Bass, Berry & Sims attorneys Greg Parker and Andy Rittenhouse authored an article for the January 2018 edition of The Intellectual Property Strategist discussing the significant impact the Supreme Court case TC Heartland LLC v. Kraft Foods Group Brands LLC has had on patent litigation since the Court's ruling in May 2017.
The patent venue statute states that any civil action for patent infringement can be brought in the judicial district where (1) the defendant resides or (2) where the defendant has committed acts of infringement and has a regular and established place of business. The main issue of TC Heartland was the scope of the first prong — where a defendant "resides" for purposes of determining proper patent venue. "For nearly three decades, district courts throughout the United States have interpreted 'resides' in the patent venue statute to include not only where a defendant is incorporated but also any district where a defendant is subject to personal jurisdiction, i.e. virtually any district where a defendant's accused products or services could be found," explained Greg and Andy.
The Supreme Court, however, ruled that a domestic corporate defendant only "resides" in its state of incorporation, substantially narrowing the scope of where an alleged infringer can be sued for patent infringement under the first prong of the patent venue statute. The impact of TC Heartland has been felt in district courts across the United States as filing trends have dramatically changed over the last seven months. For example, the Eastern District of Texas — the most popular venue for patent holder litigants over the last decade — experienced a profound decrease in the number of patent infringement filings following TC Heartland. Meanwhile, the District of Delaware — where over half of all publicly traded domestic companies are incorporated — experienced a significant increase of new patent infringement filings following TC Heartland.
District courts have also been faced with questions concerning the scope of the second prong of the patent venue statutes, specifically what constitutes a "regular and established place of business," and the Federal Circuit recently weighed in also narrowing the scope of where plaintiffs can file patent infringement suits under the second prong of the patent venue statute. The result of TC Heartland and its progeny is a dramatic reduction in the number of possible patent venues where patent holders can properly file suit. "While future cases will no doubt raise new issues and questions regarding the second prong of the patent venue statute, the current filing trends are likely to continue as the impact of TC Heartland and its progeny resonates through district courts across the country."
The full article, "The Profound Effect of TC Heartland on Patent Litigation," was published in the January 2018 issue of The Intellectual Property Strategist and is available to subscribers online.