June 2017
More Trouble Brewing in the Heartland: Foreign Corporation Immunity and Other Issues Arising from the Supreme
Court’s Venue Decision ........................................................................................................................................................... 2
Oil States: The Constitutionality of the Current Patent Regime ............................................................................................ 4
Non-Disclosing Sales Under the AIA’s On-Sale Bar ................................................................................................................. 6
Federal Circuit Issues Rare Decision Finding Abuse of Discretion in Denying Attorneys’ Fees Award Under Section 285 .. 10
Only Mostly Dead: Pre-Issuance Patent Expiration ............................................................................................................. 12
Evolution of IPR Estoppel ...................................................................................................................................................... 14
Federal Circuit Denies En Banc Review of CBM Eligibility in Secure Axcess ......................................................................... 16
The Register of Copyrights Selection and Accountability Act of 2017 .................................................................................. 18
Matal v. Tam: Trademark Disparagement Clause Held Unconstitutional ........................................................................... 19
Key Contacts .......................................................................................................................................................................... 21
Intellectual Property Newsletter
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More Trouble Brewing in the Heartland: Foreign Corporation Immunity and Other Issues Arising
from the Supreme Court’s Venue Decision
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.” For over 25 years, since Congress amended the general venue statute and the United
States Court of Appeals for the Federal Circuit issued its decision in VE Holding v. Johnson Gas, 917 F.2d 1574 (1990),
courts have looked to § 1391(c), the “residency” part of the general venue statute, for the definition of the word “resides” to
be used in § 1400(b) venue analyses, and as a result have found venue to be proper for a patent-defendant corporation in
any district where the corporation is subject to personal jurisdiction. But in May of this year, the Supreme Court overruled
VE Holding and held that the definition in § 1391 is not applicable to § 1400(b).
1
Thus, the Supreme Court returned patent
venue jurisprudence to its previous state, as set by Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (1957), in
which the Supreme Court held that, as used in § 1400(b), a domestic corporat ion “resides” only in its state of incorporation,
as understood in the 19th century, and thus can be sued for patent infringement only in the state of its incorporation or in a
state where it both has allegedly infringed and has an established place of business.
While TC Heartland was ostensibly about moving the litigation from the improper venue of Delaware to TC Heartland’s
home court of Indiana, this case was so eagerly awaited primarily because it might serve to limit the amount of patent
litigation that may permissibly be filed in the United States District Court for the Eastern District of Texas (the “EDTX”), the
current situs of 43% of all U.S. patent litigation. Of course, given that more than half of publicly traded U.S. companies a re
incorporated in Delaware, due in part to its pro-business state laws, this Supreme Court ruling might simply move the logjam
to another court that some consider to be fairly pro-patent.
The Court did leave some doubt about the reach of its holding. Left unanswered by TC Heartland is what effect the ruling
will have on a patentee’s ability to sue foreign corporations for infringement. The Court, in a footnote, noted but did not
opine on this issue. The Court further noted that it was not, at this time, opining on its decades-old ruling in Brunette
Machine Works, Ltd. v. Kockum Indus., Inc., 406 U.S. 706 (1972), in which the Court held that—given personal jurisdiction
over the defendant—a foreign patent infringer may be sued anywhere.
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The logic of the earlier Brunette case is now in some doubt. The Brunette court held that venue in patent infringement
actions against alien corporations is not governed by the patent venue statute, because of “the longstanding rule that suits
against alien defendants are outside [venue] statutes.”
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However, to support this holding, the Court pointed to the then-
current portion of the general venue statute governing venue of actions against aliens—at the time, § 1391(d)—which
provided that “[a]n alien may be sued in any district.” However, in 2011, Congress revised the venue statute, moving the
rule governing alien defendants from § 1391(d) into the “residency” section of § 1391, at § 1391(c)(3), and rewording it to
refer to “defendants not resident in the United States.” This presents a problem, because § 1391(c)(2) makes corporate
residency co-extensive with personal jurisdiction, and if that definition applies in section (c)(3), then section (c)(3) provides
1
TC Heartland, LLC v. Kraft Foods Grp. Brands LLC, No. 16-341 slip op. at 1 (2017).
2
TC Heartland, No. 16-341 slip op. at 7 n.2.
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