Rosco, Inc. v. Safety Vision, LLC

Background

Rosco, Inc. brought patent-infringement and other claims against Safety Vision LLC and Shenzhen Germid Electronic Technology Development Co., Ltd. Rosco alleged that a product manufactured by Shenzhen Germid and marketed and sold in the United States by Safety Vision infringed Rosco’s patents. Safety Vision moved to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3) or, alternatively, to transfer the case to the Southern District of Texas. The court allowed limited discovery about venue and received supplemental briefs.

Venue analysis

Patent-infringement venue is governed by 28 U.S.C. § 1400(b). Under that statute, a patent case may be brought where the defendant resides or where the defendant committed acts of infringement and has a regular and established place of business. The court noted that Safety Vision resides in the Southern District of Texas, so the question was whether it had a regular and established place of business in the Southern District of New York.

The court applied a three-part test: there must be a physical place in the district; the place must be regular and established; and it must be a place of the defendant, not merely a place belonging to an employee. The court considered the circumstances as a whole rather than treating any single fact as controlling.

Rosco argued that Safety Vision maintained a satellite office at employee Brandon Blood’s rental apartment in Manhattan. The court found that the evidence showed the apartment was Blood’s place, not Safety Vision’s. Blood paid for the apartment, had proposed moving to New York, was not reimbursed for moving expenses, and could move elsewhere within the region without Safety Vision’s permission. Safety Vision’s website and marketing materials did not list Blood’s New York address, and his business cards and email signature identified Safety Vision’s Houston office. The court found that his New York phone number, statement that he was operating out of New York, company computer, and limited supply of brochures showed that he worked from New York, but did not show that Safety Vision established a place of business there.

The court also distinguished a case in which employees’ home offices were primary physical locations for the company’s business. Here, Safety Vision’s management team and more than 90 percent of its employees were located in Houston, while the other employees were remote sales associates or installation technicians. The court concluded that, taken together, the facts did not establish a regular and established place of business of Safety Vision in the Southern District of New York.

The court did not resolve Rosco’s requests for adverse inferences or additional depositions because, even if the requested inferences were drawn, they would not change the venue analysis.

Transfer and disposition

Because venue was improper, the court could either dismiss the case or transfer it to a district where it could have been brought. The court considered factors including witness convenience, access to documents and other evidence, convenience of the parties, the location of operative events, subpoena power, the parties’ resources, familiarity with governing law, Rosco’s forum choice, trial efficiency, and the interests of justice. The court concluded that these factors favored transfer to the Southern District of Texas rather than dismissal.

Judge Jesse M. Furman granted Safety Vision’s motion to transfer the case to the Southern District of Texas. The court also approved the redactions previously approved temporarily and directed the clerk to terminate the motion, transfer the case, and close the case in the Southern District of New York. The opinion did not decide whether the alleged patent infringement occurred.