Federal Circuit Overturned as SCOTUS Creates a New Patent Venue Rule

In TC Heartland LLC v. Kraft Foods Group Brands LLC, the Supreme Court fundamentally changed the national patent litigation landscape when it considered “where proper venue lies for a patent infringement lawsuit brought against a domestic corporation” and held that “[a]s applied to domestic corporations, ‘reside[nce]’ in § 1400(b) refers only to the State of incorporation.”

In so holding, the Supreme Court altered the established patent venue rule – that a corporation is deemed to reside anywhere in which it is subject to personal jurisdiction at the time the action is commenced – which was established by the Federal Circuit’s decision in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990). In VE Holding, the Federal Circuit held that the definition of venue in § 1391(c), the general venue statute, also applied to patent cases.

The Supreme Court based the TC Heartland decision on its prior ruling in Fourco Glass Co. v. Transmirra Products Corp., 335 U.S. 222 (1957) in which, as it described in TC Heartland, it “definitively and unambiguously” held that “residence” in § 1400(b) “refers only to the State of incorporation” as well as its reasoning that “[t]he current version of § 1391 [as amended in 2011] does not contain any indication that Congress intended to alter the meaning of § 1400(b) as interpreted in Fourco.”

Unsurprisingly, predictions abound  regarding the effect of the TC Heartland ruling on patent litigation including expectations of a decrease in cases in the Eastern District of Texas, an increase in cases in the District of Delaware, and more litigation over the meaning of “regular and established place of business.”

Gibbons will monitor and report on patent venue developments.

Tryn T. Stimart, a Director in the Gibbons Intellectual Property Department, and Christine A. Gaddis, an Associate in the Gibbons Intellectual Property Department, authored this post.
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