The US Court of Appeals for the Federal Circuit affirmed a district court’s dismissal on both improper venue and patent eligibility grounds, finding no abuse of discretion in the district court’s decision to decide a Rule 12 (b)(6) patent eligibility challenge after first determining that venue was improper. AML IP, LLC v. Bath & Body Works Direct, et al., Case No. 2025-1280 (Fed. Cir. Aug. 28, 2026) (Prost, Bryson, Reyna, JJ.)
AML IP sued Bath & Body Works Direct in the US District Court for the Eastern District of Texas, alleging infringement of a patent directed to e-commerce methods. The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(3) for improper venue and Rule 12(b)(6) for failure to state a claim, arguing that the asserted patent claims were ineligible under 35 USC § 101. The district court first determined that AML had failed to establish proper venue under 28 USC § 1400(b), concluding that “[f]or this reason alone, the case should be dismissed.” It nevertheless proceeded to the defendants’ Rule 12(b)(6) arguments and concluded that the asserted claims were patent ineligible under § 101. AML appealed.
AML did not challenge the merits of either ruling. Instead, it argued that once the district court determined that venue was improper, it should have stopped and dismissed the case solely on that basis rather than addressing patent eligibility.
Because AML’s challenge concerned the district court’s docket-management authority (an issue not unique to patent law), the Federal Circuit applied Fifth Circuit law and reviewed the district court’s decision for abuse of discretion. The Federal Circuit emphasized that AML did not contend that the district court lacked authority to decide the Rule 12(b)(6) motions after finding venue improper. Rather, AML argued only that the district court should have declined to do so.
The Federal Circuit rejected AML’s reliance on cases stating that venue motions should receive “top priority.” Those cases, the Court explained, generally require a district court to address venue before proceeding to substantive matters, but they do not necessarily restrict what a district court may do after determining that venue is improper. The district court here complied with that principle by resolving venue first and even staying the litigation while the dismissal motions were pending.
The Federal Circuit also noted that the “top priority” principle is intended primarily to protect a party challenging venue from being forced to litigate substantive issues in an objectionable forum. Here however, it was AML – the plaintiff that had selected the Eastern District of Texas – that sought to invoke the priority principle, rather than the defendants that had challenged venue.
AML separately relied on district court decisions in which courts resolved venue motions without deciding pending merits motions. The Federal Circuit found those decisions distinguishable. They reflected the “common-sense principle” that district courts ordinarily should decide venue first when transfer may be appropriate so that the transferee court can resolve substantive issues. No transfer was at issue here. The district court dismissed for improper venue, no party identified an alternative district to which the cases could have been transferred, and AML did not challenge the decision not to transfer.
The Federal Circuit further noted that judicial economy supported the district court’s approach. By resolving the independently sufficient venue and patent eligibility grounds in the same order, the district court allowed both rulings to be reviewed in a single appeal. Had the district court addressed only venue and had that decision later been reversed, the parties could have returned to the district court for a ruling on patent eligibility under § 101 and then pursued a second appeal. Addressing both grounds therefore reduced the possibility of piecemeal appellate proceedings.
Finally, AML argued that the § 101 dismissal should be vacated because it was unnecessary to the judgment and therefore would not have preclusive effect in future litigation. The Federal Circuit declined to address the premise of that argument, explaining that the preclusive effect of a judgment is determined in a subsequent proceeding in which preclusion is asserted. The Court would not issue what it characterized as an advisory opinion regarding the effect the district court’s § 101 ruling might have in future cases.
