Last year in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (May 22, 2017), the Supreme Court dramatically changed the venue landscape for patent cases. Prior to TC Heartland, venue in patent cases was proper in any federal court with personal jurisdiction over the defendant. After TC Heartland, however, venue for cases against domestic parties is proper only in: (1) the district “where the defendant resides” which, in the case of corporate defendants, was held to be the corporation’s state of incorporation; or (2) a district where the defendant “has committed acts of infringement and has a regular and established place of business.” As a result of this change, which significantly limited the number of districts where a corporation “resides,” focus has moved to interpreting the remainder of the patent venue statute (28 U.S.C. §1400(b)). This article attempts to identify some of the issues that have arisen since and as a result of the TC Heartland decision.
Background
Venue for patent cases is governed by 28 U.S.C. § 1400(b), which provides that a patent infringement action may brought either “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.” Prior to TC Heartland, a defendant was said to “reside” in any district with personal jurisdiction over the defendant. Following TC Heartland, however, a domestic corporate defendant is now said to “reside” only in its state of incorporation, thus significantly narrowing the number of jurisdictions where a domestic corporation can be sued for patent infringement. With this narrowing of the interpretation of “resides,” renewed attention has been placed on the alternative criteria for venue under Section 1400(b)—those districts where a defendant has both a “regular and established place of business” and “has committed acts of infringement.” Against this backdrop, the courts have been required to address a number of long dormant questions surrounding patent venue determinations.
The Question of Waiver
One of the first questions to arise in the wake of TC Heartland was what to do about the cases that had been filed in (now improper) venues pre-TC Heartland. Had defendants in those cases waived their right to challenge venue by failing to move to dismiss under Rule 12(b)(3) months or even years before the Supreme Court decided TC Heartland? The majority of district courts initially concluded that no waiver had taken place because of Fed. R. Civ. P. 12(g)(2), which provides that a defendant must raise all “defense[s] or objection[s] that w[ere] available to the party” at the time it makes its first defensive move (i.e., an Answer or Rule 12 motion). In the view of those courts, the improper venue defense was not “available” prior to TC Heartland because the Supreme Court announced new venue law, thus making the waiver under Rule 12(g)(2) inapplicable. But several district courts, including both the Eastern District of Texas and the District of Delaware, reached the opposite conclusion and held that, as TC Heartland merely reaffirmed pre-existing venue law (including the Supreme Court’s 1957 decision in Fourco Glass Co. v. Transmirra Products), the improper venue defense always had been “available,” even prior to TC Heartland.
The waiver question ultimately reached the Federal Circuit in In re Micron Technology, Inc., 875 F.3d 1091 (Fed. Cir. Nov. 15, 2017). In that case, the defendant Micron had been sued in the District of Massachusetts and begun litigating the merits of its case prior to TC Heartland’s issuance. When Micron later moved to dismiss for improper venue in the wake of TC Heartland, the district court found that Micron had waived the defense by failing to make it in an initial Rule 12 motion and that, because TC Heartland merely reaffirmed the Supreme Court’s prior ruling in Fourco, the defense had been “available” to Micron under Rule 12(g)(2) all along. Micron subsequently petitioned the Federal Circuit for a writ of mandamus.
On November 15, 2017 the Federal Circuit granted Micron’s petition, holding that “TC Heartland changed the controlling law in the relevant sense . . . the venue defense now raised by Micron (and others) based on TC Heartland’s interpretation of the venue statute was not ‘available,’ thus making the waiver rule of Rule 12(g)(2) and (h)(1)(A) inapplicable.” Although the Federal Circuit thus resolved the issue of Rule 12 waiver, it left the door open to two additional types of waiver deriving from district courts’ “inherent power” to manage their dockets. The first would turn on a case’s proximity to trial, allowing a district court to continue to find waiver where a case had progressed to the eve of trial. The second would look to whether the defendant had engaged in a “tactical wait-and-see bypassing of an opportunity to declare a desire for a different forum, where the course of proceedings might well have been altered by such a declaration.” But beyond these broad pronouncements, the Federal Circuit declined to explain further how and when these categories of waiver might apply. On remand from the Federal Circuit, Micron’s case was transferred to Delaware and later settled without further analysis of the venue issues.
The Meaning of Section 1400(b)’s “Regular and Established Place of Business” Standard
Unsurprisingly, another question that arose immediately after TC Heartland issued was how to define 28 U.S.C. § 1400(b)’s requirement of a “regular and established place of business.” Because the definition of “resides” was previously construed broadly, courts had little reason to construe the “regular and established place of...
