United States Court of Appeals 

for the Federal Circuit ______________________ 

IN RE: CRAY INC.,

Petitioner

______________________ 

2017-129

______________________ 

On Petition for Writ of Mandamus to the United 

States District Court for the Eastern District of Texas in 

No. 2:15-cv-01554-JRG, Judge J. Rodney Gilstrap.

______________________ 

ON PETITION

______________________ 

Before LOURIE, REYNA, and STOLL, Circuit Judges. 

LOURIE, Circuit Judge. 

O R D E R

Cray Inc. (“Cray”) petitions for a writ of mandamus 

vacating the order of the United States District Court for 

the Eastern District of Texas denying its motion to transfer the case to the United States District Court for the 

Western District of Wisconsin. See Raytheon Co. v. Cray, 

Inc., No. 2:15-cv-01554-JRG, 2017 WL 2813896 (E.D. Tex. 

June 29, 2017) (“Transfer Order”). Raytheon Company

(“Raytheon”) opposes the petition. The district court 

misinterpreted the scope and effect of our precedent in 

determining that Cray maintained “a regular and established place of business” in the Eastern District of Texas 

within the meaning of 28 U.S.C. § 1400(b). Accordingly, 
2 IN RE: CRAY INC. 

the court’s decision refusing transfer pursuant to 28 

U.S.C. § 1406(a) was an abuse of discretion. We therefore

grant Cray’s petition for a writ of mandamus and direct 

transfer of the case.

BACKGROUND

This petition arises from a patent infringement action 

filed by Raytheon against Cray in the Eastern District of 

Texas. Cray sells advanced supercomputers that Raytheon accuses of infringement. Cray is a Washington corporation with its principal place of business located there. 

It also maintains facilities in Bloomington, Minnesota; 

Chippewa Falls, Wisconsin; Pleasanton and San Jose, 

California; and Austin and Houston, Texas. 

Although Cray does not rent or own an office or any 

property in the Eastern District of Texas, it allowed Mr. 

Douglas Harless and Mr. Troy Testa to work remotely 

from their respective homes in that district. Transfer 

Order, 2017 WL 2813896, at *1–2 & n.1. Mr. Testa 

worked for Cray as a senior territory manager while 

residing in the district from 2010 to 2011 before the 

underlying suit was filed. Id. at *1 n.1

Mr. Harless worked as a “sales executive” for approximately seven years with associated sales of Cray systems

in excess of $345 million. Id. at *1. Mr. Harless’s responsibilities also included “new sales and new account development in [the] Central U.S.” and “management of key 

accounts within the Financial, Biomedical and Petroleum 

Industries.” Id. (alteration in original) (quotation marks 

omitted). Cray’s “Americas Sales Territories” map, an 

internal document, identified Mr. Harless as a “Named 

Account Manager” and his location at his Eastern District 

of Texas personal home. Id. Mr. Harless received reimbursement for his cell phone usage for business purposes, 

internet fees, and mileage or “other costs” for business 

travel. Id. Cray provided Mr. Harless with “administrative support” from its Minnesota office. Id. He provided 
IN RE: CRAY INC. 3

“price quotations” to customers, listing himself as the 

“account executive” and the person who prepared the 

quotation. Id. at *6. The communications also identified 

his home telephone number as his “office” telephone 

number with an Eastern District of Texas area code. Id. 

Mr. Harless, however, did not maintain Cray products 

at his home, nor did he maintain product literature at his 

home because it was available online. Id. at *9. It is 

undisputed that Cray never paid Mr. Harless for the use 

of his home to operate its business, or publicly advertised 

or otherwise indicated that his home residence was a 

Cray place of business.

Cray moved to transfer this suit under 28 U.S.C. 

§ 1406(a), which provides that “[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.” Cray argued that it 

does not “reside” in the Eastern District of Texas in light 

of the Supreme Court’s decision in TC Heartland LLC v. 

Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017). 

The district court agreed that Cray does not reside in the 

district. Transfer Order, 2017 WL 2813896, at *4.

Cray further argued that venue was improper in the 

Eastern District of Texas because Cray had neither 

committed acts of infringement, nor maintained a regular 

and established place of business within that district. 

The district court, however, rejected that argument. The 

court found that Mr. Harless’s activities were factually 

similar to the activities performed by the representatives 

in In re Cordis Corp., 769 F.2d 733 (Fed. Cir. 1985), in 

which this court rejected a mandamus request to reverse 

an order denying transfer for improper venue. See Transfer Order, 2017 WL 2813896, at *8–10. The court did not 

rely on Mr. Testa’s activities in determining that venue 

was proper.
4 IN RE: CRAY INC. 

Although the district court found that Cordis resolved 

this case, the district court then went on “[f]or the benefit 

of” other litigants and counsel to set out four factors for 

inquiries into what constitutes a regular and established 

places of business “in the modern era,” including physical 

presence, defendant’s representations, benefits received, 

and targeted interactions with the district. Id. at *11–14. 

The court, however, “decline[d] to expressly apply the 

factors . . . in this particular case; although, [it noted that 

it was] satisfied that had it done so, the result would 

remain the same.” Id. at *14 n.13.

Cray petitions for a writ of mandamus directing reversal of the district court’s denial of its motion to transfer venue and directing the district court to transfer this 

case to the Western District of Wisconsin pursuant to 28 

U.S.C. § 1406(a). 

DISCUSSION

I. The Mandamus Standard

We may issue a writ under the All Writs Act, 28 

U.S.C. § 1651(a), as “‘necessary or appropriate in aid of’ 

our jurisdiction.” Miss. Chem. Corp. v. Swift Agric. 

Chems. Corp., 717 F.2d 1374, 1379 (Fed. Cir. 1983) (quoting 28 U.S.C. § 1651(a)). Mandamus is reserved for 

exceptional circumstances. Bankers Life & Cas. Co. v. 

Holland, 346 U.S. 379, 382–83 (1953). A writ of mandamus “is appropriately issued, however, when there is 

‘usurpation of judicial power’ or a clear abuse of discretion.” Schlagenhauf v. Holder, 379 U.S. 104, 110 (1964) 

(quoting Bankers Life, 346 U.S. at 383).

A writ of mandamus may issue where: (1) the petitioner has “no other adequate means to attain the relief 

he desires”; (2) the petitioner shows “his right to mandamus is ‘clear and indisputable’”; and (3) the issuing court 

is “satisfied that the writ is appropriate under the circumstances.” In re TC Heartland LLC, 821 F.3d 1338, 
IN RE: CRAY INC. 5

1341 (Fed. Cir. 2016) (quoting Cheney v. U.S. Dist. Court 

for the Dist. of Columbia, 542 U.S. 367, 380–81 (2004)), 

rev’d and remanded sub nom., on other grounds, TC 

Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. 

Ct. 1514 (2017). Similarly, mandamus may be appropriate, as it is here, to decide issues “important to ‘proper 

judicial administration.’” In re BP Lubricants USA Inc., 

637 F.3d 1307, 1313 (Fed. Cir. 2011) (quoting LaBuy v. 

Howes Leather Co., 352 U.S. 249, 259–60 (1957)). Additionally, the Supreme Court has approved the use of 

mandamus to decide a “basic [and] undecided” legal 

question when the trial court abused its discretion by 

applying incorrect law. Schlagenhauf, 379 U.S. at 110.

 That is the circumstance here: the district court 

misunderstood the scope and effect of our decision in 

Cordis, and its misplaced reliance on that precedent led 

the court to deny the motion to transfer, which we find to 

have been an abuse of discretion. 

As Cray points out, for nearly the last 30 years, venue 

in patent infringement cases has largely turned on 

whether a defendant “resides” in the district in question. 

Following the Supreme Court’s recent decision in TC 

Heartland, litigants and courts are raising with increased 

frequency the question of where a defendant has a “regular and established place of business.” See, e.g., Transfer 

Order, 2017 WL 2813896, at *10 (“Since the Supreme 

Court’s decision in TC Heartland, this Court has received 

a number of motions to dismiss or transfer based on 

improper venue.”); Regenlab USA LLC v. Estar Techs. 

Ltd., No. 16-CV-08771 (ALC), 2017 WL 3601304, at *2 

(S.D.N.Y. Aug. 17, 2017) (“In light of TC Heartland, the 

parties agree that venue is improper . . . under the first 

prong of § 1400(b) . . . . Therefore, the question presented 

today is whether discovery is necessary to determine that 

[either defendant] ‘has a regular and established place of 

business’ here.”). 
6 IN RE: CRAY INC. 

We have addressed that phrase only once in the context of a previous mandamus petition—in Cordis. See 769 

F.2d at 736–37. Cordis found that “a rational and substantial argument may be made in support of the court’s 

order denying Cordis’ motion to dismiss for lack of proper 

venue.” Id. at 737. It thus held in those circumstances 

that “we decline to issue the writ.” Id. The court did 

state that the “appropriate inquiry” is not “whether 

[Cordis] has a fixed physical presence in the sense of a 

formal office or store.” Id. But, notably, the court did 

not, in its opinion, evaluate venue in light of the statutory 

language of § 1400(b). The court simply determined that, 

under the facts presented, a writ was not justified. 

We recognize that the world has changed since 1985 

when the Cordis decision issued. In this new era, not all 

corporations operate under a brick-and-mortar model. 

Business can be conducted virtually. Employees increasingly telecommute. Products may not as a rule be warehoused by retailers, and the just-in-time delivery 

paradigm has eliminated the need for storing some inventory. But, notwithstanding these changes, in the wake of 

the Supreme Court’s holding in TC Heartland, effectively 

reviving Section 1400(b) as the focus of venue in patent 

cases, we must focus on the full and unchanged language 

of the statute, as Cordis did not consider itself obliged to

do. 

Moreover, district courts, including the trial court in 

this case, have noted the uncertainty surrounding and the 

need for greater uniformity on this issue, see, e.g., Transfer Order, 2017 WL 2813896, at *10 (explaining there is 

“uncertainty among the litigants regarding the scope of 

the phrase ‘regular and established place of business’” 

and “the appropriate scope of such venue discovery”);

Regenlab, 2017 WL 3601304, at *2 (S.D.N.Y. Aug. 17, 

2017) (“Substantial confusion exists regarding the circumstances in which an entity will be found to have a 

‘regular and established place of business’ in the dis-
IN RE: CRAY INC. 7

trict.”); Johnston v. IVAC Corp., 681 F. Supp. 959, 962–63 

(D. Mass. 1987) (collecting cases with a more “restrictive 

reading” of the statute and those with a more “‘liberal’ 

construction” (citation omitted)); Brunswick Corp. v. 

Suzuki Motor Co., 575 F. Supp. 1412, 1424 n.5 (E.D. Wis. 

1983) (noting that § 1400(b) “demonstrates . . . a need for 

nationwide uniformity” offered by the Federal Circuit), 

and this court “has a mandate to achieve uniformity in 

patent matters,” Panduit Corp. v. All States Plastic Mfg. 

Co., 744 F.2d 1564, 1574 (Fed. Cir. 1984). We conclude 

that mandamus here will further “supervisory or instructional goals” on an “unsettled and important” issue, an 

appropriate basis upon which to grant the mandamus

petition. In re Queen’s Univ. at Kingston, 820 F.3d 1287, 

1291 (Fed. Cir. 2016) (quoting In re Nintendo Co., Ltd., 

544 F. App’x 934, 936 (Fed. Cir. 2013)); see also BP Lubricants, 637 F.3d at 1313. Although the law was unclear 

and the error understandable, the district court abused its 

discretion by applying an incorrect legal standard, which 

we now clarify in this opinion. 

II. The Meaning of the Venue Statute

Section 1400(b) provides that “[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.” On the issue of improper 

venue, the only question before the court is whether Cray 

has a “regular and established place of business” in the 

Eastern District of Texas within the meaning of § 1400(b). 

Because Cray is incorporated in the State of Washington, 

there is no dispute that the residency requirement of that 

statute cannot be met here under the definition provided 

in TC Heartland. See 137 S. Ct. at 1521. Nor does Cray 

challenge the district court’s finding as to the acts of

infringement within the district for purposes of venue. 
8 IN RE: CRAY INC. 

In matters unique to patent law, this court applies its 

own law. Midwest Indus., Inc. v. Karavan Trailers, Inc., 

175 F.3d 1356, 1359 (Fed. Cir. 1999) (en banc in relevant 

part), cert. denied 528 U.S. 1019 (1999). Section 1400(b) 

is unique to patent law, and “constitute[s] ‘the exclusive 

provision controlling venue in patent infringement proceedings’ . . . .” TC Heartland, 137 S. Ct. at 1518 (quoting 

Stonite Prods. Co. v. Melvin Lloyd Co., 315 U.S. 561, 563 

(1942)). Thus, Federal Circuit law, rather than regional 

circuit law, governs our analysis of what § 1400(b) requires. 

As discussed in greater detail below, our analysis of 

the case law and statute reveal three general requirements relevant to the inquiry: (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. If any statutory requirement is not 

satisfied, venue is improper under § 1400(b).

In the late 1800s, when § 1400(b)’s predecessor was 

being considered, courts had divided over whether a 

defendant could be sued for patent infringement outside 

the place of the defendant’s incorporation. Some courts 

held that it was necessary to sue a defendant in its place 

of incorporation, and “the corporations thus have an 

opportunity to infringe upon patents and almost escape 

any responsibility for it by reason of the difficulty of 

finding them in order to sue them, for it is very inconvenient to travel across the continent to sue them when they 

are infringing in a business established near the plaintiff 

or owner of a patent.” 29 Cong. Rec. 2719 (1897) (statement of Sen. Platt). Other courts instead held that an 

infringement “suit[] may be brought wherever service can 

be had.” 29 Cong. Rec. 1900 (1897) (statement of Rep. 

Mitchell).

To resolve the uncertainty, Congress enacted 

§ 1400(b)’s predecessor in 1897 to provide “jurisdiction” 
IN RE: CRAY INC. 9

for patent infringement suits “in the district of which the 

defendant is an inhabitant, or in any district in which the 

defendant . . . shall have committed acts of infringement 

and have a regular and established place of business.” 29 

Stat. 695, Ch. 395. The statute’s “main purpose” was to 

“give original jurisdiction to the court where a permanent 

agency transacting the business is located.” 29 Cong. Rec. 

1900 (1897) (statement of Rep. Lacey). Jurisdiction would 

not be conferred by “[i]solated cases of infringement” but 

“only where a permanent agency is established.” Id.

The statute of course allows broader venue than 

merely the place of a defendant’s incorporation, providing 

“patent claimants an advantage” compared to claimants 

in other federal-question cases at the time, Brunette 

Mach. Works, Ltd. v. Kockum Indus., Inc., 406 U.S. 706, 

713 n.13 (1972); but the statute also clearly narrows 

jurisdiction relative to the courts that previously allowed 

patent suits wherever the defendant could be served, see 

id. at 712–13. “Congress adopted the predecessor to 

§ 1400(b) as a special venue statute in patent infringement actions to eliminate the ‘abuses engendered’ by 

previous venue provisions allowing such suits to be 

brought in any district in which the defendant could be 

served.” Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 

260, 262 (1961). The legislation was “intended to define 

the exact limits of venue in patent infringement suits.” 

Stonite, 315 U.S. at 566. The Supreme Court therefore 

has explained that it “was a restrictive measure, limiting 

a prior, broader venue.” Id. The Supreme Court has also 

instructed that “[t]he requirement of venue is specific and 

unambiguous; it is not one of those vague principles 

which, in the interests of some overriding policy, is to be 

given a liberal construction.” Schnell, 365 U.S. at 264 

(quoting Olberding v. Ill. Cent. R. Co., 346 U.S. 338, 340 

(1953)) (internal quotation marks omitted). 

Courts should be mindful of this history in applying 

the statute and be careful not to conflate showings that 
10 IN RE: CRAY INC. 

may be sufficient for other purposes, e.g., personal jurisdiction or the general venue statute, with the necessary 

showing to establish proper venue in patent cases. As the 

district court correctly stated, “the regular and established place of business standard requires more than the 

minimum contacts necessary for establishing personal 

jurisdiction or for satisfying the doing business standard 

of the general venue provision, 28 U.S.C. § 1391(c).” 

Transfer Order, 2017 WL 2813896, at *13 n.11 (internal 

quotation marks omitted); see also Brunette, 406 U.S. at 

713 n.13 (contrasting the patent venue statute and the 

general venue statute and explaining “[s]ince 1948, the 

general venue law has authorized suit against a corporate 

defendant not only where he maintains a ‘regular and 

established place of business,’ as in s 1400(b), but also 

where he is ‘doing business.’”). 

The statutory language we need to interpret is “where 

the defendant . . . has a regular and established place of 

business.” 28 U.S.C. § 1400(b). The noun in this phrase 

is “place,” and “regular” and “established” are adjectives 

modifying the noun “place.” The following words, “of 

business,” indicate the nature and purpose of the “place,” 

and the preceding words, “the defendant,” indicate that it 

must be that of the defendant. Thus, § 1400(b) requires 

that “a defendant has” a “place of business” that is “regular” and “established.” All of these requirements must be 

present. The district court’s four-factor test is not sufficiently tethered to this statutory language and thus it 

fails to inform each of the necessary requirements of the 

statute. 

In deciding whether a defendant has a regular and established place of business in a district, no precise rule 

has been laid down and each case depends on its own 

facts. The “requirements” listed above and discussed 

below inform whether there exist the necessary elements, 

but do not supplant the statutory language. We stress 
IN RE: CRAY INC. 11

that the analysis must be closely tied to the language of 

the statute.

As noted above, when determining venue, the first 

requirement is that there “must be a physical place in the 

district.” The district court erred as a matter of law in 

holding that “a fixed physical location in the district is not 

a prerequisite to proper venue.” Transfer Order, WL 

2813896, at *11. This interpretation impermissibly 

expands the statute. The statute requires a “place,” i.e., 

“[a] building or a part of a building set apart for any 

purpose” or “quarters of any kind” from which business is 

conducted. William Dwight Whitney, The Century Dictionary, 732 (Benjamin E. Smith, ed. 1911); see also Place, 

Black’s Law Dictionary (1st ed. 1891) (defining place as a 

“locality, limited by boundaries”). The statute thus cannot be read to refer merely to a virtual space or to electronic communications from one person to another. But 

such “places” would seemingly be authorized under the

district court’s test. 

While the “place” need not be a “fixed physical presence in the sense of a formal office or store,” Cordis, 769 

F.2d at 737, there must still be a physical, geographical 

location in the district from which the business of the 

defendant is carried out. In Cordis, for example, a defendant used its employees’ homes to store its “literature, 

documents and products” and, in some instances, like 

distribution centers, storing inventory that the employees 

then directly took to its clients. 769 F.2d at 735. Defendant also engaged a secretarial service physically located in 

the district to perform certain tasks. Id. 

The second requirement for determining venue is that 

the place “must be a regular and established place of 

business.” The district court’s test fails to recognize that 

the place of business must be “regular.” A business may 

be “regular,” for example, if it operates in a “steady[,] 

uniform[,] orderly[, and] methodical” manner, Whitney,
12 IN RE: CRAY INC. 

supra, at 5050. In other words, sporadic activity cannot 

create venue. See Phillips v. Baker, 121 F.2d 752, 756 

(9th Cir. 1941) (“A ‘regular place of business’ is, obviously, 

a place where such business is carried on ‘regularly’ and 

not merely temporarily, or for some special work or particular transaction.” (quoting Winterbottom v. Casey, 283 

F. 518, 521 (E.D. Mich. 1922))). Indeed, “[t]he doing of a 

single act pertaining to a particular business will not be 

considered engaging in or carrying on the business; yet a 

series of such acts would be so considered.” Regular,

Black’s Law Dictionary (1st ed. 1891).

The “established” limitation bolsters this conclusion. 

The word contains the root “stable,” indicating that the 

place of business is not transient. It directs that the place 

in question must be “settle[d] certainly, or fix[ed] permanently.” Establish, Black’s Law Dictionary (1st ed. 1891). 

To make “permanent” clearly accords with the “main 

purpose” identified in the predecessor statute’s legislative 

history. See 29 Cong. Rec. 1900 (1987) (statement of Rep. 

Lacey). Indeed, court decisions have stressed the importance of sufficient permanence. See, e.g., Phillips, 121 

F.2 at 756 (explaining that where the defendant’s “establishment [in the district] was just a location for a particular transaction,” “the necessary element of permanency is 

lacking” (internal quotation marks omitted)). As an 

example, one court held that a business that semiannually displayed its products at a trade show in the district 

had only a temporary presence. See Knapp-Monarch Co. 

v. Casco Prods. Corp., 342 F.2d 622, 625 (7th Cir. 1965). 

On the other hand, a five-year continuous presence in the 

district demonstrates that the business was established 

for purposes of venue. See Remington Rand Bus. Serv. v. 

Acme Card Sys. Co., 71 F.2d 628, 629 (4th Cir. 1934). 

Accordingly, while a business can certainly move its 

location, it must for a meaningful time period be stable, 

established. On the other hand, if an employee can move 

his or her home out of the district at his or her own insti-
IN RE: CRAY INC. 13

gation, without the approval of the defendant, that would 

cut against the employee’s home being considered a place 

of business of the defendant.

Finally, the third requirement when determining 

venue is that “the regular and established place of business” must be “the place of the defendant.” As the statute 

indicates, it must be a place of the defendant, not solely a 

place of the defendant’s employee. Employees change 

jobs. Thus, the defendant must establish or ratify the 

place of business. It is not enough that the employee does 

so on his or her own. 

Relevant considerations include whether the defendant owns or leases the place, or exercises other attributes 

of possession or control over the place. One can also

recognize that a small business might operate from a 

home; if that is a place of business of the defendant, that 

can be a place of business satisfying the requirement of 

the statute. 

Another consideration might be whether the defendant conditioned employment on an employee’s continued 

residence in the district or the storing of materials at a 

place in the district so that they can be distributed or sold 

from that place. See, e.g., Cordis, 769 F.2d at 375; Am. 

Cyanamid Co. v. Nopco Chem. Co., 388 F.2d 818, 820 (4th 

Cir. 1968); Grantham v. Challenge-Cook Bros., Inc., 420 

F.2d 1182, 1185–86 (7th Cir. 1969); Univ. of Ill. Found. v. 

Channel Master Corp., 382 F.2d 514, 516 (7th Cir. 1967); 

Shelton v. Schwartz, 131 F.2d 805, 808 (7th Cir. 1942). 

Marketing or advertisements also may be relevant, but 

only to the extent they indicate that the defendant itself 

holds out a place for its business.

The district court is correct that a defendant’s representations that it has a place of business in the district 

are relevant to the inquiry. Potentially relevant inquiries 

include whether the defendant lists the alleged place of 

business on a website, or in a telephone or other directory; 
14 IN RE: CRAY INC. 

or places its name on a sign associated with or on the 

building itself. See, e.g., Cordis, 769 F.2d at 375; Grantham, 420 F.2d at 1185–86. But the mere fact that a 

defendant has advertised that it has a place of business or 

has even set up an office is not sufficient; the defendant 

must actually engage in business from that location. In 

the final analysis, the court must identify a physical 

place, of business, of the defendant.

A further consideration for this requirement might be 

the nature and activity of the alleged place of business of 

the defendant in the district in comparison with that of 

other places of business of the defendant in other venues.* 

Such a comparison might reveal that the alleged place of 

business is not really a place of business at all.

III. Application of the Venue Statute to This Case

With the above discussion in mind, we turn to the 

facts of this case. The parties’ primary dispute concerns 

whether Mr. Harless’s home, located in the Eastern 

District of Texas, constitutes “a regular and established 

place of business” of Cray.

Cray points out that Mr. Harless’s home was not 

listed in any business directories or websites, that he did 

not maintain product literature or products at his home, 

and that he was the only employee within the district. It 

argues that the online business materials and generalized 

* By this, we do not suggest that district courts 

must scrutinize the “nature and activity” of the alleged 

place of business to make relative value judgments on the 

different types of business activity conducted therein. 

Rather, a relative comparison of the nature and activity 

may reveal, for example, that a defendant has a business 

model whereby many employees’ homes are used by the 

business as a place of business of the defendant.

 
IN RE: CRAY INC. 15

administrative support are not evidence of a place of 

business of Cray in the Eastern District of Texas. Cray 

argues that its “Americas Sales Territories” map, identifying Mr. Harless’s Eastern District of Texas location, does 

not indicate that Cray was doing business from that 

location because it merely was an internal presentation 

listing his address. Cray argues that it paid for no part of 

Mr. Harless’s home or rent, and that it stored nothing 

there. Cray contends that Mr. Testa is irrelevant here 

because his employment ended well before Raytheon filed 

its complaint. 

Raytheon responds that Cray made a “conscious decision” to hire Mr. Harless and Mr. Testa, knowing that 

they lived in the Eastern District of Texas. It notes that 

Cray paid at least Mr. Harless a salary and offered administrative support and reimbursed him for phone,

internet, and business-related travel expenses. Raytheon 

also notes that Mr. Harless’s social media profiles identified his location in the Eastern District of Texas as a Cray 

employee and that he corresponded with customers listing 

a phone number with an Eastern District of Texas area 

code. Raytheon argues that Cray did not need to store 

business materials with Mr. Harless or Mr. Testa because 

many were available online and that Cray’s large products physically could not be stored there. Raytheon

contends that Mr. Harless’s activities extended beyond 

merely making sales and also contends that Cray did 

have customers in the Eastern District of Texas, even 

though Mr. Harless was not responsible for them.

The third requirement identified above, that the regular and established place of business must be “the place of 

the defendant,” is crucial here. The facts presented 

cannot support a finding that Mr. Harless’s home was a 

regular and established place of business of Cray. The 

same is true as to Mr. Testa, to the extent he is relevant 

to this analysis. The fact that Cray allowed its employees 

to work from the Eastern District of Texas is insufficient. 
16 IN RE: CRAY INC. 

There is no indication that Cray owns, leases, or rents any 

portion of Mr. Harless’s home in the Eastern District of 

Texas. No evidence indicates that Cray played a part in 

selecting the place’s location, stored inventory or conducted demonstrations there, or conditioned Mr. Harless or 

Mr. Testa’s employment or support on the maintenance of 

an Eastern District of Texas location. No evidence shows 

that Cray believed a location within the Eastern District 

of Texas to be important to the business performed, or 

that it had any intention to maintain some place of business in that district in the event Mr. Harless or Mr. Testa

decided to terminate their residences as a place where 

they conducted business. 

Raytheon argues that a residential home office is “no 

less permanent than any conventional store or office,” 

noting that often (as is the case here) the employee may 

have resided there before the employment began. Respondent’s Br. 22–23 n.6. Raytheon has the wrong perspective. For purposes of § 1400(b), it is of no moment 

that an employee may permanently reside at a place or 

intend to conduct his or her business from that place for 

present and future employers. “The statute clearly requires that venue be laid where ‘the defendant has a 

regular and established place of business,’ not where the 

defendant’s employee owns a home in which he carries on 

some of the work that he does for the defendant.” Am. 

Cyanamid, 388 F.2d at 820 (citations omitted). 

Raytheon also argues that Cray customers were present in the district, but makes no suggestions that Mr. 

Harless or Mr. Testa served them. Raytheon points to no 

evidence that the employees’ location in the Eastern 

District of Texas was material to Cray. Instead, it appears that Mr. Harless and Mr. Testa were “free to live 

where [they] chose as far as [the defendant] was concerned.” Grantham, 420 F.2d at 1185. 
IN RE: CRAY INC. 17

These facts are in contrast with those in Cordis, 

where it was clear that the place of business was established by Cordis. Cordis’s business specifically depended 

on employees being physically present at places in the 

district, and it was undisputable that Cordis affirmatively 

acted to make permanent operations within that district 

to service its customers there. Cordis publicly advertised 

a secretarial service office located within the district as a 

place of business of its own and used its employees’ homes 

like distribution centers. 

Unlike in Cordis, where the appellant received secretarial services from a third-party located within the 

district, all expense reimbursements and administrative 

support for Cray’s employees were provided from outside 

of the district. Further, the reimbursements and support 

were not conditioned on any particular employee location. 

Raytheon also argues that Cray’s “Americas Sales Territories” map identifying Mr. Harless as a “Named Account 

Manager” and his location at his Eastern District of Texas 

personal home as further evidence that Cray had a “regular and established” place of business in the district. That

map, however, was not advertised publicly and has little 

probative value.

Raytheon’s remaining arguments are similarly unavailing. Mr. Harless’s social media profiles and phone 

number indicate at most that he conducted business from 

the Eastern District of Texas, not that Cray established a 

place of business there. The availability of Cray’s materials online is not compelling, as the materials were available in places where no one would argue that Cray 

established a regular place of business. And even if Mr. 

Harless performed work for Cray beyond sales, nothing 

suggests that Mr. Harless’s work on “new sales and new 

account development” or “management of key accounts” 

changes the analysis above. 
18 IN RE: CRAY INC. 

Our decision here comports with a number of appellate court decisions concerning employees working from 

their homes. In Channel Master Corp., for instance, the 

Seventh Circuit addressed whether a defendant that 

employed a single salesman who used his home as a base 

for his sales activities in promoting his employer’s products demonstrated that the defendant had a regular and 

established place of business there. 382 F.2d at 515. Like 

Raytheon, the plaintiff in that case argued that the employee “maintains control of a permanent establishment 

in the district for his employer, and systematically conducts a substantial portion of the employer’s business in 

the district from this location.” Id. 

The Seventh Circuit rejected that argument. Like Mr. 

Harless, the salesman in Channel Master was reimbursed 

by the defendant for certain business expenses. But, also 

like Mr. Harless, he maintained in his home “no stock in 

trade, no displays, no samples, and no showroom.” Id. at 

516. He also “conducted no demonstrations of the products,” received no business visitors, and had no staff or 

even secretarial help located in his home office. Id. 

Under these circumstances, the court concluded that the 

employee’s home could not “by any stretch of the imagination” be characterized as a regular and established place 

of business of the defendant. Id.; accord Grantham, 420 

F.2d at 1185–86.

Likewise, in American Cyanamid, the Fourth Circuit 

refused to accept the argument that “it is sufficient under 

§ 1400(b) that there exists within the district a physical 

location where an employee of the defendant carries on a 

part of his work.” 388 F.2d at 820. There, the defendant 

maintained no real or personal property, no storage, 

distribution or manufacturing facilities, and no bank 

account, address, or telephone listing in the district. And 

while one of its salaried regional sales managers maintained a portion of his home as an office, even having a 

part-time secretary assist him, the Fourth Circuit found 
IN RE: CRAY INC. 19

that insufficient, noting the fact that there was nothing 

outside of the home that indicated business was being 

conducted and that the defendant owned no interest in 

the house and failed to contribute to its maintenance. 

The fact that “the defendant’s employee owns a home in 

which he carries on some of the work that he does for the 

defendant” was insufficient to establish venue. Id. 

Similarly, the facts here do not show that Cray maintains a regular and established place of business in the 

Eastern District of Texas; they merely show that there 

exists within the district a physical location where an 

employee of the defendant carries on certain work for his 

employer. 

We stress that no one fact is controlling. But taken 

together, the facts cannot support a finding that Cray 

established a place of business in the Eastern District of 

Texas. Thus venue cannot exist there under § 1400(b).

Because venue is lacking in the Eastern District of 

Texas, Cray seeks transfer to the Western District of 

Wisconsin. Raytheon responds that it prefers transfer to 

the United States District Court for the Western District 

of Texas. Section 1406(a) provides that “[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.” 

Because the district court determined that venue was 

proper, it did not address the parties’ arguments regarding where the case should be transferred. We leave that 

determination for the district court on remand. 

Accordingly,

 IT IS ORDERED THAT: 

The petition is granted to the extent that the district 

court’s order denying Cray’s Rule 12(b)(3) motion is 
20 IN RE: CRAY INC. 

vacated, and the district court is directed to grant the 

motion and transfer the case pursuant to § 1406(a) to an 

appropriate venue to be determined by the district court 

on remand. 

 FOR THE COURT

 /s/ Peter R. Marksteiner

Peter R. Marksteiner

Clerk of Court