Takeaway: Supreme Court will decide whether the patent venue statute, 28 U.S.C. § 1400(b), which states that patent infringement cases are to be brought in the judicial district where the defendant “resides,” is supplemented by the general venue statute, 28 U.S.C. §1391, which deems that a corporate entity may reside in multiple judicial districts.
On December 14, 2016, the Supreme Court agreed to review the Federal Circuit decision,In re TC Heartland, LLC, Fed. Cir. No. 2016-105, 4/29/2016. The Federal Circuit decision came as a mandamus petition to overcome a district court denial for change of venue based on a previous Federal Circuit decision, VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990).
28 U.S.C. § 1400(b) has long stood for the proposition that patent infringement may be brought in the judicial district “where the defendant resides” or where it has committed acts of infringement, or has a regular place of business. The Supreme Court held inFourco Glass Co. v. Transmirra Prods., 353 U.S. 222 (1957), that Section 1400(b) is not supplemented by the general venue provision at 1391(c), which defines “resides” for venue determinations for corporate defendants as any place a court has personal jurisdiction over the corporate defendant.
The Federal Circuit distinguished VE Holdings from Fourco. 28 U.S.C. § 1391(c) states that: “For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction.” By the plain language of the statute, a corporation that makes any sales in East Texas is then deemed to reside there, which was the basic analysis of VE Holdings. This holding has allowed patent trolls to easily establish venue in the Eastern District of Texas.
However, typically, when the Supreme Court agrees to hear a patent case, it is very likely that it is because the Supreme Court disagrees with the Federal Circuit, meaning that once the Supreme Court decides on In re TC Heartland, it is highly possible that the Eastern District of Texas will no longer be the patent troll mecca.
