In In re TC Heartland LLC, Appeal No. 2016-105, the Federal Circuit denied Heartland’s petition for a writ of mandamus to transfer venue from the District of Delaware to the Southern District of Indiana. The Federal Circuit also denied the petition for dismissal due to lack of specific personal jurisdiction.
Kraft Foods sued Heartland for patent infringement in the District of Delaware. Heartland, a company organized under the laws of Indiana and having its principal place of business there, moved the district court to dismiss for lack of personal jurisdiction or transfer venue to the Southern District of Indiana. The district court denied the motion.
Heartland then petitioned for a writ of mandamus to direct the district court to either dismiss or transfer the suit. Heartland first argued that it does not “reside” in Delaware for venue purposes under 28 U.S.C. § 1400(b), interpreting this statute’s phrase “established place of business” to mean corporate residence. The Federal Circuit confirmed its prior holding in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), confirming that that the definition of corporate residence in 28 U.S.C. § 1391(c) applies to § 1400. Under § 1391(c), “an entity . . . shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question.”
Regarding personal jurisdiction, Heartland asserted that their sales of the accused infringing product within the state of Delaware were to fulfill a “nationwide” contract and that their sales within Delaware amounted to only 2% of their total nationwide sales. Heartland concluded from these facts that Kraft could only sue in Delaware for these 2% of sales, and if Kraft wanted to sue for all of Heartland’s sales, it would have to sue in Heartland’s state of incorporation. The Federal Circuit concluded that the Delaware sales were enough to establish minimum contacts. The Federal Circuit therefore denied Heartland’s petition for a writ of mandamus to dismiss or transfer the case.