United States: Supreme Court Clarifies Venue In Patent Cases

In TC Heartland LLC v. Kraft Foods Group Brands LLC, the Supreme Court limited venue in patent suits against domestic corporations to: (1) the corporation's state of incorporation or (2) a location where the corporation both committed infringing acts and has a regular and established place of business.

The Supreme Court's holding abrogated a series of Federal Circuit decisions which allowed for venue in patent cases wherever a corporate defendant was subject to personal jurisdiction. This included any district in which the corporation purposely shipped an accused product through an established distribution channel. See VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990); Beverly Hills Fan Co v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994). The Court declined to decide how, if at all, the decision would apply to unincorporated entities or alien corporations. Justice Thomas wrote the opinion, which all Justices joined, except Justice Gorsuch, who took no part in the decision of the case.

At issue in the case was the meaning of the word "resides" in the patent venue statute (28 U.S.C. § 1400(b)). The Court held that a domestic corporation "resides" only in that corporation's state of incorporation. The Court considered the lengthy history of the patent venue statute in reaching its conclusion.

In 1942, Congress enacted a statute providing for federal venue generally (28 U.S.C. § 1391) and recodified a patent-specific venue statute (as 28 U.S.C. § 1400(b)). The general venue statute provided for venue in any judicial district where a corporate defendant was doing business and defined such a place as the corporation's residence. The patent venue statute provided for venue only where the corporation "resides" or where the defendant both committed infringing acts and had a regular and established place of business. The patent venue statute did not define the word "resides." This left open the question of how the term should be construed, including whether the definition of residence in the general venue statute should define the term "resides" in the patent venue statute.

In Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 226 (1957), the Court determined that the word "resides" in the patent venue statute is limited to the corporate defendant's state of incorporation only. The Court also concluded that the general venue statute does not supplement the patent venue statute and that the patent venue statute exclusively governs venue in patent cases.

Fourco controlled the venue inquiry in patent cases until 1990, when the Federal Circuit in VE Holding interpreted the 1988 amendments to § 1391 as abrogating Fourco by broadening patent venue to any district in which the defendant was subject to personal jurisdiction. The Federal Circuit's decision concluded that the addition of the words "[f]or purposes of venue under this chapter" in the 1988 amendments to § 1391 required § 1391 to supplement § 1400 because both statutes are in the same chapter.

In 2011, Congress again amended the general venue statute. This time Congress stated that the general venue statute shall provide for venue "except as otherwise provided by law." 28 U.S.C. § 1391(a). Congress also amended the definition of residence in the general venue statute to state that it shall define residence "for all venue purposes" (removing the "[f]or purposes of venue under this chapter" language that was added in the 1988 amendment, upon which the Federal Circuit relied heavily on in VE Holding). 28 U.S.C. § 1391(c).

In this case, the Supreme Court recognized the history discussed above, and heavily relied on Fourco for its conclusion. The Court reasoned that Congress never intended to change the definition of residence in the patent venue statute that the Court announced in Fourco. The Court first reasoned that if Congress had intended to overrule Fourco it would have amended the patent venue statute itself, but Congress has not done so.

Second, the Court reasoned that if Congress intended to change the patent venue statute by amending the general venue statute, it would provide "a relatively clear indication of its intent in the text of the amended provision." The Court did not find a clear intent to overrule Fourco in the amendments to the general venue statute. Focusing on the 2011 amendments, the Court reasoned that the language "for all venue purposes" was not added to overrule Fourco. At the time Fourco was decided, the general venue statute recited "for venue purposes," yet the Court still concluded that the general venue statute did not modify the patent venue statute. The Court found no material difference between the phrasings "for venue purposes" at the time of Fourco and "for all venue purposes" in the 2011 amendments.

The Court also noted that the current general venue statute was less likely to modify patent venue statute than the version at issue in Fourco because the general venue statute now states that it does not govern if venue is "otherwise provided by law." The Court therefore concluded that Congress intended no change to Fouro and "[a]s applied to domestic corporations, "reside[nce]" in § 1400(b) refers only to the State of incorporation."

The full impact of the Court's decision remains to be seen. Although the decision clearly limits the residence of a domestic corporation in patent cases to the state of incorporation, the decision does not address other venue questions such as: (i) the scope of the remainder of § 1400(b), which allows for venue in patent cases "where the defendant has committed acts of infringement and has a regular and established place of business[;] (ii) where an unincorporated entity "resides" for purposes of § 1400(b); or (iii) where an alien corporation "resides" for purposes of § 1400(b). Much litigation is likely to ensue over these questions.

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.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions