Today the Supreme Court dealt a substantial blow to forum shopping in patent infringement cases in TC Heartland LLC v. Kraft Foods Group Brands LLC. For the past three decades, the Federal Circuit has interpreted the word "resides" in the patent venue statute to be as broad as the general venue statute. This effectively allowed patent owners to sue defendants in any district where an allegedly infringing product was sold. Not anymore. In TC Heartland, the Supreme Court reaffirmed its 1957 decision in Fourco Glass Co. v. Transmirra Products Corp., holding that "resides" under the patent venue statute means only one place: the defendant's state of incorporation. As a result, venue options will be much more limited for patent owners, and the District of Delaware is likely to be the new epicenter of patent litigation.
BOTTOM LINE ISSUE
The Supreme Court's decision finally clarified the tension between 28 U.S.C. 1400(b) (venue for patent infringement cases) and 28 U.S.C. 1391(c) (venue generally). Since 1988, the Federal Circuit has held that a domestic corporation can be sued in any district in which it was subject to personal jurisdiction, reasoning that Congress's amendments to general venue law under 1391 applied to 1400 as well. According to the Supreme Court, however, "[b]ecause Congress has not amended 1400(b) since Fourco, and neither party asks the Court to reconsider that decision, the only question here is whether Congress changed 1400(b)'s meaning when it amended 1391." The Supreme Court concluded that Congress did not indicate making such a change to 1400(b), and "resides" for purposes of patent infringement still means what it did in Fourco defendant's state of incorporation.
BOTTOM LINE IMPACT
Following TC Heartland, venue for patent infringement cases is limited to (1) the judicial district where the defendant is incorporated or (2) the judicial district where the infringement occurred but only if the defendant has a "regular and established place of business" there. Accordingly, plaintiff-friendly patent infringement venues, most notably the Eastern District of Texas, are likely to see a swift reduction in cases because defendants sued there are unlikely to satisfy 1400(b). Conversely, Delaware the state of incorporation for more than 60% of the Fortune 500 and the majority of U.S. public companies will likely see a huge influx of patent infringement cases. Given that the District of Delaware is already an active patent infringement venue, the impact on that court's docket will be interesting to watch.