TC Heartland, LLC v. Kraft Foods Group Brands LLC (No. 16-341)
Earlier today, the Supreme Court granted certiorari to determine "[w]hether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not be supplemented by 28 U.S.C. § 1391(c)."
In 1957, the Supreme Court held that "28 U.S.C. § 1400(b) is the sole and exclusive provision controlling venue in patent infringement actions, and that it is not to be supplemented by the provisions of 28 U.S.C. § 1391 (c)" and that the phrase "where the defendant resides" in Section 1400(b) means the state of incorporation only. Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 226, 229 (1957). In 1990, two years after Congress had amended Section 1391(c), the Federal Circuit held that those amendments made Section 1391(c) applicable to Section 1400(b) and therefore defendants in patent litigation could be sued in "any district where there would be personal jurisdiction over the corporate defendant." VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1583 (Fed. Cir. 1990).
Congress further amended Section 1391(c) in 2011. Recently, TC Heartland argued to the Federal Circuit, on a writ of mandamus, that those amendments rendered VE Holding inapplicable such that Fourco again controls the interpretation of Section 1400(b). The Federal Circuit disagreed, calling the 2011 amendments "minor."
Reversal of VE Holding could shift the focus of patent litigation away from popular districts like the Eastern District of Texas to districts where more companies are actually incorporated or have a significant physical presence, depending on how the Supreme Court rules in this case.