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TC Heartland's Impact In 2018
By Alex Chachkes and Josh Montgomery
(December 12, 2018, 2:23 PM EST)
The U.S. Supreme Court decided TC Heartland LLC v. Kraft Foods Group Brands
LLC on May 22, 2017, revitalizing the patent venue statute.[1] This article reviews
the impact of TC Heartland over the past year and a half.
Background
28 U.S.C. § 1400(b) provides that “[a]ny civil action for patent infringement may be
brought in the juridical district (1) where the defendant resides, or (2) where the
defendant has committed acts of infringement and has a regular and established
place of business.”[2] The Federal Circuit essentially obviated that statute in its
1990 decision VE Holding.[3] In VE Holding, the Federal Circuit found that, for the
purposes of Section 1400(b), a defendant “resides” anywhere it is subject to
personal jurisdiction. This effectively obviated this patent-case specific venue
statute, as option one swallowed option two, now that the personal jurisdiction
analysis would resolve the venue analysis. Twenty-seven years later, in May 2017,
the Supreme Court, in TC Heartland, resurrected this statute by overturning VE
Holding. “As applied to domestic corporations, ‘reside[nce]’ in § 1400(b) refers
only to the State of incorporation.”[4] All eyes have turned to option two, and
what it meant for a company to have “a regular and established place of business”
in a venue.
Federal Circuit
The Federal Circuit has directly addressed Section 1400(b) three times since the TC
Heartland decision. First, in September 2017, the Federal Circuit decided In re Cray, stating the obvious
that the “regular and established place of business” must be a physical place and “of the defendant.”[5]
The Cray court also fleshed out what would qualify as “a regular and established place of business,”
providing examples while emphasizing the fact-dependent nature of the inquiry.[6] Second, in May
2018, in In re BigCommerce Inc., the Federal Circuit found that “a corporate defendant shall be
considered to ‘reside’ only in the single judicial district within that state where it maintains a principal
place of business, or, failing that, the judicial district in which its registered office is located.”[7] Third,
also in May 2018, in In re ZTE, the Federal Circuit held that “the Plaintiff bears the burden of establishing
proper venue.”[8] Collectively, these Federal Circuit decisions raised the venue bar even higher for
patentee-plaintiffs.
Alex Chachkes
Josh Montgomery
