The patent venue statute, 28 U.S.C. §1400(b), limits proper venue to “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.”
In TC Heartland LLC v. Kraft Foods Grp. Brands LLC, the U.S. Supreme Court held that “for purposes of §1400(b) a domestic corporation ‘resides’ only in its State of incorporation.”
Following TC Heartland, district courts had different interpretations “about whether a corporation ‘resides’ under §1400(b) in every judicial district within its state of incorporation when the state has more than one judicial district.”
The Federal Circuit held in In re BigCommerce, Inc. that “for purposes of determining venue under §1400(b) in a state having multiple judicial districts, a corporate defendant shall be considered to ‘reside’ only in the single judicial district within that state where it maintains a principal place of business, or, failing that, the judicial district in which its registered office is located.”
These cases created situations were lawsuits involving the same patents and related parties could no longer be transferred to one district court for judicial economy.
Examples of Joint Claim Construction
Since In re BigCommerce, there have been three examples of multiple district courts within a single state holding joint claim construction hearings because transferring the case was not an option under Section 1400(b).
- Chief Judge Barbara M. Lynn (Northern District of Texas) and Chief Judge Rodney Gilstrap (Eastern Districts of Texas) held the first joint Markman hearing in September 2018. SEVEN Networks LLC filed both lawsuits asserting the same patent. See SEVEN Networks LLC v. ZTE (USA) Inc. (N.D. Texas) and SEVEN Networks LLC v. Google LLC (E.D. Texas).
- Judge Curtis Lynn Collier (Eastern District of Tennessee) and Judge Jon Phipps McCalla (sitting by designation in the Middle District of Tennessee) had joint scheduling and joint claim construction for two related cases in June 2019. Plate LLC filed both lawsuits asserting the same patents. See Plate, LLC v. Elite Tactical Systems LLC (E.D. Tenn.) and Plate LLC v. RCTenn LLC (M.D. Tenn.) Collier and McCalla wrote a joint order explaining that they would hold a concurrent Markman hearing in the “interest of judicial efficiency and to reduce the risk of inconsistent or conflicting construction.”
- Most recently, Lynn and Gilstrap held another joint claim construction hearing in September 2019. See Infernal Technology LLC v. Activision Blizzard Inc. (N.D. Texas) and Infernal Technology, LLC et al v. Microsoft Corp. (E.D. Texas).
Benefits to Litigants
Joint claim construction can benefit the parties by reducing the cost of litigation, increasing the chance of arguing before a judge experienced with patents, and reducing the time to a decision on the merits.
Consolidating cases can save time and money compared to litigating each case separately. Joint claim construction provides the same benefits when consolidation is not possible. This allows motions, responses, and claim construction briefing to be handled at one time.
For different defendants litigating against the same plaintiff and patent, joint claim construction allows for a joint defense group that can defray costs.
Joint Markman hearings allow judges to work together on claim construction issues. Litigants can use this to their advantage if they are concerned that one judge has less experience with claim construction. The more experienced judge can guide the second judge. And having a second set of eyes on the decision can help reduce mistakes.
It is too soon to see how well joint claim construction orders hold up on appeal, but there is reason to think they may be less prone to reversal.
Joint claim construction also can prevent a prolonged stay in the later-filed case. If a judge knows that another judge in a similar, previously filed case will construe the same claim terms, there is little incentive to move the second case forward.
A joint Markman hearing can avoid a stay in the second filed case that would delay the critical phase of claim construction. Even if trials are staggered after claim construction, parties usually rely on the constructions for settlement positions and negotiations.
An attorney can capitalize on these benefits by asking for a joint scheduling order through claim construction. The above cases can help persuade judges a joint Markman hearing would improve judicial efficiency by streamlining complex patent cases.
Originally published by Bloomberg Law
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