United States: Patent Venue At The Supreme Court Update: TC Heartland's Petition For Certiorari Granted

In the November 2016 issue of our Intellectual Property newsletter we published a commentary on TC Heartland's petition for certiorari, in which we suggested that TC Heartland raised enough interesting issues for the Supreme Court to grant certiorari. On December 14, 2016, the Supreme Court did grant TC Heartland's petition on the following issue: Whether the patent venue statute, 28 U.S.C. § 1400(b), which provides that patent infringement actions "may be brought in the judicial district where the defendant resides," is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by the statute governing "[v]enue generally," 28 U.S.C. § 1391, which has long contained a subsection (c) that, where applicable, deems a corporate entity to reside in multiple judicial districts.

On January 30, 2017, TC Heartland submitted its opening merits brief.

Two sections of its brief, "Effects of the Federal Circuit's New Reinterpretation of the Patent Venue Statute" and "The Federal Circuit's Reinterpretation of § 1400(b) Has Brought Back the Very 'Abuses' That Congress Sought to Avoid," are particularly striking from a policy perspective.1

First, TC Heartland explains, through statistical studies, the dramatic concentration of patent infringement litigation in a select few district courts of the United States. TC Heartland explains that, in 2015, "more than 40% of all patent cases were brought in [the United States District Court for the Eastern District of Texas ("E.D. Tex.")], and more than 50% of patent cases were filed in just two districts (E.D. Tex. and D. Del.), as illustrated in the chart below (Brian Howard, Lex Machina 2015 End-of-Year Trends Fig. 3 (Jan. 7, 2016), available at http://www.lexmachina.com/lex-machina-2015-end-of-yeartrends): 2

TC Heartland further asserts that statistical studies show that these district courts are "simply better for patent plaintiffs and worse for patent defendants,"3 based on three variables: "[i] shorter time-to-trial, [ii] higher success rates, and [iii] greater median damages awards."4

Second, quoting several amici, comprised of global business leaders and renowned academics, TC Heartland denounces the Federal Circuit's "revisionist interpretation of § 1400(b)," which it claims has:5

  • Resulted in "rampant and unseemly forum shopping" that "hampers innovation, generates erroneous results, and undermines respect for the rule of law." Brief of Amici Dell Inc. and the Software & Information Industry Association at 3, 6.
  • "[L]ed to pervasive forum shopping" that "has fundamentally altered the landscape of patent litigation in ways detrimental to the patent system as a whole." Brief of Amici 32 Internet Companies, Retailers, and Associations at 3, 17 (citation omitted).
  • Produced "a massive imbalance in the distribution of patent suits in the United States" that undermines "core purposes underlying our patent laws." Brief of Amici American Bankers Association, the Clearing House Payments Company L.L.C., Financial Services Roundtable and Consumer Bankers Association at 8–9.
  • Engendered abusive "forum shopping [of] the very sort" that "Congress sought to guard against when it adopted legislation limiting venue in patent litigation." Brief of Amicus Washington Legal Foundation at 14.
  • Generated a "venue free-for-all" that "especially harms small companies and American consumers" and that "may be drawing courts into competition to attract patent owners—the ones with unilateral choice over the forum—by adopting practices and procedures favorable to patent owners." Brief of Amici the Electronic Frontier Foundation and Public Knowledge at 3, 21.
  • "[F]undamentally shaped the landscape of patent litigation in ways that harm the patent system, by enabling extensive forum shopping and forum selling." Brief of Amici 56 Professors of Law and Economics at 12.
  • "[C]reated numerous practical negative consequences" including "concentration of most patent litigation [in] a select few district courts, which is bad for positive development of patent law." Brief of Amicus Paul R. Michel (retired Chief Judge of the Federal Circuit) at 1.

Oral argument is scheduled for March 27, 2017.


1 Brief for Petitioner at 14–16, 37–39, TC Heartland, LLC v. Kraft Foods Group Brands LLC, (Jan. 30, 2017) (No. 16-341) ("TC Heartland's Opening Br.").

2 TC Heartland's Opening Br. at 15.

3 TC Heartland's Opening Br. at 16 (quoting Matthew Sag, IP Litigation in U.S. District Courts: 1999-2014, 101 IOWA L. REV. 1065, 1099 (2016)).

4 TC Heartland Opening Br. at 16 (quoting Chris Barry et al., 2016 Patent Litigation Study: Are We at an Inflection Point? 15 (2016), available at https://www.pwc.com/us/en/forensic-services/publications/assets/2016-pwc-patent-litigation-study.pdf).

5 TC Heartland Opening Br. at 37–38.

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