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Biofire Defense, LLC v. Fluidigm Corp.

United States District Court, D. Utah

December 20, 2019

BIOFIRE DEFENSE, LLC, a Delaware corporation; and UNIVERSITY OF UTAH RESEARCH FOUNDATION, a Utah nonprofit corporation, Plaintiffs,
v.
FLUIDIGM CORPORATION, a Delaware corporation, Defendant.

          Paul M. Warner Chief Magistrate Judge.

          MEMORANDUM DECISION AND ORDER GRANTING PLAINTIFFS' MOTION TO TRANSFER TO THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

          ROBERT J. SHELBY United States Chief District Judge.

         This suit concerns patent infringement allegations Plaintiffs Biofire Defense, LLC and University of Utah Research Foundation brought against Defendant Fluidigm Corporation. The dispute now before the court, however, is procedural: where both sides agree the Supreme Court's decision in TC Heartland renders venue improper in the District of Utah, should the court dismiss the case or transfer it to another district? Before the court are Plaintiffs' Motion to Transfer[1] and Fluidigm's Renewed Motion to Dismiss.[2] For the reasons given below, the court GRANTS Plaintiffs' Motion and will transfer the case to the District of Delaware. Fluidigm's Motion is DENIED.

         BACKGROUND

         I. Facts[3]

         BioFire develops, manufactures, and sells equipment and reagents used to monitor DNA samples during polymerase chain reaction (PCR).[4] PCR allows researchers to replicate and amplify a DNA sample by using temperature cycling to heat the sample.[5] Heating the sample causes the two strands that comprise DNA to separate into single DNA strands.[6] Subsequent cooling permits specific primers-shorts strands of RNA or DNA that complement a segment of the single DNA strands-to attach to the single DNA strands.[7] A polymerase then extends the primer to replicate the original double-stranded DNA.[8]

         DNA-binding fluorescent dyes are often added to the DNA sample during PCR procedures.[9] These dyes fluoresce strongly when bound to double-stranded DNA.[10] This enhances the PCR detection process by allowing researchers to monitor fluorescence while the temperature of the DNA sample is altered during the PCR process.[11] BioFire's products implement PCR in ways that provide unique advantages, such as decreasing the total time required for PCR amplification and increasing the quality of the reaction.[12]

         On January 16, 2001, the University of Utah Research Foundation obtained U.S. Patent No. 6, 174, 670 ('670 Patent), titled “Monitoring Amplification of DNA During PCR.”[13] BioFire is the exclusive licensee of the '670 Patent, which covers many of its products and methods.[14]The '670 Patent encompasses “[a] method of analyzing nucleic acid hybridization [that includes] (a) providing a mixture comprising a nucleic acid sample to be analyzed and a nucleic acid binding fluorescent entity; and (b) monitoring fluorescence while changing temperature at a rate of ≥0.1° C./second.”[15]

         The Research Foundation also owns U.S. Patent No. 7, 670, 832 ('832 Patent), titled “System For Fluorescence Monitoring, ” and BioFire is also its exclusive licensee.[16] The '832 Patent covers “[a] device for performing PCR and monitoring the reaction of a sample comprising a nucleic acid and a fluorescent dye[.]”[17]

         Defendant Fluidigm makes and sells products for the life science market, some of which use PCR.[18] One of these products is a system called the “BioMark, ” which is an analytical instrument for genetic analysis.[19] The BioMark performs PCR on mixtures containing DNA, polymerase, primers, and fluorescent dye within a vessel-also sold by Fluidigm-called an integrated fluidic circuit (IFC).[20] Another product Fluidigm sells is the Delta Gene assay, which contains primers used to replicate the target DNA sequence.[21] Fluidigm sells the BioMark, assays, and IFCs in Utah.[22] The combination of the BioMark, IFCs, and the Delta Gene assay used to analyze a sample containing a nucleic acid and fluorescent allegedly infringes at least one claim of both the '670 Patent and the '832 Patent.[23]

         II. Procedural History

         Since commencing this action on May 23, 2016, [24] Plaintiffs have twice amended their Complaint.[25] Fluidigm moved to dismiss each Complaint.[26] Plaintiffs filed their Second Amended Complaint-the operative pleading here-on March 10, 2017.[27] Before the court ruled on Fluidigm's third Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue, [28] the Supreme Court decided TC Heartland LLC v. Kraft Foods Group Brands LLC.[29]TC Heartland significantly altered the venue analysis in patent disputes.[30]

         Shortly after the Supreme Court decided TC Heartland, Fluidigm filed a Notice of Supplemental Authority, arguing “the TC Heartland decision is dispositive of the entirety of pending Motion to Dismiss, as dismissal for lack of venue would render the other bases moot.”[31]Plaintiffs initially disagreed that TC Heartland rendered venue improper in this district and sought to brief the matter.[32] But before the court considered TC Heartland's effect on the dispute, the court stayed and administratively closed the case pending completion of reexamination proceedings involving the '670 Patent.[33]

         On September 28, 2017-the day after a reexamination certificate was issued-Plaintiffs filed a Motion to Transfer.[34] Plaintiffs conceded venue was improper in this district and requested the court transfer the case to the United States District Court for the District of Delaware.[35] During a status conference, the parties agreed to re-brief Fluidigm's third Motion to Dismiss in light of TC Heartland.[36] The court did not, however, require Plaintiffs to refile their Motion to Transfer, which remains operative.[37]

         LEGAL STANDARD

         The patent venue statute requires a plaintiff bringing a patent infringement action against a domestic corporation to file suit in a judicial district “[1] where the defendant resides, or [2] where the defendant has committed acts of infringement and has a regular and established place of business.”[38] With respect to the first prong, the Federal Circuit had long held a patent defendant “resided” in any judicial district where the defendant was subject to the court's personal jurisdiction.[39] But the Supreme Court upended that precedent in TC Heartland, holding “a domestic corporation ‘resides' only in its State of Incorporation for purposes of the patent venue statute.”[40]

         To establish proper venue under the second prong, a plaintiff must demonstrate the alleged infringer both (1) committed past acts of infringement and (2) maintains a regular and established place of business within the judicial district.[41]

         ANALYSIS

         The parties devote significant portions of their briefs to whether the court may exercise personal jurisdiction over Fluidigm. But the parties agree that, post-TC Heartland, venue in this district is improper. The court must therefore either dismiss or transfer this case regardless of whether it can exercise personal jurisdiction over Fluidigm.[42] Accordingly, whether the court may exercise personal jurisdiction over Fluidigm is relevant only insofar as it bears on the court's decision to dismiss or transfer the case.

         I. Transfer or Dismissal Under 28 U.S.C. § 1406(a)

         Under 28 U.S.C. § 1406(a), “[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” As an initial matter, the court disagrees with Fluidigm's contention that dismissal is the “standard remedy” for improper venue under Section 1406(a).[43] Rather, “in most cases of improper venue the courts conclude that it is in the interest of justice to transfer to a proper forum rather than to dismiss.”[44]As other courts have persuasively concluded, “transfer is generally . . . more in the interest of justice than dismissal, ” and any doubts should be resolved “in favor of preserving the action.”[45]

         Because the Tenth Circuit has not defined the phrase “in the interest of justice” in Section 1406(a), the parties rely on Mann v. Automobile Protection Corporation[46] in assessing whether transfer or dismissal is appropriate.[47] The Mann court identified three factors to consider: “(1) whether the statute of limitations will bar Plaintiff from re-filing his complaint; (2) whether Plaintiff filed his complaint in this Court in bad faith or to harass Defendants; and (3) whether Plaintiff was forum shopping.”[48] Fluidigm further argues dismissal is appropriate where a plaintiff commits an obvious error in filing its action in the wrong court.[49] The court evaluates in turn each of the Mann factors and Fluidigm's obvious error argument.

         A. Mann Factors

         1. Whether a Statute of Limitations Bars Plaintiffs' Claims

         The court concludes this factor weighs heavily in favor of transferring the case. Fluidigm argues this factor supports dismissal because “no statute of limitations will prevent Plaintiffs from refiling in a proper venue.”[50] That's true. But Fluidigm's argument fails to account for the unique role 35 U.S.C. § 286 plays in the court's calculus.

         Section 286 limits recovery for any patent infringement to the six years preceding filing of the complaint.[51] Plaintiffs filed their Complaint on May 23, 2016.[52] That filing date permits Plaintiffs to recover damages incurred after May 23, 2010. But if the court dismisses this action, the six-year damages period resets, and Plaintiffs would be entitled only to damages incurred within the six years prior to the date of refiling. Thus, while Section 286 would not act as a complete bar to Plaintiffs' claims, its practical effect here could be to deprive Plaintiffs of a significant amount of potential damages.[53]

         Fluidigm argues such a result “is just a consequence of [Plaintiffs'] decision to file and maintain this lawsuit in a dubious venue without filing any protective actions in districts where jurisdiction and venue would be clear (e.g., Delaware or Northern California)[.]”[54] For the reasons explained below, however, the court disagrees that Plaintiffs filed suit in a “dubious” venue. Accordingly, the court finds this factor supports transfer in the interest of justice.

         2. Whether Plaintiffs Filed Their Complaint in Bad Faith

         Fluidigm concedes it “lacks evidence showing bad faith or an intention to harass” but nevertheless argues “the mere absence of improper conduct cannot weigh in favor of transfer in view of the other factors[.]”[55] The court disagrees. Evidence of bad faith or the absence of such evidence is the central focus of this element. Where no evidence of bad faith is present, this factor weighs in favor of transfer. Because transfer is generally the preferred remedy, cases should be transferred absent reasons to dismiss.[56] Fluidigm's admission it lacks evidence that Plaintiffs' suit was filed in bad faith or with an intent to harass is significant and supports transfer in the interest of justice.

         3. Whether Plaintiffs Were Forum Shopping

         The court concludes Plaintiffs did not engage in forum shopping by filing their Complaint in this court. Improper forum shopping occurs where a party chooses a forum it considers to be more favorable “without any legal or factual basis for doing so.”[57] By contrast, if federal jurisdiction “arguably” exists, a party has not engaged in improper forum shopping.[58]

         Here, Plaintiffs filed their action before the Supreme Court decided TC Heartland. When they commenced their suit, Plaintiffs advanced good-faith allegations this court could exercise personal jurisdiction over Fluidigm, which could have rendered venue proper under the then-applicable legal framework.[59] The court therefore cannot conclude Plaintiffs lacked a reasonable legal or factual basis for choosing this forum. This factor also supports transfer rather than dismissal.

         In sum, all three Mann factors support the conclusion that the interest of justice favors transferring, rather than dismissing, this action.

         B. Whether Plaintiffs Committed Obvious Error

         Fluidigm also maintains the court should refuse to transfer this case because personal jurisdiction and venue were obviously improper in this district when Plaintiffs initially filed suit.[60] Fluidigm asserts “a district court acts within its discretion when it finds that the interest of justice is not served by allowing a plaintiff whose attorney committed an obvious error in filing the plaintiff's action in the wrong court, and thereby imposed substantial unnecessary costs on both the defendant and the judicial system . . . simply to transfer his/her action to the proper court . . . .”[61] In effect, Fluidigm argues Plaintiffs' decision to file suit in this district was so obviously flawed they should be penalized for it.[62] The court disagrees.

         The standard Fluidigm advances-obvious error-is a stringent one. Plaintiffs did not commit such an error by filing suit in this district before TC Heartland was decided. Pre-TC Heartland, venue in patent actions was tied to personal jurisdiction. Even with the benefit of extensive briefing, it is not now obvious that this court lacks personal jurisdiction over Fluidigm. Nor was it obvious at the time this case was filed.[63] Plaintiffs argue Fluidigm purposefully directed its activity at Utah by directly selling three BioMarks in Utah and by continuing to sell IFCs and assays directly to customers in Utah for use with the BioMarks.[64] Even accepting Fluidigm's argument that only the 2010 BioMark sale is relevant to the court's personal jurisdiction analysis, [65] Plaintiffs maintain “the voluntary, direct sale of even one product to a consumer of a state can satisfy the requirements for exercising specific personal jurisdiction.”[66]Plaintiffs thus insist a single BioMark sale is enough for the court to conclude Fluidigm purposefully directed activity at Utah.[67]

         The court need not decide, however, whether the sale of a single BioMark machine in Utah could support the court's exercising personal jurisdiction over Fluidigm. It is enough that Plaintiffs advanced good-faith, plausible arguments personal jurisdiction existed in this district pre-TC Heartland. While Fluidigm maintains Plaintiffs invoked losing arguments, this does not render Plaintiffs' efforts obvious error. In short, the court declines Fluidigm's ...


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