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Genentech, Inc. v. Eli Lilly and Co.

United States District Court, S.D. California

September 12, 2019

GENENTECH, INC., a Delaware corporation, Plaintiff,
v.
ELI LILLY AND COMPANY, an Indiana corporation, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION (ECF NO. 30)

          Hon. Janis L. Sammartino United States District Judge.

         Presently before the Court is Eli Lilly and Company's Motion (“Mot., ” ECF No. 24) seeking to dismiss or transfer this action for improper venue under Federal Rule of Civil Procedure 12(b)(3); strike allegations in Plaintiff Genentech, Inc.'s First Amended Complaint under Federal Rule of Civil Procedure 12(f); and dismiss Plaintiff's willful infringement claim under Federal Rule of Civil Procedure 12(b)(6). Plaintiff filed a Response in Opposition to (“Opp'n, ” ECF No. 48) and Defendant filed a Reply in Support of (“Reply, ” ECF No. 50) the Motion. After reviewing the Parties' arguments and the law, the Court rules as follows.

         BACKGROUND

         This case came before the Court on July 3, 2019, when Plaintiff Genentech, Inc., filed suit. First Amended Complaint (“FAC”) ¶ 5, ECF No. 29. Plaintiff is a Delaware corporation with its principal place of business in San Francisco, California. Id. ¶ 1. Defendant Eli Lilly and Company is an Indiana corporation with its principal place of business in Indiana. Id. ¶ 2. Defendant has owned and operated the Lilly Biotechnology Center in San Diego, California, since 2009. Id. ¶ 9.

         Plaintiff brings suit under 35 U.S.C. § 271 for Defendant's alleged infringement of U.S. Patent No. 10, 011, 654 (the “'654 patent”). Id. ¶¶ 3, 25-43. Plaintiff alleges that Defendant's “manufacture, use, importation, offer for sale, and/or sale of Taltz® (containing ixekizumab as its active ingredient), a prescription medicine approved by the U.S. Food and Drug Administration to treat psoriatic arthritis and moderate to severe plaque psoriasis in adults, ” id. ¶ 3, “constitutes an act of infringement of at least claims 1, 4, 5, and 7 of the '654 patent.” Id. ¶ 26.

         After Plaintiff filed suit, Defendant filed a motion to dismiss the original complaint and strike allegations therein. ECF No. 24. Before filing any response, the Parties filed a joint motion for leave to file an amended complaint, ECF No. 27, which the Court granted. ECF No. 28. Plaintiff then filed its FAC and Defendant filed the present Motion. Shortly after Defendant filed this Motion, Plaintiff filed an ex parte motion for leave to seek expedited discovery related to Defendant's contentions that venue in this district is improper. ECF No. 30. The Court granted the motion and allowed limited discovery on the issue of venue. ECF No. 39. Following the close of venue discovery, Plaintiff filed its Opposition and Defendant filed its Reply. The Court, finding this matter suitable to take under submission without oral argument, now considers the present Motion.

         ANALYSIS

         I. Motion to Dismiss for Improper Venue

         Defendant contends that venue is improper in the Southern District of California because Plaintiff failed to allege sufficient facts to make a plausible claim that Defendant committed acts of infringement within the district. Mot. at 17-18. Defendant also contends that Plaintiff's allegations for venue purposes are inadequate because the alleged acts of infringement are not related to Defendant's established place of business in the District. Id. at 19-22. Defendant also contends that if the Court deems venue is improper but does not dismiss, the Court should transfer the case to the Southern District of Indiana under 28 U.S.C. § 1404(a). Id. at 25-28.

         A. Sufficiency of Plaintiff's Infringement Allegations for Venue Purposes

         A party may move to dismiss an action for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). In deciding a Rule 12(b)(3) motion, a court need not accept the pleadings as true and may consider facts outside the pleadings. Murphy v. Schneider Nat'l, Inc., 362 F.3d 1133, 1137 (9th Cir. 2004). “Plaintiff bears the burden of showing that venue is proper.” Kaia Foods, Inc. v. Bellafiore, 70 F.Supp.3d 1178, 1183 (N.D. Cal. 2014) (citing Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979)).

         In patent infringement actions, 28 U.S.C. § 1400(b) “is the sole and exclusive provision controlling venue in patent infringement actions.” TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514, 1516-17 (2017) (quotations omitted). Under section 1400(b), venue is proper (1) “in the judicial district where the defendant resides, or [(2)] where the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. § 1400(b).

         In this case, Plaintiff asserts venue under the second prong only; thus, the Court must determine if Defendant “committed acts of infringement” and maintains a “regular and established place of business” within this district. There is no dispute that Defendant has a “regular and established place of business.” Defendant concedes that the Lilly Biotechnology Center located in San Diego, California, meets this requirement. See Mot. at 12; ECF No. 42-3 at 16; ECF No. 43 at 9. The only question is whether Plaintiff has adequately alleged acts of infringements to satisfy venue. The Court concludes it has.

         To support venue, allegations that a defendant committed acts of direct infringement, induced infringement, or contributed to infringement are sufficient. Seven Networks, LLC v. Google LLC, 315 F.Supp.3d 933, 942 (E.D. Texas 2018). While a defendant may contest the allegations, the Court need not delve into the merits of infringement when considering whether venue is proper. Id. (citing In re Cordis Corp., 769 F.2d 733, 736-37 (Fed. Cir. 1985) (“The ...


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