Supreme Court Reverses Federal Circuit on Venue for Patent Infringement Suits

TC Heartland LLC v. Kraft Foods Grp. Brands LLC, except GORSUCH, J., who took no part in the consideration or decision of the case.)

Venue for patent infringement cases are governed by 28 U.S.C. § 1400(b), which states that patent infringement suits can be brought in the district where the defendant “resides” or where the defendant has committed acts of infringement and has a regular and established place of business. In Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), the Supreme Court held that for purposes of § 1400(b), a domestic corporation “resides” only in the state of its incorporation.

In this case, Kraft sued TC Heartland in the District of Delaware, alleging that TC’s products infringed one of its patents. TC is organized under Indiana law and is headquartered in Indiana. Kraft is organized in Delaware and has its principal place of business in Illinois. TC moved to dismiss or transfer the case to the Southern District of Indiana, arguing that venue was improper in Delaware under § 1400(b), because it is not registered to do business in Delaware and has no meaningful presence there. The District Court rejected these arguments and the Federal Circuit denied a petition for a writ of mandamus. The Federal Circuit concluded that relatively recent amendments to the general venue statute, 28 U.S.C. § 1391(c), which provides that a defendant resides in any district where it is subject to personal jurisdiction, were applicable to the specific venue provisions of § 1400(b) for patent suits. The Supreme Court granted certiorari and reversed.

The question in this case is whether the general venue provision in § 1391(c), as amended, supplants the Court’s decision in Fourco, and thereby allows a plaintiff to bring a patent suit against a domestic corporation in any district in which the corporation is subject to personal jurisdiction. The Supreme Court concluded “no,” and held that for patent infringement, a domestic corporation resides only in the state of its incorporation.

The Court reviewed the history of both the general venue provision in § 1391(c) and the patent venue provision in § 1400(b). The Court noted that patent cases have been placed “in a class by themselves, outside the scope of general venue legislation” since 1897, when the first patent-specific venue statute was enacted. Since then, the Court has repeatedly rejected, in cases like Fourco, any attempt to incorporate the definition of “resides” in § 1391(c) into the definition of “resides” in § 1400(b), noting that § 1400(b) “is the sole and exclusive provision controlling venue in patent infringement actions, and . . . is not to be supplemented by . . . § 1391(c).”

Nevertheless, Kraft argued that amendments to § 1391(c) in 1988 and 2011 superseded the Court’s decision in Fourco, and allow plaintiffs to sue a defendant for patent infringement in any district where the defendant is subject to personal jurisdiction. This has been the practice for decades, under Federal Circuit precedent. The Supreme Court disagreed, noting that Congress has not amended § 1400(b) since its enactment and did not provide any clear indication that it intended to change the meaning of § 1400(b) when it amended § 1391(c). Kraft’s argument was weakened by the fact that the text of the amended § 1391(c) includes a savings clause, which expressly states that it applies, except when “otherwise provided by law,” such as in a specific venue statute.  The Court found nothing in the text of § 1391(c) or § 1440(b) to suggest that the definition of “resides” in the amended § 1391(c) applies to § 1440(b) for patent infringement cases. Thus, as applied to domestic corporations in a patent infringement suit, the Court held that “resides” refers only to the state of incorporation. The Court expressly declined to consider the impact of its holding, if any, on foreign corporations.

A domestic defendant in a patent infringement case can only be sued in a district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business. A domestic defendant in a patent case “resides” only in its state of incorporation. Thus, personal jurisdiction over the defendant is insufficient, by itself, to establish proper venue in a patent infringement case.

[Troutman-Ad]

[Troutman-About]