On May 22, 2017, the Supreme Court held that a domestic corporation resides only in its State of incorporation for purposes of patent venue under 28 USC 1400(b). This decision will restrict where patent owners may file suit against domestic corporations but leaves open the question of what constitutes "regular and established place of business" for purposes of venue and where may a foreign corporation be sued.
Kraft Foods, a Delaware corporation with principal place of business in IL sued TC Heartland in Delaware district. TC Heartland, an IN corporation headquartered in IN, was not registered to do business in DE and had no meaningful presence in the state although TC Heartland shipped the allegedly infringing products into DE. TC Heartland moved to dismiss or transfer the case to Indiana. The district denied the motion and TC Heartland filed a writ with the Federal Circuit, which the appeals court denied on the grounds that under the 1988 amendments Section 1391(c) applied to Section 1400(b) redefining the meaning of "resides" and therefore, a defendant corporation resided in any judicial district where it was subject to the court's personal jurisdiction. TC Heartland then appealed to the U.S. Supreme Court.
The Supreme Court reversed the Federal Circuit's decision holding that the general venue statute 28 USC 1391(c) does not supplant the patent venue statute 28 USC 1400. In reaching the decision, the Court reasoned that its 1957 decision in Fourco Glass v. Transmirra Products held that for the purposes of the patent venue statute a domestic corporation resides only in its State of incorporation. Further, the Court reasoned that in its 1988 amendments to the general venue statute, Congress did not intend to alter the the meaning of the patent venue statute and found that the 2011 Congressional amendments to the general venue statute failed to ratify the Federal Circuit's VE Holding decision.
Full text of the opinion is available here.
Kraft Foods, a Delaware corporation with principal place of business in IL sued TC Heartland in Delaware district. TC Heartland, an IN corporation headquartered in IN, was not registered to do business in DE and had no meaningful presence in the state although TC Heartland shipped the allegedly infringing products into DE. TC Heartland moved to dismiss or transfer the case to Indiana. The district denied the motion and TC Heartland filed a writ with the Federal Circuit, which the appeals court denied on the grounds that under the 1988 amendments Section 1391(c) applied to Section 1400(b) redefining the meaning of "resides" and therefore, a defendant corporation resided in any judicial district where it was subject to the court's personal jurisdiction. TC Heartland then appealed to the U.S. Supreme Court.
The Supreme Court reversed the Federal Circuit's decision holding that the general venue statute 28 USC 1391(c) does not supplant the patent venue statute 28 USC 1400. In reaching the decision, the Court reasoned that its 1957 decision in Fourco Glass v. Transmirra Products held that for the purposes of the patent venue statute a domestic corporation resides only in its State of incorporation. Further, the Court reasoned that in its 1988 amendments to the general venue statute, Congress did not intend to alter the the meaning of the patent venue statute and found that the 2011 Congressional amendments to the general venue statute failed to ratify the Federal Circuit's VE Holding decision.
Full text of the opinion is available here.
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