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Supreme Court Agrees to Consider Reach of Patent-Venue Statute

On Wednesday, the Supreme Court granted cert in TC Heartland LLC v. Kraft Food Brands LLC, No. 16-341, agreeing to consider the reach of the patent-venue statute, 28 U.S.C. § 1400(b). That statute provides that “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”

On Wednesday, the Supreme Court granted cert in TC Heartland LLC v. Kraft Food Brands LLC, No. 16-341, agreeing to consider the reach of the patent-venue statute, 28 U.S.C. § 1400(b). That statute provides that “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”

The Federal Circuit has interpreted the “resides” portion of this provision in line with the general-venue statute, 28 U.S.C. § 1391, and thus has permitted plaintiffs to bring a patent infringement suit in any district where a corporate defendant is subject to personal jurisdiction. See VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1584 (Fed. Cir. 1990). In the instant case, this meant that TC Heartland was subject to suit in the District of Delaware when it shipped an alleged infringing product into the state, notwithstanding that it is an Indiana LLC having no substantial presence in Delaware. In its petition, TC Heartland urges the Court to restore its prior construction of § 1400(b), which held that “resides” in the context of § 1400(b) means, for a corporate defendant, “the state of incorporation only.” Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 226 (1957).

Technology-based companies and patent practitioners will be keeping a close eye on TC Heartland. Under the Federal Circuit’s current interpretation, plaintiffs in patent infringement suits often flock to certain pro-patent jurisdictions including, most notably, the Eastern District of Texas and the District of Delaware. If the Court ultimately restores the rule of Fourco, plaintiffs will be greatly limited in their choice of venue when bringing patent infringement actions against corporate defendants. Namely, plaintiffs will be constrained to either the judicial district where the defendant is incorporated, or any district “where the defendant has committed acts of infringement and has a regular and established place of business.” § 1400(b); Fourco, 353 U.S. at 226.