Judge Failla Transfers Case to Delaware Based on “When the Case Was Filed”

Patterson Belknap Webb & Tyler LLP

Patterson Belknap Webb & Tyler LLP

On July 20, 2022, Magistrate Judge Failla (S.D.N.Y.) found venue to be improper and transferred the TrackThings LLC v. Netgear, Inc. case to the United States District Court for the District of Delaware based on facts as they existed at the time of filing, thereby rejecting the Welch Rule.

At the outset of its analysis, the court noted the emergence of a circuit split on the question of the relevant timeframe for patent venue analysis, i.e., whether patent venue should be determined based on the facts that exist as of the date the action was filed or as of the date the cause of action accrued.  The court acknowledged the Seventh Circuit’s approach in Welch Science Co. v. Human Engineering Institute, Inc. and its progeny, which hold that venue is established “at the time the cause of action accrued.”  But the court decided that the “time-of-filing rule is the standard more faithful to the language of and the precedent interpreting the patent statute.”  The court reasoned that the language of 28 U.S.C. 1400(b) indicates the temporal focus is the time at which a suit is filed (e.g., where a civil action “may be brought”).

Upon finding that venue in the Southern District of New York was improper as of the date that TrackThings filed its complaint, the court decided to transfer the case.  Netgear argued that the case should be transferred to the Northern District of California, where it has its headquarters and principal place of business.  Plaintiff, on the other hand, offered Delaware, where Netgear is incorporated.  Citing the interest of justice, the court transferred the case to Delaware.

Case: Trackthings LLC v. Netgear, Inc., No. 21 Civ. 5440 (KPF), Dkt. No. 55 (S.D.N.Y. July 20, 2022)

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