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Federal Circuit Affirms District Court’s Decision To Reach A Patent-Eligibility Issue After Concluding Venue Improper
09/15/2026On August 28, 2026, the U.S. Court of Appeals for the Federal Circuit (Judges Prost, Bryson, and Reyna) affirmed a district court’s dismissal of AML’s patent-infringement claims against Bath & Body Works Direct, Inc. and The Buckle, Inc. on two independent grounds: improper venue and patent ineligibility under 35 U.S.C. § 101. The Federal Circuit held that the district court did not abuse its discretion by reaching the patent-eligibility issue after concluding that venue was improper. AML IP, LLC v. Bath & Body Works Direct, Inc., No. 2025-1280 (Fed. Cir. Aug. 28, 2026). The decision addresses what a district court may do after determining that venue is improper, and confirms that a court presented with concurrent Rule 12(b)(3) and Rule 12(b)(6) grounds may resolve both.
Patentee-Appellant sued Defendants-Appellees in the Eastern District of Texas for infringement. Defendants-Appellees moved to dismiss under Rules 12(b)(3) and 12(b)(6) of the Federal Rules of Civil Procedure, arguing that the patent-specific venue provisions of 28 U.S.C. § 1400(b) were not satisfied because Defendants-Appellees neither resided in the district nor committed acts of infringement there, and that the asserted patent’s claims are ineligible for patenting under § 101.
The district court granted the motions and dismissed on both grounds in a single order. It first concluded that Patentee-Appellant had failed to establish venue under § 1400(b) and that, “[f]or this reason alone, the case should be dismissed.” It then held the patent’s claims ineligible under § 101 and dismissed for that reason as well. Patentee-Appellant moved under Rule 59(e) to amend the judgment to vacate the ineligibility dismissal or, alternatively, to amend its complaint. The district court denied the motion, explaining that it was not “aware of any controlling authority forbidding courts from considering venue and substantive issues together when those issues were briefed and argued together,” and that, because no party had identified a district to which the case might have been transferred under 28 U.S.C. § 1406(a), it had “discretion to decide whether dismissal was appropriate on multiple grounds” and exercised that discretion “in the interest of efficiency.”
On appeal, Patentee-Appellant did not dispute the merits of either the venue or the eligibility ruling. It argued instead that: 1) once the district court concluded that venue was improper, it should have stopped there and dismissed solely on that ground; and 2) the ineligibility dismissal should be vacated because it was unnecessary to the judgment and therefore will not have preclusive effect in future cases. Because the appeal concerned the district court’s docket-management authority and presented no issue unique to patent law, the Federal Circuit applied the law of the regional circuit, here the Fifth Circuit, and reviewed the district court’s docket management for abuse of discretion.
The Federal Circuit first observed that Patentee-Appellant did not appear to contend that the district court lacked the power to dismiss for failure to state a claim after finding venue improper, and the court saw no such limitation on the district court’s authority. The court explained that, unlike subject-matter jurisdiction, venue concerns the convenience of litigants rather than the court’s power and is a personal privilege that may be waived. The court contrasted this with the usual treatment of Rule 12(b)(1) subject-matter-jurisdiction grounds, which are ordinarily resolved first and may alone support dismissal, and observed that Rule 12(b)(3) venue challenges do not receive the same categorical treatment among concurrently raised Rule 12(b) grounds.
Turning to Patentee-Appellant’s contention that the district court should have refrained from reaching eligibility, the court rejected the argument for several reasons. Although venue motions should receive “top priority” rather than languish while parties conduct extensive merits litigation, that principle does not address what a district court may do after concluding that venue is improper. In any event, the district court did prioritize the venue motion, staying the case pending that resolution and resolving the venue challenge before ruling on any merits issue. And, because a key purpose of prioritizing venue is to protect the venue-objecting movant from litigating in an objectionable venue, and Patentee-Appellant “clearly wanted to keep litigating in the Eastern District of Texas,” it was “hardly apparent that [Patentee-Appellant] could be heard to complain.”
The court further explained that a district court should generally resolve a venue motion before taking up a substantial merits-related motion because the venue motion may be simpler to evaluate and, if transfer is warranted, the transferee court should adjudicate the merits. However, that principle did not establish an abuse of discretion here because the district court addressed venue first and did not determine that transfer was warranted; instead, it dismissed for improper venue and then dismissed independently for failure to state a claim.
The court went further, holding that “certain judicial-economy considerations actually favor the district court’s approach of deciding both grounds” where a motion to dismiss raises both Rule 12(b)(3) and Rule 12(b)(6) grounds. By deciding both, the district court “enabled this court to review the merits of both decisions in the same appeal.” Had the court dismissed only for improper venue, and had the Federal Circuit reversed and remanded, the district court might then have dismissed on eligibility, “which would have likely prompted yet another appeal.” Deciding the two concurrently raised grounds together “helped avoid the prospect of such inefficient, piecemeal appeals.”
As for Patentee-Appellant’s request for vacatur of the patent-ineligibility dismissal, the Federal Circuit rejected this argument as a request for “essentially an advisory opinion on the preclusive effect that the district court’s judgment (and ours) might have in future cases.” The court explained that the precise preclusive effect of the judgment must be decided in any later action that may be brought. It saw no reason to depart from that rule and declined either to vacate the dismissal or to declare it without preclusive effect.
The decision confirms that a district court presented with concurrent Rule 12(b)(3) and Rule 12(b)(6) grounds may resolve both, and that doing so may be favored by judicial-economy considerations.
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