The Supreme Court used a dispute over flavored drink mix to settle a question regarding the proper venue for patent infringement actions, unanimously ruling in TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341, that such actions, when brought in the venue where a defendant corporation “resides”, may only be brought in the judicial district where the corporation is incorporated.
The patent venue statute, 28 U.S.C. §1400(b), provides that patent infringement actions 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.” Interpreting that law in Fourco Glass Co. v. Transmirra Prods. Corp., the Supreme Court held that a domestic corporation “resides” only in its state of incorporation for patent venue– differing from the general venue statute, 28 U.S.C. §1391(c), which provided that a corporate defendant “resides” in any state in which it is subject to personal jurisdiction, including any state in which the corporation conducts a sufficient amount of business. A 1988 congressional amendment to the general venue statute appeared to expand its scope and undermine the holding in Fourco. Indeed, in 1990, the Court of Appeals for the Federal Circuit held that the general venue statute had generally supplanted the patent venue statute, and that corporations could be sued for patent infringement in any venue where the corporation was subject to personal jurisdiction.
However, the Supreme Court held in TC Heartland that Congress did not intend to supplant or change the meaning of the patent venue statute as set forth in Fourco. The Court noted, among other things, that congressional amendments to the general venue statute in 2011 clarified that it does not apply when venue is “otherwise provided by law,” and deleted statutory language broadening the scope of the law.
Although the Court’s ruling is technical in nature, it will have a real effect on where patent infringement plaintiffs can file lawsuits. Commentators have predicted that the decision will increase litigation in Delaware, New York, and California.
