Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_19-cv-06518/USCOURTS-cand-3_19-cv-06518-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338 Patent Infringement

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

NETSOC, LLC, 

Plaintiff, 

V. 

CHEGG INC., 

Defendant. 

NETSOC, LLC, 

Plaintiff, 

V. 

LINK.EDIN CORP., 

Defendant. 

NETSOC, LLC, 

Plaintiff, 

V. 

QUORA INC., 

Defendant. 

NETSOC, LLC, 

Plaintiff, 

V. 

OATH INC., 

Defendant. 

USDC-SDNY 

DOCUMENT 

ELECTRO NI CALLY FILED 

DOC#: 

DATE FILED: lu / z,, / 19 

MEMORANDUM OPINION & ORDER 

No. 18-CV-10262 (RA) 

No. 18-CV-12215 (RA) 

No. 18-CV-12250 (RA) 

No. 18-CV-12267 (RA) 

Case 3:19-cv-06518-VC Document 72 Filed 10/02/19 Page 1 of 11
RONNIE ABRAMS, United States District Judge: 

PlaintiffNetsoc, LLC brings claims for patent infringement against Defendants Chegg Inc., 

Linkedln Corp., Quora Inc., and Oath Inc., in four separate sections that were consolidated through 

claim construction on March 25, 2019. See 18-cv-10262 (RA), Dkt. 24. Defendant Quora moves 

to dismiss the action as against it for improper venue, pursuant to Fed. R. Civ. P. 12(b)(3), or, in 

the alternative to transfer venue, pursuant to 28 U.S.C. §§ 1404(a) or 1406(a). For the following 

reasons, NetSoc's case against Quora will be transferred to the Northern District of California. 

BACKGROUND 

Unless otherwise noted, the facts in this section are drawn from NetSoc's First Amended 

Complaint ("Compl.") and are accepted as true for the purposes of this motion. See Peerless 

Network, Inc. v. Blitz Telecom Consulting, LLC, No. 17-CV-1725 (JPO), 2018 WL 1478047, at *2 

(S.D.N. Y. Mar. 26, 2018). The Court also considers "evidence outside of the pleadings," including 

affidavits, but the facts are nonetheless construed in the light most favorable to Plaintiff. Id. 

I. Procedural History 

NetSoc filed a Complaint against Quora on December 27, 2018, asserting that Quora's 

website infringes U.S. Patent No. 9,978,107 (the '" 107 patent"), which NetSoc owns by 

assignment. On March 25, 2019, when the case was consolidated with the three other abovecaptioned actions, Quora filed the instant motion as well as a motion to dismiss pursuant to Fed. 

R. Civ. P. 12(b)(6). 

On July 9, 2019, NetSoc filed an Amended Complaint against Quora asserting, in place of 

the '107 patent, a related patent, U.S. Patent No. 9,218,591 (the "'591 patent"). NetSoc 

subsequently agreed to withdraw its claims against Quora with respect to the '107 patent with 

prejudice, rendering Quora's Rule 12(b)(6) motion moot. See Pl's July 23, 2019 Ltr. (Dkt. 56). 

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Quora then requested that the Court still consider its pending motion to dismiss for improper venue, 

as applied against the Amended Complaint, which the Court does so here. See Quora's July 26, 

2019 Ltr. (Dk:t. 57); August 20, 2019 Joint Status Ltr. at 8 (Dk:t. 58). 

II. The Parties 

NetSoc is a Texas Limited Liability Company with its principle place of business in Harris 

County, Texas. Compl., 1 (Dkt. 49). Quora is a domestic corporation organized under the laws 

of Delaware. NetSoc alleges, on information and belief, that Quora's principle place of business 

is in New York. Id. , 2. Quora, however, asserts that its principle place of business is in Mountain 

View, California. Kolovson Deel. , 2 (Dkt. 19). 

According to NetSoc, Quora sells products and performs services throughout New York 

that infringe various claims of the • 591 patent, including through its operation of the website, 

www.quora.com. Quora maintains by way of declaration that it does not own property in New 

York City, nor does it hold itself out as doing business from any employee's residence in New 

York City. Quora further attests that its primary operations are run out of its Mountain View 

offices, in which the employees with knowledge of the engineering and functionality of its website 

are located. 

Quora states that, on June 18, 2018, it hired a salesperson who worked remotely from his 

home in New York when not at Quora's Mountain View headquarters, where he was trained. This 

employee purportedly paid for his own living expenses. 

After this action was commenced, Quora entered into an agreement with the real estate 

company, WeWork, to have access to a shared work space in New York City. On January 15, 

2019, Quora states that its advertising team hired three employees that primarily work out of that 

work space when not in Mountain View. 

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LEGAL STANDARD 

In a patent infringement action, venue is exclusively governed by the patent venue statute, 

28 U.S.C. § 1400(b), which is interpreted in accordance with Federal Circuit law. See TC 

Heartland LLC v. Kraft Foods Grp. Brands LLC, 13 7 S. Ct. 1514, 1516 (2017); In re ZTE (USA) 

Inc., 890 F.3d 1008, 1113 (Fed. Cir. 2018). "[U]pon motion by the Defendant challenging venue 

in a patent case, the [p ]laintiff bears the burden of establishing proper venue." In re ZTA (USA) 

Inc., 890 F.3d at 1010. 

Pursuant to 28 U.S.C. § 1400(b), "[a]ny civil action for patent infringement may be brought 

in the judicial district [i] where the defendant resides, or [ii] where the defendant has committed 

acts of infringement and has a regular and established place of business." In applying the patent 

venue statute, the Court is mindful that it "should not be liberally construed in favor of venue." In 

re ZTE (USA) Inc., 890 F.3d at 1014; see also Peerless Network, Inc., 2018 WL 1478047, at *2 

(recognizing that "patent venue is narrower than general venue"). 

DISCUSSION 

The parties do not dispute that (1) a corporate defendant resides, for the purposes of 

§ l 400(b ), in its State of incorporation, TC Heartland LLC, 13 7 S. Ct. at 1156; and (2) Quora is 

incorporated in Delaware. Accordingly, venue in this district is not proper under the first prong 

of § 1400(b). Quora also does not appear to contest, for purposes of this motion, Plaintiffs 

allegations that Quora has infringed the '591 patent in this district. The principle issue to be 

decided, then, is whether NetSoc has met its burden of demonstrating that Quora has a "regular 

and established place of business" in this district. The Court concludes that NetSoc has not. 

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I. Timing of Venue Analysis 

As an initial matter, Quora is correct that venue is to be analyzed based on the facts existing 

at the time this action was commenced. Although the cases Quora cites in support of this 

proposition dealt with venue under the general venue statute, 28 U.S.C. § 1391, the Court will 

apply the same principles with respect to the patent venue statute. 

The Court has not identified any Federal Circuit decision addressing the point in time in 

which venue is to be analyzed under § l 400(b ). But other courts have persuasively concluded that 

venue under § 1400(b) should be analyzed, as under 28 U.S.C. § 1391, at the time the case is 

brought. In Int 'l Techs. & Sys. Corp. v. Samsung Elecs. Co. Ltd., for example, the court rejected 

the argument that venue became proper in the Central District of California under § l 400(b) upon 

the defendant's merger there with another company, because the merger had occurred after the 

complaint was filed. No. SA CV 17-1748-DOC (JDEx), 2018 WL 4963129, at *6 (C.D. Cal. June 

22, 2018). The court reasoned that, because § 1400(b) refers to where a civil action "may be 

brought," venue should be assessed based on the facts existing at the time the plaintiff commences 

the action. This Court agrees. As another court has noted, "bringing" a civil action refers to the 

act of filing a complaint, and analyzing venue at that time comports with the Federal Circuit's 

reminder that venue determinations "must be closely tied to the language of the statue." In re Cray 

Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017); Pers. Audio, LLC v. Google, Inc., 280 F. Supp. 3d 922, 

930 (E.D. Tex. 2017). Whether Quora has a "regular and established place of business" in this 

district will therefore be assessed as of December 12, 2018, when NetSoc brought its case against 

Quora. 1 

1 Quora also quotes from Keitt v. New York City, in which that court stated that "venue is determined based 

upon the parties and allegations at the time the operative complaint is filed, not subsequent events." 882 F. Supp. 2d 

412,459 n. 44 (S.D.N.Y. 2011) (emphasis added). Here, the operative complaint is NetSoc's Amended Complaint, 

filed on July 9, 2019. Under Keitt, then, the facts concerning Quora's January 15, 2019 rental ofa WeWork space in 

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A. Regular and Established Place of Business 

The following test set forth by the Federal Circuit in In re Cray, Inc., governs whether 

venue is proper under the "regular and established place of business" prong of§ 1400(b): "(1) 

there must be a physical place in the district; (2) it must be a regular and established place of 

business; and (3) it must be the place of the defendant." 871 F.3d at 1360. To satisfy the "physical 

place" requirement, there must be "a physical, geographical location in the district from which the 

business of the defendant is carried out." Id. at 13 62. To be "regular and established," the place 

of business must "operate[] in a steady, uniform, orderly, and methodical manner," and it must be 

"settled certainly, or fixed permanently." Id. And for the place of business to be deemed that "of 

the defendant" the defendant "must establish or ratify the place of business." Id at 1363. In other 

words, the place of business cannot be "solely a place of the defendant's employee." Id. 

To determine whether a defendant has established or ratified a place of business, courts 

consider various factors such as: "(1) whether the defendant owns, leases, or otherwise exercises 

control over the premises; (2) whether the defendant conditioned employment on an employee's 

continued residence in the district; (3) whether the defendant stored inventory there to be sold or 

distributed from that place; (4) whether the defendant made outward representations that the 

physical location was its place of business; and (5) how the alleged place of business in the district 

compares to other places of business of the defendant in other venues." Zaxcom, Inc. v. 

Lectrosonics, Inc., No. 17-CV-3408 (NGG) (SJB), 2019 WL 418860, at *5 (E.D.N.Y. Feb. 1, 

2019) (citing Cray, 871 F.3d at 1363-1364). 

New York should be considered when detennining whether Quora has a regular and established place of business in 

this district. The majority offederal courts, however, have analyzed venue based on the time the action was broughti.e., the date the original, not the operative, complaint was filed. See, e.g., Bell v. Classic Auto Grp., Inc., No. 04 Civ. 

0693(PKC), 2005 WL 659196, at *5 (S.D.N.Y. Mar. 21, 2005); Greene v. Sha-Na-Na, 637 F. Supp. 591, 600 (D. 

Conn. 1996) (citing cases). Because that view is more consistent with the language of§ 1400(b)--and helps further 

the goal of preventing parties from manufacturing venue-the Court considers Quora's motion based on the facts 

existing at the time NetSoc commenced the action, and not when the Amended Complaint was filed. 

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Here, NetSoc fails to meet its burden of establishing that the Cray requirements have been 

satisfied. NetSoc contends that Quora has maintained a physical address in New York prior to this 

action based on business records obtained online from the research company, LexisNexis. The 

records attached to NetSoc's opposition, however, merely identify unnamed "Business 

Registration Officers," that purportedly hold a position entitled "CONT A," located at a New York 

address. But Quora claims that it has no offices at the address, and the remainder of the records 

do not directly link the address, nor any other New York address, to Quora. Thus, even to the 

extent the New York address could constitute a physical place of business, NetSoc has alleged no 

facts to rebut Quora' s assertion that it does not conduct business there. The New York address, 

therefore, does not establish venue. Similarly, the fact that Quora has a registered agent for service 

of process located in New York "has no bearing" on whether Quora maintains a physical place in 

the district upon which venue could be predicated. Symbology Innovations, LLC v. Lego Sys., Inc., 

282 F. Supp. 3d 916,930 (E.D. Va. 2017); see also Cray, 871 F.3d at 1362-63. 

The Court further rejects NetSoc's suggestion that the home of the single Quora employee 

who worked from there, at the time this suit was filed, constitutes a place of business belonging to 

Quora. Netsoc does not allege any facts to rebut Quora's assertions that the employee paid for his 

own living expenses or that it does not hold itself out as doing business from any employee's New 

York residence. Nor does NetSoc allege any basis to infer that the employee's employment was 

conditioned on him working in New York, or that he was selling Quora's products from his home. 

Moreover, it is not even clear whether the home of this employee is located in this judicial district 

as opposed to one in, say, Brooklyn or Queens. NetSoc has thus failed to demonstrate that the 

employee's home constitutes Quora's place of business, as Cray requires. See Cray, 871 F.3d at 

1365 (finding an employee's home office was not the defendant's place of business because the 

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defendant did not appear to "own[], lease[], or rent[] any portion" of the home, the employee's 

employment was not conditioned on his continued residence in the district, and plaintiff pointed 

to no evidence that defendant held out the employee's home as its business); Zaxcom, Inc. v. 

Lectrosonics, Inc., No. 17-CV-3408 (NGG) (SJB), 2019 WL 418860, at *5-6 (E.D.N.Y. Feb. 1, 

2019) (same, even where some of the defendant's inventory was stored in the employee's home). 

Finally, NetSoc's reference in the Complaint to Quora's website cannot constitute a basis 

for finding venue. Cray made clear that the physical place requirement must not "be read to refer 

merely to a virtual space or to electronic communications from one person to another." 871 F.3d 

at 1362. NetSoc has, accordingly, failed to establish that venue is proper in this district. 

II. Venue-Related Discovery 

In opposing Quora's motion, NetSoc requests that it be permitted to conduct venue 

discovery. That request is denied. 

The parties do not address which circuit's law applies when considering a request for venue 

discovery. The Court, however, has not been able to identify any Federal Circuit case, nor any 

Second Circuit case, that articulates a standard for venue-related discovery. Other district courts 

have, by comparison, applied regional circuit law concerning venue discovery in patent cases (to 

the extent any exists) and failing that, the regional circuit's law on jurisdictional discovery. See, 

e.g., Novartis Pharms. Corp. v. Accord Healthcare Inc., No. 18-1043-LPS, 2019 WL 2502535, at 

*3-5 (D. Del. June 17, 2019). Following that approach here, the Court will apply Second Circuit 

law concerning jurisdictional discovery to Net Soc' s request for venue discovery. 2 

2 The Federal Circuit has also suggested that regional circuit law applies when determining whether a plaintiff 

has "made a sufficient threshold showing to merit jurisdictional discovery." Commissariat A L 'Energie Atomique v. 

Chi Mei Optoelectronics Corp., 395 F.3d 1315, 1323 (Fed. Cir. 2005) (citing Third Circuit law in support of its finding 

that plaintiff had made a sufficient showing to warrant jurisdictional discovery, while noting that Federal Circuit law 

governs "the relevance" of such a request); see also Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 

1023 n.2 (Fed. Cir. 2009) ( applying regional circuit law as to whether the district court erred in denying jurisdictional 

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Although "[t]he standard for awarding jurisdictional discovery is low," Universal Trading 

& Inv. Co. v. Credit Suisse (Guernsey) Ltd, 560 F. App'x 52, 55-56 (2d Cir. 2014), a court may 

deny such discovery where a plaintiff"do[es] not establish a prima facie case that the district court 

has jurisdiction over the defendant." Chirag v. MT Marida Marguerite Schiffahrts, 604 F. App'x 

16, 18-19 (2d Cir. 2015). "A prima facie case requires non-conclusory fact-specific allegations or 

evidence showing that activity that constitutes the basis of jurisdiction has taken place." Id. 

Although a court may still permit jurisdictional discovery where a plaintiff has not made a prima 

facie showing of jurisdiction, it need "not draw 'argumentative inferences' in favor of a plaintiff 

who has failed to allege even bare facts" establishing that jurisdiction is proper. Smit v. lsiklar 

Holding A.S., 354 F. Supp. 2d 260, 263--64 (S.D.N.Y. 2005) (citing Robinson v. Overseas Military 

Sales Corp., 21 F.3d 502,507 (2d Cir.1994). 

Applying that standard in the context of the venue discovery sought in this case, NetSoc 

has failed to allege fact-specific allegations or evidence that could support a finding that venue is 

proper over Quora. NetSoc also fails to make any showing that the discovery it seeks is "likely to 

uncover additional facts" that could support a finding that the home of the single sales employee 

constituted a place of business of Quora, or that it was "regular and established." Cf Smit v. 

lsiklar Holding A.S., 354 F. Supp. at 263-64 (noting, in the context of jurisdictional discovery, 

that "[t]he pleadings must indicate ... that limited discovery is likely to uncover additional facts 

supporting jurisdiction"). 

Indeed, NetSoc does not allege any basis to infer that Quora may have stored inventory at 

the employee's home; that Quora conditioned his residence in New York; that it prevented him 

from leaving New York on his own volition; or that it required him to work from his home in New 

discovery where the plaintiff"provided ... no reasons for its request or particular areas to which discovery would be 

directed"). 

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York. NetSoc also does not point to any marketing or advertising suggesting that Quora held out 

the employee's home as part of its business, or that the employee actually engaged in business 

from his home. Instead, NetSoc submits a list of factors that the Federal Circuit has considered in 

various cases as relevant to analyzing venue, and summarily asserts that it should therefore be 

entitled to discovery to determine whether those factors are present here. But NetSoc cannot be 

entitled to venue discovery based on pure speculation. Even in a case where a plaintiff has set 

forth facts demonstrating that a single at-home sales employee has conducted sales in the districtwhich NetSoc has not-a court has still denied venue discovery under the Third Circuit's 

seemingly more liberal standard. See Novartis Pharms. Corp., 2019 WL 2502535, at *3 (rejecting 

the plaintiffs contention that venue under § 1400(b) may tum out to be proper "based on the 

existence of a single ... employee" of defendant who lived and worked in the district, and denying 

venue discovery under the Third Circuit's standard which permits jurisdictional discovery "unless 

a plaintiffs claim is clearly frivolous"). To permit NetSoc to obtain such venue discovery in this 

case would effectively authorize it to engage in "an unfounded fishing expedition." RSM Prod. 

Corp. v. Fridman, 643 F. Supp. 2d 382, 402 (S.D.N.Y. 2009) (denying jurisdictional discovery 

based on plaintiffs "expectation" that it would uncover additional facts supporting 

jurisdiction), ajf'd, 387 Fed. App'x 72 (2d Cir. 2010). NetSoc's request for venue discovery is, 

therefore, denied. 

III. Transfer 

Pursuant to 28 U.S.C. §1406(a), where, as here, venue is improper, the court must decide 

whether to dismiss the action, or, if it is in the interest of justice, to transfer the action to a venue 

"in which it could have been brought." This decision "lies within the sound discretion of the district 

court." Blakely v. Lew, 607 Fed. App'x 15, 18 (2d Cir. 2015). Dismissal, as opposed to transfer, is 

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advisable when the case is a "sure loser." Gonzalez v. Hasty, 65 l F.3d 318, 324 (2d Cir. 2011 ). 

While the Court is skeptical about Plaintiff's likelihood of success-particularly in light of the 

decision from the Northern District of Texas invalidating the related' 107 patent, see NetSoc, LLC 

v. Match Grp., LLC, No. 3:18-CV-01809-N, 2019 WL 3304704 (N.D. Tex. July 22, 2019}-the 

Court is not now in a position to conclude that Plaintiff's infringement claim is "clearly doomed," 

such that dismissal is warranted. Daniel v. Am. Bd. of Emergency Bd., 428 F.3d 408,436 (2d Cir. 

2005). As the parties do not dispute that this case could have been brought in the Northern District 

of California, and NetSoc has not established that it would be prejudiced by a transfer there, 

Quora's request that the case be transferred to that district is GRANTED. 

CONCLUSION 

For the foregoing reasons, Quora's motion to transfer NetSoc's case against it, pursuant 

to 28 U.S.C. § 1406, is GRANTED. The Clerk of Court is directed to transfer Case No. 18-CV12250 to the Northern District of California, and to remove that case from this consolidated 

action. 

SO ORDERED. 

Dated: October 2, 2019 

New York, New York 

1e Abrams 

United States District Judge 

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