ISPs handling servers are not Google’s agents, venue therefore improper


In Re: Google LLC

Docket No. 2019-126
DYK, WALLACH, TARANTO
February 13, 2020

Brief Summary: ED TX not the proper venue since Google “had no employee or agent regularly conducting its business” in that district (ISPs handling servers are not Google’s agents).

Summary: Google petitioned for a writ of mandamus regarding the Eastern District of TX DC’s finding it is the proper venue since Google has “a regular and established place of business” there “based on the presence of several Google Cache (‘GCG’) servers, which function as local caches for Google data” (TC Heartland, US 2017; In re Cray, FC 2017 (venue proper where defendant has “a physical place in the district” that is “regular and established”, and is “the place of the defendant”); 28 USC 1406(a), FRCP 12(b)(3)). The FC panel opinion explains that “[t]he GCG servers are not hosted within datacenters owned by Google”, and that “Google contracts with internet service providers (ISPs) within the district to host” (Cable One and Suddenlink) the servers. The FC panel explained a writ of mandamus was proper here because “a significant number of [DC] court decision…adopt conflicting views on the basic legal questions presented in this case”, “it is unlikely…these issues will be preserved and presented to this court through the regular appellate process”, and the potential for “substantial expense to the parties that would result from an erroneous” DC decision. The questions here are “(1) whether a server rack, a shelf, or analogous space can be a ‘place of business’ and (2) whether a ‘regular and established place of business’ requires the regular presence of an employee or agent of the defendant conducting the business”, a “fundamental and recurring issue of patent law” not yet addressed by the court. Google argued “that a ‘place’ must have the characteristics of a real property or leasehold interest…where an employee or agent of the defendant is conducting the defendant’s business.” The FC panel disagreed with Google’s first argument, explaining that while it has “rejected the notion that a ‘virtual space’ or ‘electronic communications from one person to another’ could constitute a regular and established place of business” (In re Cray, FC 2017), Google’s “servers are physically located in the district in a fixed, geographic location” (citing Tinnus Ent., E.D. Tex. March 9, 2018; Peerless Network, SDNY, March 26, 2018). The FC panel agreed with Google’s employee point, which is “apparent from the service statute for patent cases”, and disagreed with SIT’s argument that the AIA changed this rule, but considered “whether the ISPs are acting as Google’s agent.” And the FC panel found that the ISPs are not Google’s agents, noting that Google’s control over certain maintenance issues was not enough (“The venue statute should be read to exclude agents’ activities, such as maintenance, that are merely connected to, but do not themselves constitute, the defendant’s conduct of business in the sense of production, storage, transport, and exchange of goods or services.”) Thus, the FC panel concluded that the ED of TX “was not a proper venue because Google lacked a ‘regular and established place of business’ within the district since it had no employee or agent regularly conducting its business at its alleged ‘place of business’ within the district.”

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