Reported / Citable
Background
VE Opening LLC sued Dropbox, Inc. for patent infringement of U.S. Patent No. 9,916,079 in the Western District of Texas (Midland-Odessa Division). Plaintiff asserted venue was proper under 28 U.S.C. § 1400(b), citing Dropbox’s alleged infringement within the district and Dropbox’s office at 501 Congress Ave, Austin, Texas. Dropbox moved to dismiss for improper venue or alternatively to transfer the case.
Dropbox disclosed that it vacated the Austin office in July 2023, subleased the space beginning that month, and terminated its lease in May 2025—months before the complaint was filed. Dropbox argued that its employees in the district now work from third-party co-working spaces or home offices, neither of which constitutes a “regular and established place of business” under § 1400(b). Plaintiff countered that Dropbox maintains over 100 employees in the district, provides up to $5,000 annual reimbursements for home office expenses, and holds regular employee gatherings at co-working spaces.
The Court’s Holding
The magistrate judge adopted a three-part test from In re Cray Inc. for establishing venue: (1) a physical place must exist in the district, (2) that place must be a regular and established place of business, and (3) that place must belong to the defendant itself—not merely to employees. Applying TC Heartland LLC v. Kraft Foods, the court confirmed that Dropbox, as a Nevada corporation, “resides” only in Nevada for patent venue purposes, so plaintiff could establish venue only through Dropbox’s infringement activity and regular established place of business in the Western District.
The court found that co-working spaces, home offices, employee reimbursements, and informal gatherings do not satisfy the third requirement—they are not places belonging to Dropbox. The plaintiff’s reliance on cases such as In re Cordis Corp. was rejected as inconsistent with In re Cray’s clarification that the location must be the defendant’s place of business, not a transient shared space. A work-from-home employee’s residence, even if subsidized, is insufficient. Venue must be assessed as of the complaint’s filing date, so the vacated Austin office could not sustain venue. The magistrate judge concluded that plaintiff failed to meet its burden of establishing proper venue in the Western District.
Rather than dismiss outright, the court invoked 28 U.S.C. § 1406(a) and recommended transferring the case to the Northern District of California, where Dropbox maintains its headquarters and where venue is unquestionably proper. The court found transfer in the interests of justice preferable to dismissal.
Key Takeaways
- Remote work arrangements—co-working space memberships, home office reimbursements, and employee gatherings—do not establish a “regular and established place of business” for patent venue purposes.
- Venue under § 1400(b) requires a physical location that actually belongs to the defendant corporation, not merely locations where employees happen to work.
- Venue is assessed as of the date the complaint is filed; vacated offices cannot sustain venue in subsequent litigation.
- When venue is improper, courts may transfer to a proper venue in the interests of justice rather than dismiss the action entirely.
Why It Matters
This decision clarifies important boundaries for patent venue in the post-COVID era of distributed workforces. Defendants who have transitioned to fully remote or hybrid models without maintaining formal offices cannot be sued for patent infringement simply because employees reside and work in a given district. The ruling protects companies from unintended venue exposure based on employee geography and signals that the “regular and established place of business” requirement under § 1400(b) remains a genuine jurisdictional constraint, not a fiction.
For patent plaintiffs, the decision confirms that proximity to a defendant’s employees is insufficient; they must identify an actual physical location—owned, leased, or controlled by the defendant—where the business is conducted. The recommendation to transfer rather than dismiss provides a procedural path forward while respecting venue limitations, favoring judicial efficiency over technical dismissal.