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Supreme Court to Decide Patent Infringement Suit Venue Issue with Potentially Immense Implications

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The U.S. Supreme Court this week granted TC Heartland, LLC’s (“Heartland’s”) petition for a writ of certiorari regarding the patent infringement venue statute, 28 U.S.C. § 1400(b).  Heartland appealed the Federal Circuit’s refusal to dismiss the case or transfer a patent infringement lawsuit filed against Heartland from Delaware to Indiana, where Heartland is incorporated.  The Supreme Court agreed to address “Whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by 28 U.S.C. § 1391(c).”  If the Supreme Court answers the question in the affirmative, venue options likely will be much more limited for plaintiffs filing patent infringement suits.

Section 1400(b) provides that a “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.”  Section 1391(c), the general venue statute, defines “residency” “[f]or the purposes of venue under this chapter” as “any judicial district in which such defendant is subject to the court’s personal jurisdiction.”  Thereafter, the Federal Circuit, in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), held that the definition of a corporation’s residence in the general venue statute, § 1391(c), applies to the patent infringement suit venue statute, § 1400(b).

Kraft Foods Group Brands LLC sued Heartland for patent infringement in the District of Delaware and Heartland moved to dismiss for lack of personal jurisdiction, or in the alternative to transfer venue to Indiana, its state of incorporation.  The district court denied Heartland’s motion, finding that venue was proper because the court had personal jurisdiction over Heartland based on the fact that it purposefully shipped the accused product into the forum state through an established distribution channel.  Heartland petitioned the Federal Circuit for a writ of mandamus to direct the district court to dismiss or transfer the patent infringement suit, and the Federal Circuit denied the petition.

At the Federal Circuit, Heartland raised two arguments:  (1) that Congress’s 2011 amendments to § 1391 effectively overruled VE Holding Corp., and (2) the court has specific jurisdiction over it only for alleged infringing acts that occurred in Delaware.  The appellate court rejected both arguments, asserting that both issues had been “firmly resolved” by cases decided over 20 years ago, and the 2011 amendments did not affect these decisions.

The Supreme Court’s resolution of this case could have an immense impact on patent owners’ ability to bring suit in patent holder-friendly venues, like the Eastern District of Texas.