Patent Infringement Cases Will be Closer to Home

As has been widely observed over the past several years, certain locations have become preferred venues for patent infringement suits. Naturally, any plaintiff looking to file such a suit will seek a venue that is most likely to produce a favorable result. Many business people recognize the Eastern District of Texas as one location that is favorable to patent owners. Based on a recent Supreme Court decision, infringement cases will likely spread out across the country.

The specific statute governing patent infringement cases (28 U.S.C. § 1400(b)) states that any “civil action for patent infringement may be brought in the judicial district where the defendant resides, or, where the defendant had committed acts of infringement and has a regular and established place of business.” A related statute, directed towards venue in general litigation as opposed to patent litigation, indicates that a corporation “shall be deemed to reside, if a defendant, in a judicial district in which such defendant is subject the courts personal jurisdiction with respect to the civil action in question.” 28 U.S.C. § 1391(a), (c). For the past several years, the federal district courts have defined “resides” using this latter, less stringent, definition (i.e. where the company is subject to personal jurisdiction). 

Generally speaking, a Federal District Court has personal jurisdiction over a company when the company has some minimum contacts with that district. In some cases, courts have found online sales of an allegedly infringing product to purchasers within that district sufficient to establish minimum contact. The alleged infringer need not have employees, an office or other facility in the district to meet this requirement. Again, certain districts in the US, including the Eastern District of Texas, have developed a reputation as being very plaintiff friendly, and thus a desired location for patent holders to bring infringement suits. This approach will change in light of the Supreme Court’s recent decision in TC Heartland LLC v. Kraft Foods Group Brand LLC. 

Upon review, the Supreme Court recently determined that the specific patent venue statute controlled, and thus venue is only appropriate in those jurisdictions where (i) the defendant resides, or, (ii) where the defendant had committed acts of infringement and has a regular and established place of business. Further, a corporation is deemed to “reside” only in its state of incorporation. Under this standard, the defendant must either be incorporated in the district or have an office or other facility in the district where the lawsuit is filed. Depending on the corporation, this higher standard for determining appropriate jurisdiction could substantially restrict the courts in which a corporation can be sued for patent infringement.

Based on past practices, many corporate defendants have been subject to lawsuits in “undesirable” locations. In view of the TC Heartland decision, it will now become much more difficult for patent holders to establish this “home field advantage” for patent infringement suits.