Federal Circuit Rejects Eastern District of Texas’s Post-TC Heartland Venue Test

by Bradley Arant Boult Cummings LLP

Bradley Arant Boult Cummings LLP

In In re Cray Inc., the Federal Circuit directed the Eastern District of Texas to transfer a patent infringement case brought by Raytheon against Cray out of the district. In doing so, the Federal Circuit rejected the district court’s multi-factor test for determining whether a defendant maintained a “regular and established place of business” within the district and instead held that three general requirements must be satisfied: (1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.

The patent venue statute, 28 U.S.C. § 1400(b), limits venue to districts in which a defendant resides or in which it maintains a regular and established place of business and committed acts of infringement. In TC Heartland, the Supreme Court narrowed the residence provision of the venue statute to a corporate defendant’s place of incorporation. That narrowing placed new importance on determining where a defendant maintains a “regular and established place of business.”

Following TC Heartland, Cray moved to have Raytheon’s patent infringement suit against it transferred out of the Eastern District. The court denied the motion. Analogizing to the Federal Circuit’s decision in In re Cordis Corp., 769 F.2d 733 (Fed. Cir. 1985), the court found that Cray maintained a regular and established place of business in the district because a Cray employee worked remotely from his home there. An internal Cray document identified the employee as an account manager based at his home in the Eastern District, and Cray reimbursed the employee for cell phone usage, internet fees, and mileage or other business costs. The employee also received administrative support from Cray’s Minnesota offices.

In addition to finding that Cray maintained a regular and established place of business in the district, the court also set forth a multi-factor framework to assess the question in future cases: (1) physical presence; (2) the defendant’s representations; (3) benefits received; and (4) targeted interactions with the district. The court noted that none of the factors would be considered dispositive; thus, a fixed physical location was not required. Ultimately, the court concluded that it should consider the “totality of the circumstances” to “determine whether a domestic business enterprise seeks to materially further its commercial goals within a specific district through ways and means that are ongoing and continuous.” Cray then sought a writ of mandamus directing the court to transfer the case.

The Federal Circuit granted the writ, holding that the district court had misinterpreted Cordis in determining what constitutes a “regular and established place of business” under § 1400(b). The Federal Circuit identified three requirements relevant to the question. First, there must be a physical place in the district. Virtual spaces or electronic communications are not sufficient. Second, it must be a regular and established place of business. Temporary presence like a semiannual appearance at a trade show would not be sufficient. Third, it must be the place of the defendant. So, for instance, if the place is a home, the defendant “must establish or ratify the place of business,” which might be demonstrated by the defendant owning, leasing, or otherwise controlling the space. It could also be shown by the defendant conditioning an employee’s employment on residence in the district or storing materials at the residence for distribution or sale from the location. If any one of those requirements is not satisfied, venue is not proper under § 1400(b).

Applying its test to Cray, the Federal Circuit concluded that venue was not proper in the Eastern District. There was no evidence that Cray chose where the employee lived, that it believed the location to be important to its business, that it would maintain some other place of business in the district if the employee did not live there, or that it exercised any ownership or control over the home. Simply allowing the employee to live in the district was not enough to make his home a place of business established by Cray.

The decision provides important clarification as to what constitutes a “regular and established place of business” under the patent venue statute—a question of little import prior to TC Heartland. By requiring a purposeful physical presence in the district, the Federal Circuit’s three requirements should prove more restrictive as to where patent infringement suits may be brought as compared to the multi-factor test adopted by the Eastern District.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bradley Arant Boult Cummings LLP | Attorney Advertising

Written by:

Bradley Arant Boult Cummings LLP

Bradley Arant Boult Cummings LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.