The Supreme Court on Monday issued its decision in TC Heartland LLC v. Kraft Food Group Brands LLC, 581 U. S. ___ (2017), altering the landscape of patent litigation venue. The Court ruled unanimously that "a domestic corporation 'resides' only in its State of incorporation for purposes of the patent venue statute." TC Heartland, 581 U. S. ___, slip op. at 2. Venue over a domestic corporate defendant is now proper:
- in the judicial district where the defendant resides, that is, its State of incorporation, or
- "where the defendant has committed acts of infringement and has a regular and established place of business." 28 U.S.C. §1400(b).
Before the Supreme Court's TC Heartland decision, the Federal Circuit in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F. 2d 1574 (1990), deemed a domestic corporate defendant to "reside in any judicial district in which it is subject to personal jurisdiction," as set forth in the general venue statute 28 U.S.C. § 1391(c). Under the VE Holding interpretation of domestic corporate residence, plaintiffs had broad latitude in selecting a venue. This latitude resulted in a high proportion of patent cases filed in patentee-friendly districts, such as the Eastern District of Texas. As a possible reaction to this trend and alleged forum-shopping abuses, the Supreme Court overruled the VE Holding interpretation of the Patent Venue Statute—28 U.S.C. §1400(b). The Court reiterated its analysis in Transmirra Prods. Corp. v. Fourco Glass Co., 353 U. S. 222 (1957), finding §1400(b) to be "the sole and exclusive provision controlling venue in patent infringement actions," and that domestic corporations reside in their State of incorporation. TC Heartland, 581 U. S. ___, slip op. at 5, 7-8.
As a result, domestic corporations can be sued only in their State of incorporation, which in many cases is Delaware, or where the corporation has committed acts of infringement and has a regular and established place of business. But the TC Heartland decision leaves several unanswered questions. The Court's holding expressly does not apply to foreign corporations. Id. at 7 n. 2. The Court also did not specifically address venue for partnerships and other non-corporate entities. The opinion also does not provide guidance on the meaning of "regular and established place of business," which will likely be the subject of future litigation.
The TC Heartland decision will nonetheless alter the landscape of patent litigation, likely causing a migration of patent cases from the Eastern District of Texas to Delaware and other venues.