Federal Circuit Holds Patent Venue Decision Based on Remote Workers Did Not Warrant Mandamus Relief

By Daniel M. Staren and David G. Barker

The Federal Circuit recently denied a mandamus petition seeking relief from a district court order denying a motion to dismiss a patent case for improper venue under 28 U.S.C. § 1400(b).

Bel Power Solutions, Inc. sued Monolithic Power Systems, Inc. in the Western District of Texas for selling power modules that infringed Bel’s patents.  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) because (1) it is a Delaware corporation and does not reside in the Western District within the meaning of § 1400(b), (2) does not own or lease any property in the Western District, and (3) the homes of its four fulltime remote employees in the Western District identified in the complaint to support venue are insufficient to constitute a “regular and established place of business” of Monolithic under § 1400(b).

The district court disagreed, holding that Monolithic intentionally maintained a business presence in the Western District and provided certain employees there with specialized lab equipment and products to be used in or distributed from their homes as part of their job responsibilities. Monolithic sought mandamus relief arguing, among other things, the district court wrongly decided that the Western District was a proper venue under § 1400(b) based on its employees’ homes. The Federal Circuit denied Monolithic’s petition.

The 2-1 majority held the district court properly analyzed Monolithic’s arguments under In re Cray, Inc. in holding that venue was appropriate in the Western District. The majority denied mandamus relief because Monolithic had “not shown a clear and indisputable right to mandamus relief.” It was relevant to the court’s decision that Monolithic provided equipment to its remote employees that “is not typically found in a generic home office.” It was also relevant that Monolithic had a “history of soliciting employees to work in the Western District to support Monolithic’s local” customers.

The dissent would have granted relief because “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.” Therefore, under In re Cray, Inc., the dissent argued Monolithic did not have a regular and established place of business in the Western District.

The dissent also reasoned that imputing an employee’s home to a defendant for purposes of venue is likely to become an issue of concern because of the shift to remote work since the COVID-19 pandemic. The majority acknowledged that possibility and responded that mandamus relief is reserved for a “broad, fundamental, and recurring legal question or usurpation of judicial power.” It explained that the case presented “an idiosyncratic set of facts” and granting immediate mandamus relief would be “inconsistent with the limited nature of the writ of mandamus.” In addition, noting that the decision did not reach the merits, the majority further explained its “conclusion should necessarily not be interpreted as a disagreement with the dissent’s analysis of the ultimate merits of the venue issues.”