United States: Supreme Court Cracks Down On Forum Shopping In Patent Lawsuits

Last Updated: June 6 2017
Article by Michael S. Golenson

In a highly-anticipated decision, the U.S. Supreme Court unanimously decided to crack down on forum shopping in patent infringement lawsuits by limiting where domestic corporations can be sued.

The federal law governing venue for patent infringement lawsuits allows lawsuits to be brought in the judicial district where either (1) the defendant resides or (2) the defendant has committed acts of infringement and has a regular and established place of business. 28 U.S.C. § 1400(b). In TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. ____ (2017), the Supreme Court overturned nearly thirty years of Federal Circuit precedent by reaffirming its own prior holding in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 226 (1957) that, under the patent venue statue, a domestic corporation "resides" only in the state where it is incorporated.

The definition of "resides" set forth in TC Heartland is drastically more limiting than the interpretation that had previously been applied by federal courts. Prior to TC Heartland, courts applied the Federal Circuit's interpretation of the patent venue statute set forth in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (1990). In VE Holding, the Federal Circuit considered the interplay between the general venue statute, 28 U.S.C. §1391(c)—which had been amended in 1988—and the patent venue statute, 28 U.S.C. §1400(b), and determined that the definition of "residence" in the general venue statute applied equally to the term "resides" in the patent venue statute. Id. at 1580. The general venue statute broadly defines residence to include "any judicial district in which such defendant is subject to the court's personal jurisdiction . . . ." 28 U.S.C. §1391(c)(2). Accordingly, prior to TC Heartland, the term "resides" in the patent venue statute was broadly interpreted to include any judicial district where the defendant was subject to personal jurisdiction—which, in practice, allowed a defendant to be sued in any jurisdiction where the defendant conducted business, including any jurisdiction where the defendant shipped products.

In the modern age of e-commerce, the broad interpretation of patent venue under VE Holding allowed most defendants to be sued in almost any jurisdiction. This encouraged patent owners to shop for the most favorable forum to bring their lawsuit and led to the proliferation of patent litigation in the Eastern District of Texas, despite the fact that most defendants who had been sued in the Eastern District were not incorporated in Texas and did not have regular and established places of business in that district.

The facts of TC Heartland present a typical forum shopping scenario. Kraft Foods filed a patent infringement lawsuit against TC Heartland in the U.S. District Court for the District of Delaware. TC Heartland allegedly shipped infringing products into Delaware, but is organized under the laws of Indiana and is headquartered in Indiana. TC Heartland argued that venue in Delaware was improper and sought to dismiss the case or transfer venue to Indiana. TC Heartland relied on the Supreme Court's Fourco decision in arguing that, within the context of the patent venue statute, it did not "reside" in Delaware because it was not incorporated in the state.1 The district

court denied TC Heartland's venue challenge on the basis of VE Holding and its progeny. TC Heartland petitioned the Federal Circuit for writ of mandamus. In denying TC Heartland's petition, the Federal Circuit ruled that the definition of "resides" set forth in Fourco had been supplanted by subsequent statutory amendments to the general venue statute, with the effect being that the general venue statute provided the definition of "resides" in the patent venue statute.

The Supreme Court analyzed the 2011 statutory amendments to the general venue statute, 28 U.S.C. § 1391, and concluded that those amendments did not have the effect of changing the meaning of "resides" in the patent venue statute that had been set forth in Fourco. The 2011 amendment changed §1391(a) to provide that "[e]xcept as otherwise provided by law . . . this section shall govern the venue of all civil actions brought in district courts of the United States" and also changed §1391(c)(2) to provide that "[f]or all venue purposes . . . an entity . . . whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question."

The Court first noted that "[t]he current version of §1391 does not contain any indication that Congress intended to alter the meaning of §1400(b) as interpreted in Fourco." TC Heartland, 581 U.S. ____, at 8. The Court dismissed the argument that the phrase "for all venue purposes" in the current version of the general venue statute evidences Congress's intent to supplant the definition of "resides" in patent venue statute set forth in Fourco. The Court further noted that "Fourco's holding rests on even firmer footing now" because the current version of §1391 added "a savings clause expressly stating that it does not apply when 'otherwise provided by law.'" Id. at 9.2

Accordingly, in TC Heartland, the Supreme Court held that its interpretation of the patent venue statute as set forth in Fourco remains unchanged and thus, as applied to domestic corporations, the term "'reside[nce]' in §1400(b) refers only to the State of incorporation." Id. at 10.

Takeaways and Practice Notes

This decision creates a major change in patent litigation from what had been standard practice for almost three decades. It is likely to significantly stifle forum shopping and give corporations which are the targets of patent infringement lawsuits more predictability about where they can except to be sued. However, defendants and would-be defendants should take a moment before rejoicing.

First, it should be recognized that this decision is limited to "domestic corporations" which are "incorporated" in a state. The decision does not address how the term "resides" is to be applied to other types of entities which are not "incorporated" (e.g., limited liability companies, partnerships, etc.). Time will tell whether lower courts will strictly interpret this decision to apply only to "domestic corporations" or whether they will extend this decision to other types of legal entities. Furthermore, the Supreme Court explicitly stated that the current decision does not address the question of venue for foreign corporations. Id. at 7-8, n.2.

Second, the current ruling may give corporate defendants which recently have been sued and which have not yet responded to the complaint or which otherwise have preserved their venue objections a basis to seek dismissal for improper venue or a venue transfer if their lawsuit is pending in a jurisdiction other than where they are incorporated or have a regular and established place of business. However, for defendants in a lawsuit that is in an advanced stage or which have waived their objections to venue, a dismissal of the case or venue transfer seems unlikely.

Third, the present decision may curb some patent lawsuits where a plaintiff determines that the burden of complying with the stricter venue requirement outweighs the potential recovery from the lawsuit—such as some nuisance lawsuits brought by patent trolls seeking quick, low-dollar settlements. However, it is unlikely to have a drastic impact on the overall volume of patent lawsuits that will be brought going forward. Instead, most lawsuits (including most patent troll cases) that would have otherwise been filed in a pro-patentee forum under the broader VE Holding interpretation of §1400(b)—such as the Eastern District of Texas—will most likely simply be redistributed to other jurisdictions where proper venue lies. It is expected that the District of Delaware—already one of the most popular venues for patent lawsuits—will see a sharp increase in patent filings, as many defendants are incorporated in Delaware and thus likely will be subject to venue in that district under TC Heartland. Also, the district courts in California—particularly the Northern District of California—also will likely see an increase in patent lawsuits because a large number of technology companies, who are frequent targets for patent lawsuits, have "regular and established place[s] of business" in California. Lastly, it will be interesting to see whether district courts in other states that are popular locations for incorporation—such as Nevada and Wyoming—will receive an influx of patent lawsuits and consequently develop reputations for being popular venues for patent lawsuits.


1 TC Heartland also argued that venue was improper in Delaware because it did not have a "regular and established place of business" in Delaware under the second part of the patent venue statute.
2 The Court also dismissed the argument that the 2011 amendments were intended to ratify the Federal Circuit's decision in VE Holding.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.