Berall v. Verathon Inc.

Background

Jonathan Berall sued over alleged infringement of United States Patent No. 5,827,178 involving video laryngoscopes. The action originally included LMA North America, Inc. LMA later merged into Teleflex Medical Incorporated, with Teleflex surviving. The court eventually substituted Teleflex for LMA. Berall’s Second Amended Complaint then asserted claims against Teleflex both as LMA’s successor and as a separate entity based on Teleflex’s distribution of Airtraq video laryngoscopes.

Teleflex moved to dismiss under Federal Rule of Civil Procedure 12(b)(3) for improper venue or, alternatively, to transfer the case under 28 U.S.C. § 1406(a). Berall argued that Teleflex had waived or forfeited its venue objection by participating in the litigation and sought discovery concerning whether venue was proper.

Waiver and forfeiture

The court held that Teleflex had not waived its improper-venue defense. LMA, rather than Teleflex, had answered the First Amended Complaint, and the court had not substituted Teleflex for LMA until January 2021. The First Amended Complaint did not assert claims against Teleflex as an entity separate from its role as LMA’s successor. The Second Amended Complaint was the first pleading that asserted separate claims against Teleflex, so the court found that Teleflex’s venue motion was timely as to those claims.

The court also held that Teleflex had not forfeited its venue objection through its earlier participation in the case. Before the Second Amended Complaint, Teleflex had participated only as LMA’s successor. The court noted that Teleflex had opposed discovery concerning Airtraq distribution as unrelated to the claims then pleaded and had not consented to the later amendment adding the separate Airtraq allegations.

Venue

Patent venue is governed by 28 U.S.C. § 1400(b). A patent-infringement 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 stated that a regular and established place of business requires a physical place in the district, a regular and established business operation there, and a place that belongs to or is established by the defendant rather than merely an employee.

The parties did not dispute that Teleflex was incorporated in California, so Teleflex did not reside in the Southern District of New York under the first part of § 1400(b). The court found that Berall had not shown that Teleflex had a regular and established place of business in the district. Berall did not contest Teleflex’s assertion that it lacked such a place, and the Second Amended Complaint did not allege facts supporting the required venue showing.

Venue discovery and transfer

The court denied Berall’s request for venue-related discovery. It concluded that Berall had not made the required initial showing through specific factual allegations or evidence that Teleflex had a regular and established place of business in the district. Berall’s statement that Teleflex might have a regular and established place of business in New Jersey did not support discovery concerning venue in the Southern District of New York.

Because venue was improper, the court could dismiss the case or transfer it to a district where it could have been brought. The court decided that transfer served the interests of justice because it did not conclude that Berall’s infringement claim was clearly doomed and because dismissal could create statute-of-limitations concerns. The court found venue proper in the Eastern District of North Carolina because Teleflex’s commercial headquarters was in Morrisville, North Carolina, where the opinion states that many of Teleflex’s commercial functions were located.

Disposition

Judge Preska granted Teleflex’s motion to dismiss and ordered that the case be transferred to the Eastern District of North Carolina under 28 U.S.C. § 1406(a). The Clerk of Court was directed to close the motion.