Richards Layton & Finger
 

Magistrate Judge Burke Recommends Finding that Venue Defense Was Forfeited

August 24, 2018

In Princeton Digital Image Corp. v. Ubisoft Entertainment SA, No. 13-335-LPS-CJB (D. Del. June 25, 2018), Magistrate Judge Burke recommended that the Court deny defendant Ubisoft Inc.’s motion to dismiss for improper venue. Ubisoft argued that venue was improper since it was incorporated elsewhere, it had no physical presence in Delaware, and none of the allegedly infringing acts took place in the District, but Judge Burke concluded that the Court should exercise its inherent power to find that the defense had been forfeited due to the timing of the motion.

Ubisoft argued that the venue defense was not available because the case had been stayed until six-and-a-half months after TC Heartland LLC v. Kraft Foods Group Brands LLC and because co-defendant Ubisoft Entertainment SA was not dismissed until this past December. Judge Burke pointed out, however, that the stay in place as of May of 2017 (when Heartland was decided) applied only to fact discovery, not all case activity, and nothing prevented Ubisoft from moving to stay at that time. Furthermore, although a later stay halted the case in its entirety pending the Court’s ruling on, inter alia, claim construction issues, Judge Burke stated that Ubisoft could have moved to lift the stay. According to Judge Burke, Ubisoft’s timing amounted to a “tactical wait-and-see approach” that afforded Ubisoft the ability to await the outcome of Markman proceedings and only then decide whether to challenge venue (although Judge Burke expressly stated that Ubisoft was not accused of harboring this intention). As for Ubisoft Entertainment SA’s role, Judge Burke stated that its status as a defendant had no effect on whether the venue defense was available to Ubisoft, since Heartland applied only to domestic corporations.

In further support of the conclusion that the venue defense was forfeited, Judge Burke cited additional case activity engaged in by Ubisoft after Heartland, such as filing notices of supplemental authority and briefing objections to claim construction, as well as the fact that the litigation had been pending for five years alongside related actions in this District, and the Court had invested time and made significant case rulings.

Key Point: In addition to the timing of the motion to dismiss for improper venue, Judge Burke found significant the substantial time and effort that the Court had invested in this litigation when concluding that the defense had been forfeited.