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Westech Aerosol Corp. v. 3M Co.

United States Court of Appeals, Federal Circuit

July 5, 2019

WESTECH AEROSOL CORPORATION, Plaintiff-Appellant
v.
3M COMPANY, GTA-NHT, INC., DBA NORTHSTAR CHEMICAL, Defendants-Appellees

          Appeal from the United States District Court for the Western District of Washington in No. 3:17-cv-05067-RBL, Judge Ronald B. Leighton.

          Mark P. Walters, Lowe Graham Jones PLLC, Seattle, WA, argued for plaintiff-appellant.

          Pratik A. Shah, Akin Gump Strauss Hauer & Feld LLP, Washington, DC, argued for defendants-appellees. Also represented by Z.W. Julius Chen, Rachel J. Elsby; Michael P. Kahn, Michael Nasser Petegorsky, New York, NY.

          Before Lourie, Mayer, and Reyna, Circuit Judges.

          Reyna, Circuit Judge.

         Westech Aerosol Corporation appeals the decision of the United States District Court for the Western District of Washington granting 3M Company and GTA-NHT, Inc.'s motion to dismiss for improper venue. 3M Company and GTA-NHT, Inc. subsequently moved for attorneys' fees and double costs, arguing Westech Aerosol Corporation filed a frivolous appeal. Because the district court did not err in granting the motion to dismiss, we affirm. We also deny the motion for attorneys' fees and costs.

         Background

         On January 27, 2017, Appellant Westech Aerosol Corporation ("Westech") filed suit in the Western District of Washington, alleging that Appellees 3M Company ("3M Co.") and GTA-NHT, Inc., d/b/a Northstar Chemical ("Northstar") (collectively, "3M Co.") infringed U.S. Patent No. 7, 705, 056 ("the '056 patent"). 3M moved to dismiss for failure to state a claim, which prompted Westech to file an amended complaint. 3M again moved to dismiss for failure to state a claim. While 3M's second motion to dismiss was pending, the Supreme Court issued its decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514 (2017), holding that for purposes of the patent venue statute, 28 U.S.C. § 1400(b), a corporation "resides" only in its state of incorporation. Id. at 1517.

         In light of the Supreme Court's ruling in TC Heartland, 3M moved on May 25, 2017, to amend its pending motion to dismiss to include an argument that venue was improper in the Western District of Washington. The district court granted the motion to amend, and 3M filed an amended motion to dismiss on June 21, 2017, arguing that neither 3M nor Northstar had a regular and established place of business in the judicial district.

         Westech responded to the amended motion to dismiss by conceding "that its original complaint does not assert facts that support venue in this Court under the guidance of TC Heartland." J.A. 453. Accordingly, in its response, Westech sought leave to amend its complaint "to assert facts sufficient under 28 U.S.C. § 1400(b)." Id. Westech also argued in its response, inter alia, that the presence of sales representatives and 3M's sales in Washington supported venue in the district and that 3M had a "principal place of business" and other business locations at various addresses in Washington. J.A. 453-54.

         3M filed a reply supported by a declaration stating that at the time of the original complaint, 3M did not own, lease, use, or maintain property at any of the locations identified in Westech's response. The declaration, signed by a senior manager in 3M's Real Estate Department, further stated that 3M did not currently occupy any of the locations identified by Westech. Westech moved to strike 3M's reply and accompanying declaration because they discussed new information raised for the first time in 3M's reply.

         The district court denied 3M's amended motion to dismiss without prejudice. In addressing the venue issue, the court agreed with 3M that a sales presence in the judicial district did not, by itself, satisfy the patent venue statute. The court, however, was persuaded that Westech could amend its complaint to allege proper venue, and therefore granted Westech leave to amend its complaint with a warning to do so "consistent with its Rule 11 obligations." J.A. 519.

         Westech filed its second amended complaint on September 6, 2017. Instead of pleading facts to support proper venue, Westech parroted § 1400(b):

Venue is proper in this judicial district pursuant to 28 U.S.C. ยง 1400(b) because Defendants have committed acts of infringement in this judicial district and 3M has one or more regular and established places of business in this judicial district. Furthermore, on information and belief, Defendants maintain contractual relationships with distributors of the infringing products who are located in this judicial district, Defendants have sales representatives located in this judicial district, Defendants represent that they sell products ...

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