The Supreme Court has agreed to hear an appeal that could change the landscape of patent case venue selection across the country. The appeal of TC Heartland, LLC v. Kraft Food Group Brands LLC, questions whether patent infringement cases must be brought in the district in which the alleged infringer is incorporated or whether cases may continue to be brought in districts in which an accused product was purchased or sold.
Under 28 U.S.C. § 1400(b), patent infringement actions “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.” While § 1400(b) does not offer a definition of “reside,” 28 U.S.C. § 1391(c)(2) states that an entity “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.”
Federal Circuit precedent has applied an interpretation of § 1391(c)(2)’s definition of “reside” that allows lawsuits against an allegedly infringing company in any district where the accused products are being purchased, whether in a store or online.
In the case of TC Heartland, Kraft brought suit against TC Heartland in Delaware because a portion of the accused products had been shipped to Delaware (2% of total sales). TC Heartland, however, maintains its headquarters in Indiana with no offices in Delaware.
The appeal in question will allow the Supreme Court to decide whether 28 U.S.C. § 1400(b) alone governs venue selection in patent infringement actions, or if it must be supplemented by 28 U.S.C. § 1391(c). Without supplementation of § 1391(c), the definition of “resides” would narrow venue to only the district of incorporation.
The Supreme Court's decision could significantly reduce the number of patent cases filed in the Eastern District of Texas, which hosts the highest volume docket of patent cases in the country.