In one of the first decisions to apply the Supreme Court's recent ruling on proper venue in patent litigation, a federal district court in Stuebing Automatic Machine Co. v. Gravonsky granted a defendant's motion to transfer a patent dispute from the Southern District of Ohio to the Southern District of Texas.
The Supreme Court's recent decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, published on May 22, 2017, held that 28 U.S.C. § 1400(b) provides the exclusive standard for venue in patent litigation, and that as a result venue in patent cases is only proper "in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business." TC Heartland is widely viewed as severely limiting forum shopping in patent cases. (Arnold & Porter Kaye Scholer provided an analysis of TC Heartland in its June 1, 2017, Advisory.)
Applying TC Heartland, the court in Stuebing first held that the defendants did not reside in the judicial district (the Western Division of the Southern District of Ohio), notwithstanding that one defendant owned a vacant piece of land there. The court reasoned that both defendants primarily kept homes in Texas, and that in any event the vacant piece of land owned by one defendant could only even potentially establish that defendant's residency in the Western Division.
The case for venue in the Western Division did not fare any better under the second prong of § 1400(b). First, the plaintiff only offered unsupported allegations of sales of infringing goods in the Western Division, which the court found insufficient to establish that the defendants had "committed acts of infringement" there. Second, the court found that the defendants operated their business in Texas, and that their only contacts with the Western Division were in the nature of emails to customers and shipping products to customers in the area. Without more—such as a permanent employee based in the judicial district—the court ruled that the defendants did not have a "regular and established place of business" in the Western Division.
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