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Hildebrand v. Wilmar Corp.

United States District Court, D. Colorado

March 29, 2018

DAVID L. HILDEBRAND, Plaintiff,
v.
WILMAR CORPORATION, Defendant.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          Michael E. Hegarty, United States Magistrate Judge.

         Defendant Wilmar Corporation seeks to dismiss this patent infringement case pursuant to Federal Rule of Civil Procedure 12(b)(3). Although Wilmar requests oral argument, I find that further argument would not assist in the adjudication of this motion.

         I recommend granting Wilmar's Motion to Dismiss. I first find that, under 28 U.S.C. § 1400(b), venue is not proper in the United States District Court for the District of Colorado. Additionally, I recommend dismissing this case without prejudice, because Plaintiff David L. Hildebrand has not shown that the interests of justice favor transferring the case to a different district. Accordingly, I decline to reach Wilmar's argument that dismissal with prejudice is appropriate pursuant to Federal Rule of Civil Procedure 12(b)(6).

         BACKGROUND

         I. Facts

         The following are factual allegations Mr. Hildebrand makes in his Complaint. Between 2007 and 2009 Mr. Hildebrand learned that Wilmar was importing and distributing goods that duplicated his patented product. Compl. 2, ECF No. 1. As a result, in February 2009 Mr. Hildebrand filed a complaint in this District for patent infringement against Wilmar and several other infringing corporations. Id. Wilmar and Mr. Hildebrand ultimately settled that case. Id. at 3. Pursuant to the settlement agreement, Wilmar paid Mr. Hildebrand a fixed amount to compensate him for Wilmar's past and current sales of the allegedly infringing product. Id. at 3-4; Settlement Agreement 1-2, ECF No. 8-1. Additionally, Wilmar agreed to pay Mr. Hildebrand a royalty for any future sales of products covered by Mr. Hildebrand's patent. Settlement Agreement 2. According to Mr. Hildebrand, Wilmar has manufactured, sold, and used products that infringe his patent without paying the required royalty. Compl. 4.

         II. Procedural History

         Based on the above allegations, Mr. Hildebrand filed his Complaint on November 22, 2017. Compl., ECF No. 1. Mr. Hildebrand asserts two claims for relief: (1) infringement of his patent in violation of 35 U.S.C. § 271(a), and (2) an accounting of all income Wilmar realized as a result of its infringing acts. Id. at 4-6.

         On December 21, 2017, Wilmar responded to the Complaint by filing the present Motion to Dismiss and Alternative Motion to Transfer, ECF No. 7. Wilmar contends the Court should dismiss this case, because venue is improper in the District of Colorado pursuant to 28 U.S.C. § 1400(b). Id. at 4-8. Specifically, Wilmar asserts it neither resides nor has a regular and established place of business in Colorado. Id. at 6. Wilmar further argues the interests of justice do not favor transferring this case. Id. at 8. Alternatively, Wilmar asserts that Mr. Hildebrand fails to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Id. at 8-13.

         In response, Mr. Hildebrand first argues the District of Colorado is a proper venue. Resp. to Mot. to Dismiss 12, ECF No. 21. According to Mr. Hildebrand, the stores through which Wilmar sells its goods (including in Colorado) constitute established places of business of Wilmar. Id. Furthermore, Mr. Hildebrand contends that he states a patent infringement claim. Id. at 13-14. Wilmar subsequently filed a Reply in Support of its Motion, ECF No. 28.

         LEGAL STANDARDS

         I. Dismissal under Fed.R.Civ.P. 12(b)(3)

         “The standard under 12(b)(3) is generally the same as a motion to dismiss for lack of personal jurisdiction.” H & H Transformer, Inc. v. Battelle Energy All., LLC, No. 09-cv-00442-WYD-BNB, 2009 WL 3530370, at *3 (D. Colo. Oct. 23, 2009). Thus, the plaintiff bears the burden of making a prima facie showing that venue is proper. Behegen v. Amateur Basketball Ass'n, 744 F.2d 731, 733 (10th Cir. 1984); Nagim v. Jackson, No. 10-cv-00328-PAB-KLM, 2010 WL 4318896, at *2 (D. Colo. Aug. 10, 2010). In evaluating the sufficiency of the plaintiff's showing, courts must accept the plaintiff's allegations as true. Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995).

         28 U.S.C. § 1400(b) governs venue determinations in patent infringement cases. See TC Heartland, LLC v. Kraft Foods Grp. Brands, LLC, 137 S.Ct. 1514, 1519 (2017) (“§1400(b) ‘is the sole and exclusive provision controlling venue in patent infringement actions, and . . . is not to be supplemented by . . . § 1391(c).'” (quoting Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 229 (1957), superseded by statute on other grounds)). Section 1400(b) provides that venue is proper “in the judicial district where the defendant ...


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