AML IP v. Bath & Body Works: Improper Venue Does Not Bar a Simultaneous Section 101 Dismissal.

On August 28, 2026, the Federal Circuit issued a precedential opinion in AML IP, LLC v. Bath & Body Works Direct, Inc., No. 2025-1280 (Prost, Bryson, and Reyna, JJ., opinion by Prost). It affirmed a single Eastern District of Texas order, AML IP, LLC v. Bath & Body Works Direct, Inc., No. 4:22-cv-216, 2024 WL 3825242 (E.D. Tex. Aug. 13, 2024), that dismissed for improper venue and, in the same stroke, for ineligibility under section 101.

What the district court did

AML sued Bath & Body Works Direct and The Buckle in the Eastern District of Texas (Judge Sean D. Jordan; lead case No. 4:22-cv-00216) on U.S. Patent 6,876,979, which describes e-commerce methods using a "bridge computer" as a clearinghouse. Each appellee moved to dismiss under Rule 12(b)(3) (venue under 28 U.S.C. 1400(b)) and Rule 12(b)(6) (section 101). In one order, the court held venue improper and also held the claims ineligible. AML's Rule 59(e) motion asked the court to vacate the 101 ruling and dismiss on venue alone. The court refused. A related appeal as to Big Lots remains stayed under the bankruptcy automatic stay; this opinion applies only to the non-Big Lots appellees.

The holding

AML did not challenge the merits of the venue ruling or the section 101 ruling. It argued only that, once venue was found improper, the court had to stop. The Federal Circuit disagreed. Venue is waivable and does not strip the court of power the way subject-matter jurisdiction does. Sequencing two concurrently briefed Rule 12 grounds is docket management, reviewed for abuse of discretion under Fifth Circuit law. AML cited no authority forbidding a court from deciding both. Judicial economy actually favors deciding both when they were briefed together: one appeal can review both, instead of a venue reversal, a later 101 dismissal, and a second appeal. The court also refused AML's request for a statement that the 101 dismissal has no preclusive effect. That would be an advisory opinion; preclusion is tested in a later case.

What it means in practice

Defendants who brief venue and section 101 together may get both rulings in one order, and plaintiffs should not expect the 101 piece to fall away automatically if venue fails. The opinion does not bless 101 rulings after a finding of no subject-matter jurisdiction, and it does not decide whether this 101 dismissal will bind later cases. Those are different questions.

What to watch next

Whether later courts treat this as limited to concurrently briefed 12(b) motions, and whether a subsequent AML case tests the preclusive effect the Federal Circuit declined to decide.