Initial Thoughts on TC Heartland Opinion and Patent Litigation Venue

On May 22, 2017 the U.S. Supreme Court unanimously decided TC HEARTLAND LLC v. KRAFT FOODS GROUP BRANDS LLC.

The Court held that the scope of venue for patent cases is not commensurate with personal jurisdiction, which allows patent owners to bring suit in any venue, e.g., a presumed-to-be favorable venue like the Eastern District of Texas. The Court identifies that venue is limited under 28 USC 1400(b) as “[A]ny civil action for patent infringement maybe brought in the judicial district where the defendant [1] resides, or where the defendant [2] has committed acts of infringement and has a regular and established place of business.”

The case holds that for the [1] “resides” will be the judicial district where the defendant is incorporated, but the Court did not address the meaning or scope of [2] “acts of infringement and a regular and established place of business.” Of course, in footnote 2 the Court “punts” on alien defendants, which seem to be unaffected by the ruling for now.

Reading and discussing the Opinion, I’ve seen 5 key steps for the evolution of those in and around the patent litigation community:

  1. Everyone thinks E.D.T.X. will be closed, everything will filed be in N.D.C.A. or D.E.
    (e.g., 65% of Fortune 500 companies are incorporated in Delaware)

  2. Wait, what does prong 2, i.e., “regular and established place of business,” really mean?
    Blank Rome took a look back in March.

  3. So TC Heartland may allow venue in Texas still…
    Reuters noted:
    “The Supreme Court’s ‘regular and established place of business’ could be as simple as a retail store, said … a patent lawyer … in Marshall, Texas who often represents defendants. He noted Apple Inc, a frequent target for East Texas patent lawsuits, has stores in Plano and Frisco, two Dallas suburbs that fall within the district.”

  4. Well that’ll only work for bigger players, e.g., corporations w/ retail. Small Enterprise and “Mom and Pops” will be spared, right?
    Some people in Maine feel like suing their companies has become harder:

    “It’s not uncommon for these entities to bring 500 cases if not on the same day then over the course of a couple of months,” Robert Abrahamsen, a Portland-based partner with Pierce Atwood LLP, told Mainebiz.
    He said that the Supreme Court decision was “fairly big news in the patent world” and good news for Maine firms, especially smaller ones with no out-of-state physical presence. “The likelihood of getting sued by one of these [patent assertion] companies has gone down substantially,” he said.

  5. Ok, well, where will NPEs and other patent owners sue “Mom and Pops” via the well-known shotgun method? i.e., how many Small and Medium Enterprises are incorporated in DE?

More soon…

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