By: Gina Lee
On August 28, 2026, the U.S. Court of Appeals for the Federal Circuit issued a precedential opinion in AML IP, LLC v. Bath & Body Works Direct, Inc., 2026 U.S. App. LEXIS 26317 (Fed. Cir. Aug. 28, 2026) addressing an important procedural question: whether a district court that dismisses a case on venue grounds can then proceed to adjudicate and dismiss on substantive grounds.1
The Federal Circuit answered in the affirmative, holding that because venue is a waivable personal privilege rather than an absolute bar, the district court has the docket-management authority to rule on multiple grounds for dismissal.2
AML IP, LLC (“AML”) sued Bath & Body Works Direct, Inc. and The Buckle, Inc. (“Appellees”) in the U.S. District Court for the Eastern District of Texas for patent infringement, asserting U.S. Patent No. 6,876,979 (“the ‘979 patent”).3 The patent covers “e-commerce methods using a ‘bridge computer’ to facilitate interactions between difference service providers.”4 The Appellees moved to dismiss on two grounds: (1) improper venue; and (2) failure to state a claim, alleging that the ‘979 patent claims were directed to ineligible subject matter under 35 U.S.C. § 101.5 The district court granted the motion to dismiss on both grounds.6 First, the court held that the venue was improper, stating “for this reason alone, the case should be dismissed.”7 Next, rather than ending the analysis there, the court proceeded to evaluate the patent-ineligibility argument and found that the ‘979 patent claims were invalid, independently dismissing the case for that reason as well.8
On appeal, AML did not dispute the substantive grounds on which the dismissal was granted.9 Instead, AML argued that the district court erred by deciding on the motion to dismiss for patent eligibility after it had already dismissed for improper venue.10
The Federal Circuit affirmed the district court’s judgment, holding that the district court did not abuse its discretion by addressing both grounds for dismissal in the same order.11 The court reasoned that “[u]nlike subject-matter jurisdiction, . . . venue is waivable and does not implicate a court’s power to act.”12 AML argued that despite the district court’s power to reach decisions on multiple grounds, “it nonetheless should have refrained from doing so.”13 The Federal Circuit rejected this argument.14 The Federal Circuit found AML’s reliance on precedent directing district courts to give venue and transfer motions “top priority” unpersuasive because the district court had in fact prioritized the venue motion over ineligibility.15 Moreover, the Federal Circuit explained that the main purpose of the top priority rule is “to protect the movant from having to litigate in an objectionable venue.”16 Since AML chose to bring the case in the Eastern District of Texas, AML could not be a “venue-objecting movant.”17 While AML cited to other cases that relate to the sequencing of venue and merits issues, the Federal Circuit found that none establish a rule that prohibits district courts from deciding merits-based dismissals after determining improper venue.18
More significantly, the Federal Circuit emphasized that judicial-economy supported the district court’s decision. The decision helped prevent “inefficient, piecemeal appeals.”19 “[O]therwise—for example, by dismissing only for improper venue without reaching the Rule 12(b)(6) eligibility ground—and had we reversed its improper-venue dismissal and remanded, the district court might have then dismissed on the Rule 12(b)(6) eligibility ground, which would have likely prompted yet another appeal.”20
AML also argued that the dismissal for ineligibility should be vacated because without vacatur, the patent-ineligibility ruling might have preclusive effect in other cases.21 The Federal Circuit rejected this argument as well, noting that “AML simply wants this court to confirm that the patent-eligibility dismissal will not have preclusive effect.”22 The court declined to resolve the issue, explaining that the decision would amount to an advisory opinion because precedent states that the preclusive effect of a judgment can only be determined in a subsequent action.23
The AML v. Bath & Body Works decision clarifies that district courts may decide on substantive grounds for dismissal even after dismissing for improper venue, reinforcing their discretion to manage their dockets in the interest of judicial economy. For defendants, this signals that coupling venue objections with substantive challenges remains a strategy for seeking speedier termination of litigation. Additionally, the Federal Circuit’s reasoning is likely to be equally applicable to other defenses—such as lack of personal jurisdiction and insufficient service of process—that implicate the personal privilege of defendants. However, by declining to address the preclusive effect of the patent-eligibility dismissal, the Federal Circuit left undecided whether—and to what extent—the patent can be asserted in future litigation.
