In re Google LLC

949 F.3d 1338

IN RE: GOOGLE LLC, Petitioner

2019-126

United States Court of Appeals, Federal Circuit.

Filed: February 13, 2020

ORDER

Dyk, Circuit Judge.

Google LLC ("Google") petitions for a writ of mandamus ordering the United States District Court for the Eastern District of Texas to dismiss the case for lack of venue. See Super Interconnect Techs. LLC v. Google LLC , No. 2:18-CV-00463-JRG, 2019 WL 3717683, 2019 U.S. Dist. LEXIS 132005 (E.D. Tex. Aug. 7, 2019). We hold that mandamus is warranted and order that the case either be dismissed or transferred.

BACKGROUND

Super Interconnect Technologies LLC ("SIT") sued Google for patent infringement in the Eastern District of Texas. Under the patent venue statute, 28 U.S.C. § 1400(b), "[a]ny 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." SIT filed its suit after the Supreme Court’s decision in TC Heartland LLC v. Kraft Foods Group Brands LLC , ––– U.S. ––––, 137 S. Ct. 1514, 1517, 197 L.Ed.2d 816 (2017), which held that "a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute," and this court’s decision in In re Cray, Inc. , 871 F.3d 1355, 1360 (Fed. Cir. 2017), which held that a "regular and established place of business" under the patent venue statute must be: (1) "a physical place in the district"; (2) "regular and established"; and (3) "the place of the defendant."

SIT alleged that "venue is proper ... under 28 U.S.C. § 1400(b) because Google has committed acts of infringement in the District and has a regular and established place of business in this District." Super Interconnect , 2019 WL 3717683, at *1, 2019 U.S. Dist. LEXIS 132005, at *3. Google’s business includes providing video and advertising services to residents of the Eastern District of Texas through the Internet. SIT’s allegation of venue was based on the presence of several Google Global Cache ("GGC") servers, which function as local caches for Google’s data.¹

The GGC servers are not hosted within datacenters owned by Google. Instead, Google contracts with internet service providers (ISPs) within the district to host Google’s GGC servers within the ISP’s datacenter. When a user requests Google’s content, the ISP attempts to route the user’s request to a GGC server within its own network (within the district) before routing the request to Google’s central data storage servers (outside the district). The GGC servers cache only a small portion of content that is popular with nearby users but can serve that content at lower latency—which translates to shorter wait times—than Google’s central server infrastructure. This performance benefit is in part due to the physical proximity of the GGC servers to the ISP’s users. This arrangement allows Google to save on bandwidth costs and improve user experience on its various platforms.

At the time of the complaint, Google had entered into contracts with two ISPs to host GGC servers owned by Google in the Eastern District of Texas: Cable One Inc. ("Cable One") and Suddenlink Communications ("Suddenlink"). The contracts provided that the ISPs would host Google’s GGC servers in their data centers. Specifically, the GGC servers are installed in the ISP’s server racks, which are cabinets that accept standard server components. Each contract states that the ISP must provide "[r]ack space, power, network interfaces, and IP addresses," for the GGC servers, and provide "[n]etwork access between the [GGC servers] and [the ISP’s] network subscribers." Supplemental Record, Dkt. 31, Ex. A, at 1; id. , Ex. B, at 1. The contracts permit the ISPs to select the rack space for the GGC servers, but they tightly restrict the ISPs’ ability to relocate the servers without Google’s permission once a location is selected. Id. , Ex. A, at 2; id. , Ex. B at 2. The contracts also strictly limit any unauthorized access to the space used by Google’s servers. Id. , Ex. A, at 6–7; id. , Ex. B, at 5. The contracts state that the ISPs are required to provide "installation services," i.e., installing the GGC servers in the server racks. Id. , Ex. A, at 1; id. , Ex. B at 1. While the contracts forbid the ISPs to "access, use, or dispose of" the GGC servers without Google’s permission, id. , Ex. A, at 2; id. , Ex. B at 2, they also require the ISPs to provide "[r]emote assistance services," which "involve basic maintenance activities" performed on the GGC servers by the ISP’s on-site technician, if requested by Google, id. , Ex. A, at 1, 6; id. , Ex. B, at 1, 5. It is undisputed that no Google employee performed installation of, performed maintenance on, or physically accessed any of the GGC servers hosted by Cable One or Suddenlink.

Google moved to dismiss the complaint for improper venue under 28 U.S.C. § 1406(a) and Federal Rule of Civil Procedure 12(b)(3). The district court denied Google’s motion and, relying on its previous decision in SEVEN Networks LLC v. Google LLC , 315 F. Supp. 3d 933 (E.D. Tex. 2018), found that the GGC servers qualified as Google’s "regular and established place of business" under the test articulated in Cray .

Google now petitions for a writ for mandamus directing the district court to dismiss the case for lack of venue under § 1400(b). Acushnet and 17 other companies filed an amicus brief in support of Google’s petition. This court heard oral argument on December 13, 2019.

DISCUSSION

I

This court "may issue all writs necessary or appropriate in aid of [its] jurisdiction[ ] and agreeable to the usages and principles of law" under the All Writs Act. 28 U.S.C. § 1651(a). The Supreme Court has held that three conditions must be met before a writ may issue: (1) the petitioner "[must] have no other adequate means to attain ... relief," (2) the petitioner must show that the right to mandamus is "clear and indisputable," and (3) the court must be "satisfied that the writ is appropriate under the circumstances." Cheney v. U.S. Dist. Court for D.C. , 542 U.S. 367, 380, 124 S.Ct. 2576, 159 L.Ed.2d 459 (2004) (first alteration in original) (internal quotation marks and citations omitted).

The Supreme Court has confirmed that the requirements for mandamus are satisfied when the district court’s decision involves "basic" and "undecided" legal questions. Schlagenhauf v. Holder , 379 U.S. 104, 110, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964). In such situations, a district court’s order may constitute a "clear abuse of discretion" for which mandamus relief is the only adequate relief. Id. Applying Schlagenhauf , we have found mandamus "necessary to address the effect of the Supreme Court’s decision in TC Heartland , which itself was yet another [improper-venue] case." In re BigCommerce, Inc. , 890 F.3d 978, 981 (Fed. Cir. 2018) ; see also In re ZTE (USA) Inc. , 890 F.3d 1008, 1011 (Fed. Cir. 2018) ; In re Micron Tech., Inc. , 875 F.3d 1091, 1095 (Fed. Cir. 2017) ; Cray , 871 F.3d at 1359.

In SEVEN Networks , the same district court found that venue was proper under what the district court characterized here as "identical facts." Super Interconnect , 2019 WL 3717683, at *1, 2019 U.S. Dist. LEXIS 132005, at *4. Google also petitioned for mandamus in that case, and this court denied that petition on the ground that Google failed to show that the district court’s ruling implicated the "special circumstances justifying mandamus review of certain basic, unsettled, recurring legal issues over which there is considerable litigation producing disparate results." In re Google LLC , No. 2018-152, 2018 WL 5536478, at *2, 2018 U.S. App. LEXIS 31000 at *6 (Fed. Cir. Oct. 29, 2018) (citation omitted).

Our previous denial of mandamus was based on (1) our observation that "it [was] not known if the district court’s ruling involves the kind of broad and fundamental legal questions relevant to § 1400(b) that we have deemed appropriate for mandamus," and (2) the lack of "disagreement among a large number of district courts." Id. We concluded that "it would be appropriate to allow the issue to percolate in the district courts so as to more clearly define the importance, scope, and nature of the issue for us to review." Id. Judge Reyna dissented from our decision, id. at *4, 2018 U.S. App. LEXIS 31000, at *10 (Reyna, J., dissenting), and dissented to the court’s denial of rehearing en banc, joined by Judge Newman and Judge Lourie, In re Google LLC , 914 F.3d 1377, 1378 (Fed. Cir. 2019) (Reyna, J., dissenting).

Since our decision in Google , three related developments have convinced us that mandamus is appropriate to resolve this venue issue. First, the prediction of our dissenting colleagues has proven accurate, and there are now a significant number of district court decisions that adopt conflicting views on the basic legal issues presented in this case.² Second, experience has shown that it is unlikely that, as these cases proceed to trial, these issues will be preserved and presented to this court through the regular appellate process. "[W]hile an appeal will usually provide an adequate remedy for a defendant challenging the denial of an improper-venue motion, there may be circumstances in which it is inadequate." In re HTC Corp. , 889 F.3d 1349, 1354 (Fed. Cir. 2018). While not alone sufficient to justify mandamus, the substantial expense to the parties that would result from an erroneous district court decision confirms the inadequacy of appeal in this case. See In re BP Lubricants USA, Inc. , 637 F.3d 1307, 1313 (Fed. Cir. 2011) ("Not all circumstances in which a defendant will be forced to undergo the cost of discovery and trial warrant mandamus."). Finally, the wisdom of our decision to allow the issues to "percolate in the district courts" has been borne out, Google , 2018 WL 5536478, at *5, 2018 U.S. App. LEXIS 31000, at *8, as additional district court decisions have...