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In re ZTE (USA) Inc.

Burden of Proof to Establish Venue, Upon Challenge by Defendant, is on Plaintiff

In re ZTE (USA) Inc., __ F.3d __, 2018 WL 2187782 (Fed. Cir. May 14, 2018) (Reyna, LINN, Hughes) (E.D. Tex.: Mazzant) (3 of 5 stars)

Fed Cir issues writ of mandamus vacating denial of motion to dismiss for improper venue, and ordering reconsideration. The district court erred in its apparent reliance on Fifth Circuit law to determine the placement of the burden of proof in a venue dispute. Federal Circuit law controls that issue, and requires that the plaintiff bear the burden of establishing proper venue under § 1400(b), the patent venue statute. The opinion rejects the plaintiff’s assertion that the burden should be on the defendant because venue is an affirmative defense. As in personal jurisdiction, a plaintiff bears the burden to affirmatively establish venue upon challenge by a defendant. The opinion then recites a variety of fact issues requiring resolution in order to determine whether the operation of a call center for ZTE in Plano was sufficient to establish venue, including the nature of the relationship between ZTE and the call center’s operator, iQor; whether ZTE itself owns, leases, or rents the call center’s office space or equipment; the signage at the site; and whether the center’s location was specified by ZTE or iQor. On remand, the district court should consider these and other factors from Cray, 871 F.3d 1355 (Fed. Cir. 2017).

KEYWORDS: MANDAMUS (YES); VENUE; BURDEN OF PROOF