Not a Lexis Advance subscriber? Try it out for free.

BillingNetwork Patent, Inc. v. Modernizing Med., Inc.

United States District Court for the Northern District of Illinois, Eastern Division

November 6, 2017, Decided; November 6, 2017, Filed

No. 17 C 5636

Opinion

MEMORANDUM OPINION AND ORDER

BillingNetwork Patent, Inc. ("Plaintiff") filed this suit against Modernizing Medicine, Inc. ("Defendant") for alleged patent infringement. (R. 1.) Defendant moves to dismiss for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). (R. 19.) For the reasons set forth below, the Court grants Defendant's motion.1

BACKGROUND

Plaintiff filed this suit on August 2, 2017, alleging that Defendant infringes U.S Patent No. 6,374,229, entitled "Integrated Internet Facilitated Billing, Data Processing and Communication System," through the marketing and sale of various online, cloud-based practice management and billing services. (R. 1, Compl. ¶¶ 1, 3, 6, 23.) Plaintiff alleges that Defendant "owns, operates and conducts business through its [allegedly infringing] practice management system . . . throughout the United [*2]  States including Illinois and this judicial district." (Id. ¶ 8.) As it pertains to venue, Plaintiff alleges that Defendant is a Delaware corporation and that it "has registered itself with the Illinois Secretary of State to do business in Illinois and has a designated agent incident to such registration whereby [Defendant] has [a] regular and established place of business in Illinois." (Id. ¶¶ 5, 9-10.) On September 13, 2017, Defendant filed the present motion to dismiss, arguing that Plaintiff has not carried its burden of showing that venue is proper in this District. (R. 19, Mot.; R. 20, Mem.)

In response to Defendant's motion, Plaintiff offers a declaration from its counsel purporting to establish the following, additional venue-related facts: (1) Defendant is "only registered to do business in select U.S. States"; (2) Defendant maintains two employees in Illinois, "presumably in the Northern District," who "train end-users how to operate the same systems accused of infringement" in this case; and (3) "[a]n online search identifies at least four (other) recently hired employees that perform numerous tasks for Defendant in Illinois." (R. 29, Resp. at 2; see also R. 29-1, Opatken Decl. [*3]  ¶¶ 4-6.)

In reply, Defendant submits its own declaration from its Chief Operating Officer and Chief Financial Officer, Karen O'Byrne. According to the declaration, Defendant has five employees who work in this District, three of whom were hired this year. (R. 30-2, O'Byrne Dccl. 4.) All five work out of their own homes, which Defendant does not own, lease, or subsidize. (Id. ¶¶ 4, 7.) Defendant does not list these employees' homes on any website, telephone book, or other directory as a place where it conducts business. (Id. ¶ 14.) Defendant also does not require these employees to reside at a particular location, nor does it require them to reside in this District. (Id. ¶¶ 6, 11.) None of the employees have staff or secretarial help located in their residences; they receive administrative support solely from Defendant's principal places of business in California and Florida. (Id. ¶¶ 8-9.) Other than company-issued laptops and like equipment that these employees use to perform their job duties, Defendant does not store materials or inventory in the employees' homes, nor does it maintain any real or personal property, or any storage, distribution, or manufacturing facilities, in this [*4]  District. (Id. ¶¶ 5, 12.)

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

2017 U.S. Dist. LEXIS 183577 *; 2017 WL 5146008

BILLINGNETWORK PATENT, INC., Plaintiff, v. MODERNIZING MEDICINE, INC., Defendant.

CORE TERMS

venue, regular, registered, infringement, discovery