Dec 2 (Reuters) - A U.S. Circuit Court has rejected the
long-standing argument that incorporating in Delaware can be
considered the controlling factor in deciding where a company
The U.S. Court of Appeals for the Federal Circuit
overturned on Friday a ruling by Delaware's District Court and
took the unusual step of ordering the lower court to send a
patent infringement lawsuit to a California federal court.
About half of all listed U.S. companies are incorporated in
Companies with no operations in the state are increasingly
bringing patent lawsuits in Delaware, citing incorporation to
justify the venue, in part because the court has a reputation
The ruling stemmed from an intellectual property dispute
between Marvell International Ltd of Bermuda and Link_A_Media
Devices Corp, or LAMD.
Marvell sued LAMD in Delaware, where the defendant was
incorporated. LAMD asked the Delaware District Court to
transfer the case to California Northern District where it is
based and where Marvell employs its inventors.
Delaware District Court Judge Sue Robinson erred in
refusing that request because she placed too much weight on the
plaintiffs' choice of venue, the Court of Appeals found.
"The court's heavy reliance on the fact that LAMD was
incorporated in Delaware was similarly inappropriate," said the
eight-page opinion. The case was heard by Randall Rader, the
chief judge, and judges Timothy Dyk and Kathleen O'Malley.
"The defendant's state of incorporation, however, should
not be dispositive of the public interest analysis. Aside from
LAMD's incorporation in Delaware, that forum has no ties to the
dispute or to either party," the ruling said.
Delaware's Bankruptcy Court is among the busiest in the
country for large Chapter 11 cases, and the state's federal
District Court is also a leading court for patent litigation.
Delaware is also home to Chancery Court, a state court
noted for its expertise in business disputes.
In June, Robinson refused to transfer a case involving eBay
Inc to a federal court in the Internet auctioneer's home state
In the eBay opinion, Robinson wrote: "As always, the court
stresses that, because all defendants are Delaware
corporations, they have no reason to complain about being sued
The case is In re Link_A_Media Devices Corp, U.S. Court of
Appeals for the Federal Circuit, No. 990.
For Link_A_Media Devices Corp.: Deanne Maynard of Morrison
For Marvell International Ltd.: Indranil Mukerji of Fish &
(Reporting by Tom Hals)
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