# United States Court of Appeals **for the Federal Circuit**

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IN RE: CRAY INC., Petitioner

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2017

- 129

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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.

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ON PETITION

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Before L OURIE , R EYNA , and S TOLL , Circuit Judges

. L OURIE , 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 tran sfer the case to the United States District Cou rt 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 dete rmining that Cray maintained “a regular and esta blished place of business” in the Eastern District of Texas within the meaning of 28 U.S.C. § 1400(b) . Accordingly,IN RE : CRAY INC

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the court’s decision refusing t ransfer 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.

B ACKGROUND

This petition arises from a patent infringement action filed by Raytheon against Cray in the Eastern District of Texas. Cray sells advanced supercomputers that Rayth eon accuses of infringement. Cray is a Washington corp oration with its principal place of business located there. It also maintains facilities in Bloomington, Minneso ta; Chi ppewa Falls, Wisconsin; Pleasanton and San Jose, Californi a; and Austin and Houston, Texas.

Alt hough 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 home s 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 appro ximately seven years with associated sales of Cray systems in excess of $345 million. Id

. at *1. Mr. Harless’ s respo nsibilities also included “new sales and new account deve lopment in [the] Central U.S.” a nd “management of key accounts within the Financial, Biomedical and Petroleum Industries.” Id. (alter ation in orig inal) ( 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 rei mbursement for his cell phon e usage for business purposes, i nternet fees, and mileage or “other costs” for business travel. Id. Cray provide d Mr. Harless with “administr ative support” from its Minnesota office

. Id. He providedIN RE : CRAY INC

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“price quotations” to customers

, listing him self 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, n or maintain ed a regular

an d established place of business within that district. The district court, however, rejected th at argu ment. 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 Tran sfer Order , 2017 WL 2813896, at *8

– 10. The court did not rely on Mr. Testa’s activities in determining that venue

was proper.IN RE : CRAY INC

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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 establishe d 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 particula r 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 r eversal of the district court’s denial of its motion to tran sfer venue and directing the district court to transfer this case to the Western District of Wisconsin pursuant to 28 U.S.C. § 1406(a).

D ISCUSSION

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) (quo ting 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 mand amus “is appropriately issued, however, when there is ‘usurpation of judicial power’ or a clear abuse of discr etion.” 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 pet itioner has “ no other adequate means to attain the relief he desires ” ; ( 2) the petitioner shows “ his right to man d amus is ‘clear and indisputable’ ” ; and ( 3) the issuing court is “ satisfied that the writ is appropriate under the ci rcumstances.” In re TC Heartland LLC , 821 F.3d 1338,IN RE : CRAY INC

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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 appropr iate, 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)). Add itionally, 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 “reg ular 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 numbe r 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 busi ness’ he re .”)

.IN RE : CRAY INC

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We have addressed that phrase only once in the co ntext of a previous mandamus petition

— in Cordis. See 769 F.2d at 736

– 37. Cordis found that “a rational and su bstantial argument may be made in support of the court’s order denying Cordis’ motion to d ismiss 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 forma l 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 worl d 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 increa singly telecommute. Products may not as a rule be war ehoused by retailers, and the just

- in

- time delivery paradigm has eliminated the need for storing some inve ntory. 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 ven ue 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, d istrict courts, including the trial court in this case, have noted the uncertainty surrounding and the need f or greater uniformity on this issue, s ee, 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 ci rcumstances in which an entity will be found to have a ‘regular and established place of business’ in the di s-IN RE : CRAY INC

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trict.”); Johnston v. I VAC 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. S uzuki 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 instru ctional 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 1 287, 1291 (Fed. Cir. 2016) (quoting In re Nintendo Co., Ltd.

, 544 F. App’x 934, 936 (Fed. Cir. 2013) ) ; see also BP Lubr icants , 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 di strict where the defendant reside s, 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,
t here is no dispute that the residency requirement of that statute cannot be met here under the definition provided in TC Heartland

. See 1 37 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

.IN RE : CRAY INC

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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 pr oceedings ’ . . . . ” 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) r equires.
As discussed in greater detail below, our analysis of the case law and statute reveal three general requir ements relevant to the inquiry: (1) there must be a phys ical 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 inconve nient 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 (1 897 ) (stat ement of Sen. Platt). O ther courts instead held that an infringement “suit [] may be brought wherever service can be had.” 29 Cong. Rec. 1900 (189 7) (statement of Rep

. Mitchell).
To resolve the uncertainty, Congress enacted § 1400(b)’s predecessor in 1897 to provide “jurisdiction”IN RE : CRAY INC

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for patent infringement suits “in the district of which the defendant is an inhabitant, or in any district in which th e defendant . . . shall have committed acts of infringement and have a regular a nd established place o f 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 (1 897) (statement of Rep. Lacey). Jurisdiction would not be conferred by “ [i] solated cases of infringement” but “only where a perma nent 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 all owed patent suits whereve r the defendant could be served, s ee id. at 712

– 13. “Congress adopted the predecessor to § 1400(b) as a special venue statute in patent infring ement actions to eliminate the ‘abuses engendered’ by previous venue provisions allowin g 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 t hose vague principles which, in the interests of some overriding po licy, 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 thatIN RE : CRAY INC

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may be sufficient for other purposes, e.g. , personal juri sdiction 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 esta blished place of business standard requires more than the minimum contacts necessary for establishing personal juri sdiction or for satisfying the doing b usiness standard of the general venue provision, 28 U.S.C. § 1391(c).” Transfer Order

, 2017 WL 2813896, at *13 n.11 (internal quotation mark s omitted) ; see also Brunette , 406 U.S. at 713 n.13 (contrasting the patent venue statute and the general venue statute an d 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 busin ess. ’ ”).
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 n oun “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 busines s” that is “reg ular” and “established.” All of these requirements must be present. T he district court’s four

- factor test is not sufficiently tethered to th is 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 e stablished place of business in a district, no pr ec ise 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

. W e stressIN RE : CRAY INC

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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 stat ute. 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 Di ctionary, 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 ca nnot be read to refer merely to a virtual space or to ele ctronic 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 pre sence 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 distri ct from which the business of the defendant is carried out. In Cordis , for example, a d efendant used its employees’ homes to store its “literature, documents and products” and, in some instances , like distribution centers, storing inventory that the emplo yees then directly took to its clients. 769 F.2d at 735. Defen dant 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 operate s in a “steady[,] uniform[,] orderly[, and] methodical” manner, Whitney,IN RE : CRAY INC

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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 temporari ly, or for some special work or pa rticular 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] perm anently.” Establish , Black’s Law Dictio nary (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 i mportance of sufficient permanence. See, e.g.

, Phillips , 121 F.2 at 756 (explaining that where the defendant’s “esta blishment [in the district] was just a location for a partic ular transaction,” “the necessary element of permanency is lacking” (internal quotation ma rks omitted)). As an example, one court held that a business that semiannua lly 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 o ther 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 cer tainly 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 inst i-IN RE : CRAY INC

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gation, without the approval of the defendant, that would cut agai nst 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 bus iness” 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 defen dant owns or leases the place

, or exercises other attributes of possession or control over the place

. O ne can also recognize that a small bus iness might operate from a home; if that is a place of business of the def endant, that can be a place of business satisfying the requirement of the statute.

Another consideration might be whether the defen dant 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 ho lds out a place for its business.
The district court is correct that a defendant’s repr esentations 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;IN RE : CRAY INC

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or places its name on a sign associated with or on the building itself. See, e.g., Cordis , 769 F.2d at 375; Gra ntham , 420 F.2d at 1185

– 86. But the mere fact that a defendant has advert ised 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 director ie s or websites, that he did not maintain product literature or products at his home, and that he was the only employee within the d istrict. It argues that the on line 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

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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 presentatio n 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 C ray made a “conscious dec ision” to hire Mr. Harless and Mr. Testa

, knowing that they lived i n the Eastern District of Texas. It notes that Cray paid at least Mr. Harless a salar y and offered a dministrative support and reimbursed him for phone, internet , and business

- related travel expenses . Raytheon also notes that Mr. Harless’s social media profiles ident ified 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 reg ular and established place of business must be “the place of the defendant,” is crucial here. T he facts presented cannot support a finding that Mr. Harless’s home wa s 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 allow ed its employees to work from the Eastern District of Texas is insufficient.IN RE : CRAY INC

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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 p art in selecting the place’s location

, stored inventory or conduc ted demonstrations there, or conditioned Mr. Harless or Mr. Testa’s employment or support on the maintenance of an Eas tern 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 bus iness in that district in the event Mr. H arless or Mr. Testa decided to terminate their residence s as a place where
t he y 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. R espondent’s Br. 22

– 23 n.6. Raytheon has the wrong pe rspective. 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 r equires 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 (citatio ns omitted).
Raytheon also argues that Cray customers were pr esent in the district, but makes no suggestions that Mr. Harle ss or Mr. Testa served them

. Raytheon points to no evidence that the employees’ location in the Eastern District of Texas was mate rial to Cray. Instead, it a ppears that Mr. Harless and Mr. Testa were “free to live where [they] chose as far as [the defendant] was co ncerned.” Grantham , 420 F.2d at 1185.IN RE : CRAY INC

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These facts are in contrast with those in Cordis

, where it was clear that the pl ace of business was esta blished 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 di strict
t o 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 secr etarial 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, t he reimbursements and support were not conditioned on any particular employee location. Raytheon also argues that Cray’s “Americas Sales Terr itories” map identifying Mr. Harless as a “Named Account Manager” and his location at his Eastern District of Texas personal home as further evidence t hat Cray had a “reg ular and established” place of business in the district. T hat

ma p , however, was not advertised publicly and has little probative value.
Raytheon’s remaining arguments are similarly un availing. Mr. Harless’s social media profiles and ph one 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 mater ials on line is not compelling , as the materials were avail able in places where no one w ould 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 a ccounts” changes the analysis above.IN RE : CRAY INC

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Our decision here comports with a number of appe llate 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 pro ducts demonstrated that the defendant had a regular and established place of business there. 382 F.2d at 515. Like Ra ytheon, the plaintiff in that case argued that the e mployee “maintains control of a permanent establishment in the district for his employer, and systematically co nducts 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 pro ducts,” 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 imagin ation” 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 mai ntained a portion of his home as an office, even having a part

- time secretary assist him, the Fourth Circuit foundIN RE : CRAY INC

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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 mai ntains a regular and es tablished 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 controllin g. But taken together, the facts cannot support a finding that Cray established a place of business in the Eastern District of Texas

. T hus venue cannot exist there under § 1400(b).
Because venue is lacking in the Eastern District of Texas, Cray seeks tra nsfer 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 layin g 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 regar ding where the case should be transferred. We leave that determination for the district court on remand.
Accordingly,

I T I S O RDERED T HAT : The petition is granted to the extent that t he district court’s order denying Cray’s Rule 12(b)(3) motion isIN RE : CRAY INC

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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

. F OR THE C OURT

/s/ Peter R. Marksteiner Peter R. Marksteiner Clerk of Court