Fed. Circuit: Incorporating in Delaware Doesn't Force a Company to Defend a Federal Suit There

Granting a writ of mandamus, a federal appellate court has rejected the notion that incorporating in Delaware is a controlling factor in determining whether a company must defend a lawsuit there. And, finding that a district court judge abused her discretion by holding otherwise, the appellate panel directed that a patent infringement case be transferred to California.

Friday’s ruling by the U.S. Court of Appeals for the Federal Circuit could potentially prevent a number of Delaware companies that do business elsewhere from continuing to use the state’s highly regarded court system for intellectual property disputes, a practice that had been on the rise, according to Reuters.

Reversing U.S. District Judge Sue Robinson, the appellate panel held that she should have granted the transfer of venue to the Northern District of California sought by defendant Link_A_Media Devices Corp, or LAMD, under 28 U.S.C. § 1404(a) and directed that the patent infringement case be sent there. Both LAMD and the plaintiff in the patent case, Marvell International Ltd of Bermuda, have at least some operations in the vicinity and LAMD is based in California.

Although LAMD is incorporated in Delaware, that fact “should not be dispositive of the public interest analysis,” the appellate court said in a per curiam opinion (PDF). “Aside from LAMD’s incorporation in Delaware, that forum has no ties to the dispute or to either party,”

Chief Circuit Judge Randall Rader was on the three-judge panel that heard the case, along with Judge Timothy Dyk and Judge Kathleen O’Malley.

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