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The Valspar Corp. v. PPG Industries, Inc.

United States District Court, D. Minnesota

August 4, 2017

The Valspar Corporation and Valspar Sourcing, Inc., Plaintiffs,
v.
PPG Industries, Inc., Defendant.

          GARRET A. LEACH, ADAM M. KAUFMANN, ELIZABETH A. CUTRI, KIRKLAND & ELLIS LLP, PATRICK S. WILLIAMS, BRIGGS & MORGAN, PA, F. ANDREW UBEL, III, THE VALSPAR CORPORATION, AND ANDREW A. DEMASTER, VALSPAR SOURCING, INC., FOR PLAINTIFFS.

          CELINE J. CROWSON, JOSEPH J. RAFFETTO, HOGAN LOVELLS U.S. LLP, LEWIS A. REMELE, JR., AND JEFFREY D. KLOBUCAR, BASSFORD REMELE, PA, FOR DEFENDANT.

          MEMORANDUM OPINION AND ORDER

          SUSAN RICHARD NELSON, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This matter comes before the Court on Defendant's Motion to Dismiss for Improper Venue [Doc. No. 84]. For the reasons stated herein, Defendant's Motion is granted, and this case is transferred to the Western District of Pennsylvania.

         II. BACKGROUND

         Plaintiffs The Valspar Corporation and Valspar Sourcing, Inc. (collectively, “Valspar”) are, respectively, the exclusive licensee and owner of several patents relating to spray-applied bisphenol A (“BPA”)-free coatings used on food and beverage cans. See Valspar Corp. v. PPG Indus., Inc., No. 16-cv-1429 (SRN/SER), 2017 WL 6534414, at *1 (D. Minn. Nov. 3, 2016). Valspar alleges that Defendant PPG Industries, Inc. (“PPG”) has developed and marketed a competing product, INNOVEL HPS (“Innovel”) that infringes on these patents. See Id. On the basis of those allegations, the present suit commenced on May 23, 2016. See id.

         On September 9, 2016, PPG moved to transfer this case to the Western District of Pennsylvania, arguing that that district was a more convenient forum for the parties and witnesses, and that it would best serve the interests of justice. (See Def.'s Mot. to Transfer [Doc. No. 33] at 1.) See 28 U.S.C. § 1404(a). Notably, for purposes of the present motion, PPG did not contend that venue in Minnesota was improper. Indeed, at all times prior to filing this motion, it conceded that venue was technically proper in Minnesota under prevailing law. (See, e.g., Answer to Am. Compl. [Doc. No. 40] ¶ 15 (“PPG admits that venue for this action is proper in the District of Minnesota. . . .”).) After careful consideration, this Court denied PPG's motion to transfer, finding that PPG had “failed to satisfy its heavy burden of demonstrating that the Western District of Pennsylvania is a more convenient forum for this case than the District of Minnesota.” Valspar, 2017 WL 6534414, at *6 (citing Datalink Corp. v. Perkins Eastman Architects, P.C., 33 F.Supp.3d 1068, 1079 (D. Minn. 2014)).

         On June 9, 2017, PPG filed the present motion to amend its answer to deny that venue is proper, pursuant to Federal Rule of Civil Procedure 15(a)(2), and to dismiss this case (or in the alternative, to transfer it) pursuant to Federal Rule of Civil Procedure 12(b)(3). As justification for the untimeliness of the motion, PPG asserts that while venue had been proper in Minnesota under prevailing law at the time suit was filed, it was no longer in the wake of the Supreme Court's May 22, 2017 decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514 (2017). (See Def.'s Mem. in Supp. of Mot. to Dismiss [Doc. No. 85] (“Def.'s Mem. in Supp.”) at 1-2.) In PPG's view, TC Heartland upended the law of venue in patent cases, should be applied retroactively, and represents an intervening change in the law such that any waiver of the improper venue argument should be excused. (See generally id.)

         The Court agreed to consider PPG's motion on an expedited basis, without a hearing. (See May 31, 2017 Order [Doc. No. 80] at 1-2.) The parties completed their briefing on June 30, 2017, and the matter is now ripe for a decision.

         III. DISCUSSION

         A. Change in the Law of Venue

         In patent suits, venue is governed by 28 U.S.C. § 1400(b), which provides that “[a]ny civil action for patent infringement may be brought in [1] 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.” In 1957, the Supreme Court determined that for purposes of corporate defendants, a corporation “resides” only in its state of incorporation. See Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 226 (1957). In so holding, the Court rejected the argument that § 1400(b) incorporates the broader definition of corporate “residence” contained in the general venue statute, 28 U.S.C. § 1391(c). See Id. at 228.

         Congress has not amended § 1400(b) since Fourco was decided. It has, however, amended § 1391 twice. In 1988, Congress amended that statute to provide that “[f]or purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.” See TC Heartland, 137 S.Ct. at 1519 (emphasis added) (citation omitted). Interpreting this change, the Federal Circuit concluded that Congress meant to amend the definition of “resides” as it appears in § 1400(b), because that section falls in the same chapter as § 1391(c). See VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1584 (Fed. Cir. 1990). Accordingly, the Federal Circuit held that in a patent case, a corporation resided ...


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