United States Supreme Court Limits Venue in Patent Infringement Cases
May. 23, 2017|By Gregory B. Collins
On May 22, 2017, the United States Supreme Court issued its opinion in TC Heartland, LLC v. Kraft Foods Group Brands, LLC. In a unanimous 8-0 decision (Justice Gorsuch abstained), the United States Supreme Court held that venue for patent infringement actions is governed only by 28 U.S.C. § 1400(b). This statute provides that “any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant committed acts of infringement and has a regular and established place of business.”
In so holding, the Court overturned almost 20 years of jurisprudence. In VE Holding Corp., v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), the Federal Circuit Court of Appeals held that “resides” as used in 28 U.S.C. § 1400(b) has the same meaning as “residence” as used in the general venue statute, 28 U.S.C. § 1391(c). This meant that patent infringement suits were appropriate anywhere where the defendant was subject to personal jurisdiction. Consequently, defendants could be sued for patent infringement in states where they sold or marketed an allegedly infringing product. As a result, sophisticated patent holders sought out favorable jurisdictions. In 2015, 2,540 patent infringement suits (43% of all patent infringement suits filed in the United States) were filed in The Federal District Court for the Eastern District of Texas.
With the Supreme Court’s decision in TC Heartland, patent infringement suit will now often take place in the defendant’s home-state. Venue for patent infringement suits is only appropriate: 1) in the defendant’s state of incorporation or 2) where the defendant committed an act of infringement and the defendant has a regular and established place of business.
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