Andra Group, Lp v. Victoria's Secret Stores, L.l.c., Victoria's Secret Stores Brand Management, Inc.,…

United States Court of Appeals
for the Federal Circuit
______________________
ANDRA GROUP, LP,
Plaintiff-Appellant
v.
VICTORIA'S SECRET STORES, L.L.C., VICTORIA'S
SECRET STORES BRAND MANAGEMENT, INC.,
VICTORIA'S SECRET DIRECT BRAND
MANAGEMENT, LLC, L BRANDS, INC.,
Defendants-Appellees
______________________
2020-2009
______________________
Appeal from the United States District Court for the
Eastern District of Texas in No. 4:19-cv-00288-ALM-KPJ,
Judge Amos L. Mazzant, III.
______________________
Decided: August 3, 2021
______________________
MAEGHAN WHITEHEAD, Griffith Barbee PLLC, Dallas,
TX, argued for plaintiff-appellant. Also represented by
CASEY GRIFFITH.
RICHARD WILLIAM MILLER, Ballard Spahr LLP, At-
lanta, GA, argued for defendants-appellees. Also repre-
sented by LYNN E. RZONCA, Philadelphia, PA.
______________________
Case: 20-2009 Document: 41 Page: 1 Filed: 08/03/2021

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ANDRA GROUP , LP v. VICTORIA' S SECRET STORES, LLC 2
Before REYNA, MAYER , and HUGHES , Circuit Judges.
HUGHES , Circuit Judge.
Andra Group, LP appeals the district court’s grant in
part of the Defendants’ motion to dismiss for improper
venue. Because we find that venue is improper in the East-
ern District of Texas as to the three dismissed defendants
under 28 U.S.C. § 1400(b), we affirm.
I
Defendants are related companies. Andra Grp., LP v.
Victoria’s Secret Stores, LLC, No. 4:19-cv-288, 2020 WL
1465894 at *1 (E.D. Tex. Mar. 26, 2020) (Decision).
L Brands, Inc. (LBI) is the corporate parent of several re-
tailers in the apparel and home product field. Id. This case
involves the parent LBI and several Victoria’s Secret enti-
ties: (1) Victoria’s Secret Stores, LLC (Stores) operates the
physical Victoria’s Secret stores; (2) Victoria’s Secret Direct
Brand Management, LLC (Direct) manages the victori-
assecret.com website and the Victoria’s Secret mobile ap-
plication; and (3) Victoria’s Secret Stores Brand
Management, Inc. (Brand) creates Victoria’s Secret
branded intimate apparel and beauty products. Id. “LBI’s
subsidiaries each maintain their own corporate, partner-
ship, or limited liability company status, identity, and
structure.” Id. Each Defendant is incorporated in Dela-
ware. Andra Grp., LP v. Victoria’s Secret Stores, LLC,
No. 4:19-cv-288, 2020 WL 2478546, at *2 (E.D. Tex.
Feb. 24, 2020) (Report and Recommendation), report and
recommendation adopted, Decision, 2020 WL 1465894.
LBI, Direct, and Brand (collectively, the Non-Store Defend-
ants) do not have any employees, stores, or any other phys-
ical presence in the Eastern District of Texas (the District).
Id. at *3. Stores operates at least one retail location in the
District. Id. at *5.
In April 2019, Andra sued Defendants for infringement
of U.S. Patent No. 8,078,498 (the ’498 patent), which claims
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ANDRA GROUP, LP v. VICTORIA' S SECRET STORES, LLC 3
inventions directed to displaying articles on a webpage, in-
cluding applying distinctive characteristics to thumbnails
and displaying those thumbnails in a “master display
field.” ’498 patent 11:27–42. [J.A. 56] Andra’s infringe-
ment claims are directed to the victoriassecret.com web-
site, related sites, and smartphone applications that
contain similar functionality as the website. Appellant’s
Br. 3–4.
Defendants moved to dismiss the infringement suit for
improper venue under 28 U.S.C. § 1406(a), or in the alter-
native, to transfer the lawsuit to the Southern District of
Ohio. Andra filed an amended complaint, and the Defend-
ants renewed their motion. Report and Recommendation,
2020 WL 2478546, at *1. Defendants argued that venue
was improper because Stores did not commit acts of in-
fringement in the District and the Non-Store Defendants
did not have regular and established places of business in
the District.
The magistrate judge recommended that the Non-Store
Defendants be dismissed for improper venue but that the
suit continue against Stores, because testimony by one
Stores employee supported a finding of the alleged infring-
ing acts in the District. Id. at *4–5. The magistrate judge
did not consider transfer, because the parties had only
briefed the issue of transfer where venue was improper
against all the Defendants. Id. at *5. The magistrate judge
discussed a potential division in the case, where venue was
proper against some Defendants and improper against oth-
ers, in a telephone conference on February 19, 2020, and
Andra stated that it would proceed in the District against
the Defendants who were not dismissed even if some of the
Defendants were dismissed. Id.
After reviewing objections by both parties to the mag-
istrate’s report and recommendation, the district court
adopted the findings and conclusions of the magistrate
judge as the findings and conclusions of the court. Decision,
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ANDRA GROUP , LP v. VICTORIA' S SECRET STORES, LLC 4
2020 WL 1465894 at *1. The district court dismissed the
Non-Store Defendants without prejudice for improper
venue on March 26, 2020. In a departure from its earlier
statement that it would proceed against any Defendants
who were not dismissed, Andra voluntarily dismissed the
last remaining Defendant, Stores, and the district court
subsequently dismissed all remaining claims without prej-
udice on May 15, 2020. Andra timely filed notice of appeal
of the dismissal of the Non-Store Defendants for improper
venue.
II
“We review de novo the question of proper venue under
28 U.S.C. § 1400(b).” Westech Aerosol Corp. v. 3M Co.,
927 F.3d 1378, 1381–82 (Fed. Cir. 2019). “[T]he plaintiff
has the burden of establishing proper venue under
28 U.S.C. § 1400(b).” Id.
28 U.S.C. § 1400(b) provides that “[a]ny civil action
for patent infringement may be brought in the ju-
dicial district where the defendant resides, or
where the defendant has committed acts of in-
fringement and has a regular and established place
of business.” A “domestic corporation ‘resides’ only
in its State of incorporation for purposes of the pa-
tent venue statute.” TC Heartland LLC v. Kraft
Foods Grp. Brands LLC, 137 S. Ct. 1514, 1517
(2017).
Because each Defendant is incorporated in Delaware,
no defendant “resides” in Texas for the purpose of patent
venue. Thus, to establish venue in this case, Andra must
show that each Defendant committed acts of infringement
and maintains a regular and established place of business
in the Eastern District of Texas.
To show that a defendant has a regular and established
place of business, there are three requirements: “(1) there
must be a physical place in the district; (2) it must be a
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ANDRA GROUP, LP v. VICTORIA' S SECRET STORES, LLC 5
regular and established place of business; and (3) it must
be the place of the defendant.” In re Cray Inc., 871 F.3d
1355, 1360 (Fed. Cir. 2017).
As we stated in Cray, “[t]he Supreme Court has . . . in-
structed that ‘[t]he requirement of venue is specific and un-
ambiguous; it is not one of those vague principles which, in
the interests of some overriding policy, is to be given a lib-
eral construction.’” Id. at 1361 (second alteration in origi-
nal) (quoting Schnell v. Peter Eckrich & Sons, Inc., 365 U.S.
260, 264 (1961)); see also In re Google LLC, 949 F.3d 1338,
1346 (Fed. Cir. 2020) (“[T]he Supreme Court has cautioned
against a broad reading of the venue statute.”).
The parties do not dispute that Stores operates retail
locations in the District, and whether venue is proper as to
Stores is not at issue in this appeal. The question is
whether these Stores locations can be considered “a regular
and established place of business” of the Non-Store Defend-
ants. In re Cray, 871 F.3d at 1360. Andra argues that
Stores locations are “a regular and established place of
business” of the Non-Store Defendants because Stores em-
ployees are agents of the Non-Store Defendants, or, alter-
natively, because the Non-Store Defendants have ratified
Stores locations as their places of business. We address
each argument in turn.
A
“[A] ‘regular and established place of business’ re-
quires the regular, physical presence of an employee or
other agent of the defendant conducting the defendant’s
business at the alleged ‘place of business.’” In re Google,
949 F.3d at 1345. Because there is no dispute that the Non-
Store Defendants lack employees in the District, Andra ar-
gues that Stores employees are agents of LBI, Direct, and
Brand. Appellant’s Br. 13–14.
“Agency is the fiduciary relationship that arises
when one person (a ‘principal’) manifests assent to
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ANDRA GROUP , LP v. VICTORIA' S SECRET STORES, LLC 6
another person (an ‘agent’) that the agent shall act
on the principal’s behalf and subject to the princi-
pal's control, and the agent manifests assent or oth-
erwise consents so to act.” Restatement (Third) of
Agency § 1.01 (Am. L. Inst. 2006). “The essential
elements of agency are (1) the principal’s ‘right to
direct or control’ the agent’s actions, (2) ‘the mani-
festation of consent by [the principal] to [the agent]
that the [agent] shall act on his behalf,’ and (3) the
‘consent by the [agent] to act.’” In re Google, 949
F.3d at 1345 (alterations in original) (quoting
Meyer v. Holley, 53 U.S. 280, 286 (2003).
Andra argues that LBI “controls store location workers
by dictating store operations, hiring, and conduct.” Appel-
lant’s Br. 16. Andra points to various public filings by LBI
that speak in broad terms about real estate holdings and
investments, contends that LBI controls the hiring and fir-
ing of employees, and argues that because LBI requires
Stores associates to sign and follow LBI’s Code of Conduct,
this indicates control over the employees. Andra argues
that Direct “controls store location workers by dictating
their handling of returns of merchandise purchased on the
[Victoria’s Secret] website.” Id. at 18. Finally, Andra ar-
gues that Stores employees are agents of Brand because
Brand “‘closely controls the distribution and sales of its
products’ exclusively available through store locations and
the [w]ebsite.” Id. at 19 (quoting J.A. 799–801 ¶¶ 11, 13,
15–16). Andra also contends that Brand’s control over the
Victoria’s Secret website “strengthens the agency relation-
ship with [] Brand.” Id. at 19–20.
We considered a similar agency question in In re
Google. There, a plaintiff sued Google for patent infringe-
ment in the Eastern District of Texas, alleging that venue
was proper based on the presence of several Google Global
Cache servers in the District. In re Google, 949 F.3d at
1340. Google did not own the datacenters where the servers
were hosted but contracted with two internet service
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ANDRA GROUP, LP v. VICTORIA' S SECRET STORES, LLC 7
providers (ISPs) in the district to host the servers. Id. The
contracts included several limitations including: restrict-
ing “the ISPs’ ability to relocate the servers without
Google’s permission,” limiting unauthorized access to the
space used by Google’s servers, requiring the ISPs to pro-
vide “installation services,” forbidding the ISPs from ac-
cessing, using, or disposing of the servers without Google’s
permission, and requiring the ISPs to provide “remote as-
sistance services” involving basic maintenance activities
performed on the servers by the ISP’s on-site technician, if
requested by Google. Id. at 1340–41.
The relevant inquiry was “whether the ISPs [were] act-
ing as Google’s agent.” Id. at 1345. We held that although
the installation of the servers and provision of mainte-
nance may suggest an agency relationship, the installation
activity was a “one-time event for each server” that did not
constitute the conduct of a “regular and established” busi-
ness, and “SIT ha[d] not established that the ISPs perform-
ing the specified maintenance functions [were] conducting
Google’s business within the meaning of the statute.” Id.
at 1346.
Here, as in Google, none of Andra’s arguments are suf-
ficient to show that Stores employees are agents of the
Non-Store Defendants. None of the public filings cited by
Andra demonstrate LBI’s control, because they are docu-
ments covering all of LBI’s brands. The documents’ use of
“we” does not convey that “we” means LBI specifically, but
that “we” could include the individual subsidiary brands,
like Stores. See J.A. 452, 846. Andra’s contention that LBI
controls the hiring and firing of store employees is directly
contradicted by the testimony of the store manager for the
Plano, Texas store, Lisa Barcelona, who stated during her
deposition that she, a Stores employee, interviews associ-
ates and makes offers of employment. J.A. 642–43. She also
testified that she decides whether to fire employees and
that she does not need any approval before doing so, and
that it is she who holds Stores employees at her store
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ANDRA GROUP , LP v. VICTORIA' S SECRET STORES, LLC 8
accountable for following the Code of Conduct, not LBI.
Thus, none of the facts alleged by Andra are sufficient to
prove that Stores employees are agents of LBI, because LBI
does not have “the right to direct or control” Stores employ-
ees, an essential element of an agency relationship. In re
Google, 949 F.3d at 1345.
Additionally, while Stores locations accepting returns
of Direct merchandise purchased on the website is a service
that may benefit Direct, Andra has not shown that Direct
controls this process. This one discrete task is analogous to
the ISPs’ installation and maintenance of the servers in
Google, which we found insufficient to establish an agency
relationship. Id. at 1346. Finally, Brand’s close control of
its products and the website does not equate to “the right
to direct or control” employees at the physical Stores loca-
tions in the District. Id. at 1345.
For the above reasons, we agree with the district court
that Andra has not established that any of the Non-Store
Defendants exercise the degree of control over Stores em-
ployees required to find an agency relationship.
B
Andra’s second venue theory is that the Non-Store De-
fendants ratified Stores locations as their own places of
business such that Non-Store Defendants may be said to
maintain a regular and established place of business in the
District.
A threshold inquiry when determining whether the
place of business of one company can be imputed to an-
other, related company is whether they have maintained
corporate separateness. If corporate separateness has not
been maintained, the place of business of one corporation
may be imputed to the other for venue purposes. But where
related companies have maintained corporate separate-
ness, the place of business of one corporation is not imputed
to the other for venue purposes. See Cannon Mfg. Co. v.
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ANDRA GROUP, LP v. VICTORIA' S SECRET STORES, LLC 9
Cudahy Packing Co., 267 U.S. 333, 334–35 (1925); 14D
Charles Alan Wright & Arthur R. Miller, Federal Practice
and Procedure § 3823 & nn.25–26 (4th ed.).
Andra does not argue that the Defendants have not
maintained corporate separateness. Andra contends that
each of the Non-Store Defendants has ratified the retail
stores as its own based on the criteria outlined in In re
Cray, including “whether the defendant owns or leases the
place, or exercises other attributes of possession or control
over the place,” “the storing of materials at a place in the
district so that they can be distributed or sold from that
place,” and the “defendant’s representations that it has a
place of business in the district.” 871 F.3d at 1363.
Andra argues (1) that LBI has ratified store locations
through its control over store operations and by holding out
store locations as its own; (2) that Direct has ratified store
locations by allowing merchandise purchased online to be
returned in stores and by directing customers to store loca-
tions using the “Find a Store” feature; and (3) that Brand
has ratified store locations by distributing and selling its
merchandise from Store locations and because it is listed
as the registrant for the Victoria’s Secret website.
But “the mere fact that a defendant has advertised 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 re Cray, 871 F.3d at 1364 (emphasis
added). Andra has not shown that the Non-Store Defend-
ants actually engage in business at Stores locations. Andra
asserts that the Non-Store Defendants maintain a “unified
business model” with Stores, asserting many of the same
facts it set forth in support of its agency theory, but the fact
that the entities work together in some aspects, as dis-
cussed above, is insufficient to show ratification. See In re
ZTE(USA) Inc., 890 F.3d 1008, 1015 (Fed. Cir. 2018) (hold-
ing that a contractual relationship between two entities
“does not necessarily make [the first company’s] call center
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ANDRA GROUP , LP v. VICTORIA' S SECRET STORES, LLC 10
‘a regular and established place of business’ of [the second
company] in the [district]”).
Several additional factors weigh against a finding of
ratification here. The Non-Store defendants do not own or
lease Stores locations; Stores leases and performs all oper-
ations at the retail locations. Decision, 2020 WL 1465894
at *5. The Victoria’s Secret website’s “Find a Store” feature
points consumers to Stores locations, not Non-Store De-
fendants locations. J.A. 829. The Non-Store Defendants do
not display their corporate names in the retail locations.
Decision, 2020 WL 1465894 at *5. Non-Store Defendants
carry out different business functions than Stores. Id. And
the companies’ shared use of “Victoria’s Secret” in their
name does not detract from the separateness of their busi-
nesses. Giving “reasoned consideration to all relevant fac-
tors or attributes of the relationship” between Stores and
Non-Store Defendants, Andra has not met its burden to
show that Non-Store Defendants have ratified Stores loca-
tions as their own places of business such that Non-Store
Defendants may be said to maintain a regular and estab-
lished place of business in the District.
III
All three Cray factors must be met for venue to be
proper against a defendant. The second Cray factor, a “‘reg-
ular and established place of business’ requires the regu-
lar, physical presence of an employee or other agent of the
defendant conducting the defendant’s business at the al-
leged ‘place of business.’” In re Google, 949 F.3d at 1345.
Because Andra has not demonstrated that LBI, Brand, or
Direct has “the right to direct or control” the actions of
Store employees, id. at 1346, it has not shown the “regular,
physical presence of an employee or other agent” of LBI,
Brand, or Direct in the District. The Defendants have also
maintained corporate formalities and Andra has not shown
that Non-Store Defendants ratified Stores locations in the
District as their own places of business. We therefore
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ANDRA GROUP, LP v. VICTORIA' S SECRET STORES, LLC 11
affirm the district court’s decision that venue was not
proper in the District as to the Non-Store Defendants.
AFFIRMED
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