US Supreme Court on Patent venue

TC Heartland LLC v. Kraft Foods Group Brands LLC

Petitioner company was organized under Indiana law and headquartered in Indiana whereas Respondent company was organized under Delaware law and had its principal place of business in Illinois. Respondent sued petitioner in the District Court for the District of Delaware, alleging that petitioner’s products infringed one of respondent’s patents. Although petitioner was not registered to conduct business in Delaware and had no meaningful local presence there, it did ship the allegedly infringing products into the State.

The question before the Supreme Court was where proper venue lied for a patent infringement lawsuit brought against a domestic corporation. The patent venue statute, 28 U. S. C. §1400(b), provide that “any civil action for patent infringement may be brought 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.” In Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222 (1957), the Supreme Court concluded that for purposes of §1400(b) a domestic corporation “resides” only in its State of incorporation. In reaching that conclusion, the Court rejected the argument that §1400(b) incorporated the broader definition of corporate “residence” contained in the general venue statute, 28 U. S. C. §1391(c).

The Supreme Court observed that Congress had not amended §1400(b) since Fourco case, but it had amended §1391 twice. Section 1391 presently provided that, “except as otherwise provided by law” and “for all venue purposes,” a corporation “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 issue in the present case was whether that definition supplanted the definition announced in Fourco and allowed a plaintiff to bring a patent infringement lawsuit against a corporation in any district in which the corporation is subject to personal jurisdiction.

The Supreme Court after discussing the legislative history came to the conclusion that the current version of §1391 did not contain any indication that Congress intended to alter the meaning of §1400(b) as interpreted in Fourco. Although the current version of §1391(c) provided a default rule that applies for all venue purposes, the version at issue in Fourcosimilarly provided a default rule that applied “for venue purposes.” Thus the Fourco ruling remained good law and hence as applied to domestic corporations, “residence” in §1400(b) referred only to the State of incorporation. Thus the judgment of the Court of Appeals was reversed and the case remanded for further proceedings consistent with the opinion.