US Supreme Court Restricts where Patent Suits Can be Filed

The U.S. Supreme Court interpreted the patent venue statute, 28 USC 1400(b), narrowly to restrict the places were patent suits may be filed in the case of TC Heartland LLC v. Kraft Foods Group Brands, LLC, No. 16-341 (May 22, 2017).

Previously, the Federal Circuitdetermined that section 1400(b) incorporated the broader definition of “residence” contained in 28 USC 1391(c). That broader definition provided that a defendant corporation resides in any judicial district in which the defendant is subject to the court’s personal jurisdiction. The Supreme Court determined that the resident definition section does not apply to section 1400(b) and that a defendant resides, for the purposes of section 1400(b), only in the state where it is incorporated.

Since many corporations are incorporated in Delaware, this ruling is expected to increase the number of patent suits filed there and to reduce the number of patent cases filed in the Eastern District of Texas, which has been a popular patent plaintiffs’ venue.

In addition to the place where the defendant resides, Section 1400(b) also provides that venue is proper where the defendant has committed acts of infringement and has a regular and established place of business. Therefore this second clause of section 1400(b) will likely now get more action. And, courts will have occasion to define the boundaries of what is a “regular and established place of business,” which was not a widely relied upon clause previously.

IPWatchdog and IAM have additional coverage on this ruling.