The ruling from Judge Mark A. Kearney, visiting from the Eastern District of Pennsylvania, came as judges in the U.S. District Court for the District of Delaware and across the country continue to address an important provision of the patent venue statute that went unaddressed in the U.S. Supreme Court’s landmark ruling May 22 in TC Heartland v. Kraft Foods Group Brands.
While TC Heartland clarified that jurisdiction exists in a defendant’s state of incorporation, the decision offered no insight into what is meant by the statute’s second prong, which states that venue is still proper where a defendant has “committed acts of infringement” and has “a regular and established place of business.”
Prowire, which had accused the California-based tech giant of using infringing components in its iPads, said in court papers that Apple’s one retail store in Delaware allowed the company to be sued in the district, where it has employees.
Apple, on the other hand, argued that its Apple Store in the Christiana Mall made up a negligible portion of its business nationwide, and it did not significantly link the company to the state.
“Courts have held that a ‘regular and established place of business’ for the purposes of establishing venue in patent cases requires more than simply doing business in the district and more than a physical presence in the district,” Apple said in a brief signed by its Potter Anderson & Corroon attorneys. “Rather, a corporate defendant must be ‘engaged in carrying on in a continuous manner a substantial part of its ordinary business.”
Kearney, however, ruled that Prowire had made a plausible case for infringement, and he agreed with Prowire’s interpretation of the statute, saying Apple had not shown that it lacked a regular and established place of business in the First State.
“Apple’s retail store is a permanent and continuous presence where it sells the alleged infringing technology to consumers on a daily basis,” he wrote in a 14-page memorandum denying Apple’s motion to dismiss.
Attorneys from both sides were not immediately available Thursday to comment on the case.
The case, captioned Prowire v. Apple, centers on a patent for technology that uses a magnetic core, special coil and a magnetic resin layer to achieve enhanced inductance as electricity passes through an inductor. Prowire, which is based in Texas, accused Apple in March of incorporating the technology into its line of iPad 4 tablets.
Kearney was assigned the case in May, after Chief Judge Leonard P. Stark announced that he would lean on visiting judges to bolster a court that has been left shorthanded with the retirement of Judge Sue L. Robinson. Another judge, Gregory M. Sleet has also announced his intention to take senior status, though he continues to manage a full docket.
The court is also dealing with the fallout of TC Heartland, which has already sent a wave of cases to Delaware, home to many of the nation’s leading technology and pharmaceutical companies.
The high court’s ruling in TC Heartland was widely seen to limit the ability of plaintiffs to choose a friendly venue to hear infringement cases, and how the courts interpret the patent venue’s second prong will help to shape the ruling’s full impact.
Apple is represented by John M. Desmarais, Michael P. Stadnick, Robert C. Harrits, Kerri-Ann Limbeek and Ameet A. Modi of Desmarais LLP and David E. Moore and Bindu Ann George Palapura of Potter Anderson & Corroon.
Prowire lists George Pazuniak of O’Kelly & Ernst and Robert D. Katz of Katz PLLC as its attorneys on the case.
Tom McParland can be contacted at 215-557-2485 or at email@example.com. Follow him on Twitter @TMcParlandTLI.