In the few months since the U.S. Supreme Court issued its decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, a patent case being fought out between a pair of supercomputer firms is proving to be a litmus test of the recent SCOTUS ruling. On June 29th, Judge Rodney Gilstrap issued a memorandum order and opinion in Raytheon Company v. Cray, Inc., a patent infringement case filed in the Eastern District of Texas, which denied a motion by defendant Cray to transfer venue in the case. Gilstrap’s order confirmed a four-factor test for determining if a non-resident defendant maintains a regular and established place of business for purposes of 28 U.S.C. § 1400(b).
Judge Gilstrap’s decision has not been a popular one in Washington, D.C. Rep. Darrell Issa (R-CA), the chairman of the House IP Subcommittee and an inventor who fits his own description of the term “patent troll,” called Gilstrap’s order “reprehensible” in a July 13th hearing. That statement prompted the American Board of Trial Advocates (ABOTA) to issue a press release reprimanding Issa for using his political position to put pressure on a federal judge.
On July 17th, Cray filed a petition for writ of mandamus in the case, seeking to appeal the case to the U.S. Court of Appeals for the Federal Circuit in order to have the case transferred to the Western District of Wisconsin. The Cray mandamus is asking the Federal Circuit to decide two issues: did the Eastern Texas court err in holding that a “regular and established place of business” need not be a physical presence; and did the district court err in determining that the residence of a single work-from-home employee constitutes a “regular and established place of business” of his employer.
A news report issued by Reuters on August 3rd indicates that Raytheon filed a brief to the Federal Circuit asking the court to decline to hear the case, arguing that the presence of telecommuting employees in Eastern Texas gives that venue jurisdiction in the case. Raytheon is also getting support for its argument from some big players in the tech space. European telecommunications firms Ericsson (NASDAQ:ERIC) and Nokia (NYSE:NOK) filed a brief with the Federal Circuit encouraging the court to decline the Cray mandamus. According to Law360, the firms argue that Judge Gilstrap’s model is easier to enforce and more comprehensive than a proposed alternative.