Wednesday, August 04, 2021

Andra loses venue case to LBI and several Victoria’s Secret entities

On the issue of venue:

Because each Defendant is incorporated in Delaware, no defendant “resides” in Texas for the purpose of patent venue. Thus, to establish venue in this case, Andra must show that each Defendant committed acts of infringement and maintains a regular and established place of business in the Eastern District of Texas.
To show that a defendant has a regular and established place of business, there are three requirements: “(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.” In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017). As we stated in Cray, “[t]he Supreme Court has . . . instructed that ‘[t]he requirement of venue is specific and unambiguous; it is not one of those vague principles which, in the interests of some overriding policy, is to be given a liberal construction.’” Id. at 1361 (second alteration in original) (quoting Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260, 264 (1961)); see also In re Google LLC, 949 F.3d 1338, 1346 (Fed. Cir. 2020) (“[T]he Supreme Court has cautioned against a broad reading of the venue statute.”). The parties do not dispute that Stores operates retail locations in the District, and whether venue is proper as to Stores is not at issue in this appeal. The question is whether these Stores locations can be considered “a regular and established place of business” of the Non-Store Defendants. In re Cray, 871 F.3d at 1360. Andra argues that Stores locations are “a regular and established place of business” of the Non-Store Defendants because Stores employees are agents of the Non-Store Defendants, or, alternatively, because the Non-Store Defendants have ratified Stores locations as their places of business. We address each argument in turn.

“[A] ‘regular and established place of business’ requires the regular, physical presence of an employee or other agent of the defendant conducting the defendant’s business at the alleged ‘place of business.’” In re Google, 949 F.3d at 1345. Because there is no dispute that the NonStore Defendants lack employees in the District, Andra argues that Stores employees are agents of LBI, Direct, and Brand. Appellant’s Br. 13–14. “Agency is the fiduciary relationship that arises when one person (a ‘principal’) manifests assent to another person (an ‘agent’) that the agent shall act on the principal’s behalf and subject to the principal's control, and the agent manifests assent or otherwise consents so to act.” Restatement (Third) of Agency § 1.01 (Am. L. Inst. 2006). “The essential elements of agency are (1) the principal’s ‘right to direct or control’ the agent’s actions, (2) ‘the manifestation of consent by [the principal] to [the agent] that the [agent] shall act on his behalf,’ and (3) the ‘consent by the [agent] to act.’” In re Google, 949 F.3d at 1345 (alterations in original) (quoting Meyer v. Holley, 53 U.S. 280, 286 (2003).

Andra argues that LBI “controls store location workers by dictating store operations, hiring, and conduct.” Appellant’s Br. 16. Andra points to various public filings by LBI that speak in broad terms about real estate holdings and investments, contends that LBI controls the hiring and firing of employees, and argues that because LBI requires Stores associates to sign and follow LBI’s Code of Conduct, this indicates control over the employees. Andra argues that Direct “controls store location workers by dictating their handling of returns of merchandise purchased on the [Victoria’s Secret] website.” Id. at 18. Finally, Andra argues that Stores employees are agents of Brand because Brand “‘closely controls the distribution and sales of its products’ exclusively available through store locations and the [w]ebsite.” Id. at 19 (quoting J.A. 799–801 ¶¶ 11, 13, 15–16).


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