The Supreme Court has rejected a Federal Circuit rule that effectively allowed a patent owner to file suit anywhere a defendant does business. In an 8-0 decision, the Court held that a domestic corporation "'resides' only in its state of incorporation for purposes of the patent venue statute [28 U.S.C. § 1400(b)]." TC Heartland LLC v. Kraft Foods Grp Brands LLC, 581 U.S. __, 2 (2017). The Court reversed the Federal Circuit's prior holding that if a district court exercised personal jurisdiction over a petitioner under § 1391(c), then the petitioner "resided" in that district under §1400(b). Id. at 3. Many cases will likely be transferred out of the patent-friendly Eastern District of Texas based on the foregoing.
TC Heartland also can have important implications specifically for life sciences cases. For example, in the Hatch-Waxman context, we may see an uptick in protective suits and/or cases filed in a generic company's state of incorporation. Similar trends may also be observed in the future with respect to biosimilar cases. Overall, a larger portion of patent cases may shift to Delaware, where many companies are incorporated.
Going forward, patent owners will not be able to forum shop solely on the basis that the alleged infringer does business in a district and should formulate case filing strategy accordingly.
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