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Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business. 28 U.S.C.S. § 1400(b). A regular and established place of business requires a place of business in the district, i.e., a physical, geographical location in the district from which the business of the defendant is carried out. The place of business must be the defendants, not solely a place of the defendant's employee. An appellate court reviews de novo the question of proper venue under § 1400(b).
Drs. Nazir Khan and Iftikhar Khan accused Hemosphere Inc., CryoLife Inc., and Merit Medical Systems, Inc., along with over 300 hospitals and individual physicians, of infringing a claim of U.S. Patent No. 8,747,344, directed to an arteriovenous shunt. The Khans challenged the district court's decision dismissing the action with prejudice for want of prosecution due to the Khans' insufficient and untimely service of their complaint and, alternatively, for improper venue and misjoinder. The Khans also challenged the district court's decisions granting the defendants' motion for sanctions and denying the Khans' cross-motion for sanctions. Merit Medical cross-appealed the district court's decision denying its motion to declare the case exceptional and to award attorney fees under 35 U.S.C. § 285.
Did the district court correctly conclude that the venue was improper under 28 U.S.C.S. § 1400(b)?
The court affirmed the dismissal of patent infringement action because the district court properly exercised its discretion in dismissing appellants' complaint due to their insufficient and untimely attempts at service. The district court correctly concluded that venue was improper under 28 U.S.C.S. § 1400(b) because appellants failed to plausibly allege that any of appellees infringed the asserted claim in the district or had a regular and established place of business in the district. The district court's decision denying motion to declare the case exceptional and to award attorney fees under 35 U.S.C.S. § 285 was affirmed because although the appellants' litigation strategy was "unorthodox," their conduct following the district court's grant of sanctions did not rise to the level of "exceptional."