The United States Supreme Court today has put tighter restrictions on where patent owners can file patent infringement lawsuits (TC Heartland LLC v. Kraft Food Brands Group LLC, case number 16-341, in the Supreme Court of the United States (2017)).
The federal law governing patent venue states that a patent lawsuit may be filed where the defendant “resides” or has a regular and established place of business. For nearly 30 years, that rule has effectively been interpreted to allow a patent holder to file suit anywhere a defendant makes sales. In today’s opinion, the Supreme Court reinstated a more restrictive standard for an earlier 1957 Supreme Court case (Fourco Glass Co. v. Transmirra Products Corp.), holding that a domestic corporation “resides” only in its state of incorporation for purposes of the patent venue statute. Today’s ruling favors defendants in patent litigation, limiting the places where they may be sued, and is an effort by the Supreme Court to prevent forum selection by so-called patent trolls. Prior to today’s decision, an effect of the broader interpretation of the patent venue rule has been a plague of forum shopping and a concentration of cases in a few patent friendly jurisdictions, such as the Eastern District of Texas. Today’s decision is an attempt to reduce or prevent such forum shopping. However, defendants will still be subject to suit in their state of incorporation, meaning that a defendant may still be subject to patent litigation in the state of Delaware if they are a Delaware corporation.
This may not the last word on patent venue. In February of this year, Sen. Orrin Hatch, R-Utah, said that regardless of whether the Supreme Court ruled in favor of TC Heartland, legislation from Congress would likely be needed to prevent future forum shopping.
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