On Nov. 15, the United States Court of Appeals for the Federal Circuit clarified that the United States Supreme Court’s holding in TC Heartland LLC v. Kraft Food Group Brands LLC — that a corporation “resides” only in its state of incorporation or where it has a “regular and established place of business” — was a change in law on proper venue for filing a patent infringement lawsuit against a corporate defendant. However, even though a change in law has occurred, questions remain as to whether a corporate defendant in a patent infringement lawsuit can rely upon this holding in order to successfully challenge venue.
Prior to the Supreme Court’s decision in TC Heartland, district courts had long held that a plaintiff could file a patent infringement suit against a corporate defendant in virtually any district in which the defendant had sold infringing products, relying upon the general venue statute. In TC Heartland, however, the Supreme Court determined that the patent statute serves as the exclusive statute for determining venue for a domestic corporation sued for patent infringement. The Supreme Court held that a patent infringement lawsuit against a corporate defendant may only be brought in a judicial district where the defendant “resides,” which is defined as the “state of incorporation” or where the defendant has committed acts of infringement and has a “regular and established place of business.”
Based upon the TC Heartland decision, many corporate defendants in patent infringement lawsuits have filed motions requesting that their cases either be dismissed or transferred to their states of incorporation. These motions, however, have faced strong opposition from plaintiffs contending that, pursuant to the Federal Rules of Civil Procedure, the defendants had waived their ability to challenge venue if the issue had not been raised prior to filing their answer. As a result, district courts have struggled to consistently rule on these post-TC Heartland motions. In fact, a large number of them denied these motions, reasoning that TC Heartland had not been a “change in law” that would serve as an exception to the Federal Rule of Civil Procedure that generally requires a defendant to challenge venue prior to filing its answer. Other district courts, however, have held that TC Heartland was a change of law that justified granting the defendant’s motion.
The Federal Circuit has now confirmed that TC Heartland did indeed change the law in its writ of mandamus order in In re Micron Technology, Inc., in which Micron Technology had been seeking to set aside the United States District Court of Massachusetts’ order denying its venue challenge based upon TC Heartland. In its order, the Federal Circuit determined that a challenge based solely upon the venue provisions of the patent statute had not been available until the Supreme Court decided TC Heartland. The Federal Circuit reasoned that had a defendant made such a venue challenge prior to TC Heartland, a district court would have been precluded from even entertaining its position, in light of controlling precedent at the time. As a result, a defendant that had not challenged venue in a patent infringement lawsuit filed before TC Heartland had not waived its right to do so, at least under the Federal Rules of Civil Procedure.
Importantly, however, the Federal Circuit specifically declined to address whether a district court could still hold that a defendant waived a venue challenge through its power “to manage [its] own affairs so as to achieve the orderly and expeditious disposition of cases,” notwithstanding non-waiver under the Federal Rules of Civil Procedure. The Federal Circuit made it a point to discuss that a defendant seeking a venue change close to trial, or one that utilizes a “wait and see” approach before deciding to move for a change of venue, may have waived its ability to challenge venue.
In light of In re Micron Technology, Inc., a corporate defendant in a patent infringement lawsuit pending in the wrong venue should consider filing a motion to dismiss or to transfer venue. However, in filing its motion, the defendant should be wary that the Federal Circuit has left the door open for district courts to nonetheless deny post-TC Heartland venue challenges, particularly for cases close to trial. As a result, some district courts will still consider how long cases have been pending and potentially other factors, such as proximity to trial, in deciding whether to grant venue challenges based upon TC Heartland, while others will continue not to do so. Thus, whether or not a TC Heartland-based venue challenge will be successful remains uncertain, notwithstanding the “change of law” found in In re Micron Technology, Inc.