New SCOTUS Ruling Limiting Venue Shopping in Patent Litigation

In an 8-0 decision, SCOTUS ruled that the term “resides” in the patent venue statute, 28 U.S.C. § 1400 subd. (b), shall refer only to the State of incorporation (as applied to domestic corporations).

In TC Heartland LLC v. Kraft Foods Group Brands, LLC, the respondent filed a patent infringement suit in the District Court for the District of Delaware against petitioner, a competitor, who is organized under Indiana law and headquartered in Indiana.  Petitioner moved to transfer the suit to Indiana, on grounds of improper venue, because it was neither a resident of Delaware nor did it have a “regular and established place of business” there (Delaware was chosen because defendant ships the allegedly infringing flavored fruit drinks into Delaware).

The District Court found venue in Delaware proper, but was later reversed by the Supreme Court of the United States, which held that while the general venue statute of 28 U.S.C. § 1391, subd. (c), which has been amended over time to include a broader definition of corporate “residence” to include any judicial district in which a defendant is subject to personal jurisdiction, this definition of “residence” does not supplant the definition in the patent venue statute, 28 U.S.C. § 1400 subd. (b), which provides that "[a]ny 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."  For the purposes of the patent venue statute, and as defined by prior case law, “resides” means only the state of incorporation.  As a result, patent infringement suits can only be brought in districts where (1) the defendant has committed acts of infringement and has a regular and established place of business; or (2) their State of incorporation.

This ruling is significant for patent owners that are frequently engaged in patent infringement lawsuits because it will end forum shopping to pro-plaintiff and patent-friendly jurisdictions and prevent defendants from being forced to litigate in states in which they have little, if any, connection (other than simply selling products within that state).

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Authored by Jennifer T. Poochigian