27-Year Expansive Patent Venue Reign Ends

Published May 22, 2017

The Supreme Court ruled 8-0 that a domestic corporation’s residence — for purposes of the special federal “venue” statute governing where parties may be sued for patent infringement — is only its State of incorporation. The Court had so ruled 60 years ago, but the Court of Appeals for the Federal Circuit later ruled in 1990 that the earlier decision was no longer controlling. Today, the Supreme Court disagreed. The Court ruled in a short opinion, in effect, that Congress had done nothing to change the Court’s 1957 interpretation of “residence” in this statute.

This ruling will be felt most strongly in the Eastern District of Texas, where approximately 40% of all patent infringement lawsuits have been filed in recent years under the Federal Circuit’s expansive view of venue in patent lawsuits.

But it will not end all uncertainty concerning “venue” in patent lawsuits. Courts now will be asked to decide disputes over the second prong of the patent venue statute:  “Any 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.” There are many older decisions on where a company has a “regular and established place of business,” and those will be dusted off and litigated in the months and years ahead.

In the Supreme Court, Klarquist filed an amici brief on behalf of four of the country’s most prominent financial services member organizations, asking the Court to rule as it today ruled. See link to the brief.

The case is TC Heartland LLC d/b/a Heartland Food Products Group v. Kraft Food Groups Brand LLC. The four amici are American Bankers Association, The Clearing House, Financial Services Roundtable and Consumer Bankers Association. They are represented by Klaus H. Hamm and John D. Vandenberg.

Link to the decision.