mandamus seeking to direct the district court to dismiss or transfer the underlying case based on improper venue, finding that remote workers living in the district can satisfy the venue statute. “Work from home” (WFH) has boomed during the COVID-19 pandemic. According to the Pew Research Center,

Nearly two years into the COVID-19 pandemic, roughly six-in-ten U.S. workers who say their jobs can mainly be done from home (59%) are working from home all or most of the time. The vast majority of these workers (83%) say they were working from home even before the omicron variant started to spread in the United States, according to a new Pew Research Center survey. This marks a decline from October 2020, when 71% of those with jobs that could be done from home were working from home all or most of the time, but it’s still much higher than the 23% who say they teleworked frequently before the coronavirus outbreak.

In In re Monolithic Power Systems, Inc., Bel Power sued Monolithic in the United States District Court for the Western District of Texas, claiming that it infringes Bel Power’s patents by selling certain power modules to original equipment manufacturers (OEMs) and other distributors and customers that use the products in their own electronic devices. The Western District of Texas is the favorite jurisdiction for patent lawyers to file new lawsuits. According to Reuters, one judge in the district (a former patent litigator) “has been criticized by some for policies said to be overly friendly to so-called "patent trolls" that generate revenue by suing over patents, and for allegedly soliciting patent plaintiffs to sue in his court.” As the court in the Monolithic case noted,

Monolithic moved to dismiss or transfer for lack of venue under 28 U.S.C. § 1406(a) and Federal Rule of Civil Procedure 12(b)(3), arguing that, as a Delaware corporation, it does not “reside” in the Western District within the meaning of 28 U.S.C. § 1400(b); that it does not own or lease any property in that district; and that the homes of four fulltime remote employees in the Western District identified in the complaint to support venue do not constitute a “regular and established place of business” of Monolithic.

The district court denied the motion, and Monolithic challenged the denial with the Federal Circuit. The Federal Circuit agreed with the district court, noting

Monolithic’s history of soliciting employees to work in the Western District to support Monolithic’s local OEM customers in that district and the extent and type of laboratory equipment and product maintained in the homes of those employees.

One such employee had at home

a fair amount of Monolithic’s equipment, including two oscilloscopes, four to five power supplies, two electric loads, a logic analyzer, a soldering iron, a multimeter, a function generator, three to five samples of microcontrollers, MOSFETs, five op-amps, ten to fifteen comparators, twenty inductors, and fifty sample demonstration boards.

Also, said the court,

Monolithic provided that equipment, “which is not typically found in a generic home office,” for “the sole purpose of allowing Mr. Bone to conduct testing and validation as part of his job.”

One judge dissented, arguing that “Monolithic lacks a regular and established place of business in the Western District of Texas”:

Monolithic does not own, lease, or exercise control over any portion of the homes of the employees; does not require these four employees to (continue to) reside in the Western District of Texas as a condition of their employment; and does not list or advertise their homes as places of business.

It will be interesting to see how venue laws evolve in this WFH era.