EMED Technologies Corporation v. Repro-Med Systems, Inc. d/b/a RMS Medical Products, 2-17-cv-00728 (TXED June 4, 2018, Order) (Bryson, CJ)
Wednesday, June 6, 2018
"Necessary" Distributor’s Place of Business Does Not Establish Venue for Supplier
The court granted defendant's alternative motion to transfer for improper venue because defendant did not have a regular and established place of business in the district through its "necessary" distributor. "[T]here is abundant case law from other district courts holding that a distributor’s place of business cannot establish venue for its supplier. Citing no case law, [plaintiff] responds that this uniform line of cases is distinguishable because 'none of them involve the case where the use of a distributor is necessary to conduct the business of the defendant.' However, business necessity is insufficient to impute [a distributor's] place of business to [defendant]. . . . The purpose of the statutory limits on venue in the patent venue statute was to protect defendants from being sued in forums distant from their place of incorporation or residence. [Plaintiff's] proposed 'necessary distributor' rule would largely defeat that policy; indeed, given that smaller manufacturers are more likely to need to rely on distributors than larger ones, [plaintiff's] rule would have the perverse effect of subjecting smaller corporations more subject to suit in distant forums than larger ones."