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Supreme Court Narrows Definition of Residence for Patent Venue

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Today, the Supreme Court issued its much anticipated opinion in TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341, 581 U.S. ___ (2017). In an 8-0 decision authored by Justice Thomas, the Court reversed the Federal Circuit’s denial of a petition for a writ of mandamus on a transfer motion from the District of Delaware and held that the definition of a domestic corporation’s “reside[nce]” for the purposes of patent venue under 28 U.S.C. §1400(b) refers only to the state of incorporation. Prior to today’s decision, courts had been applying a broader definition of “residence” for patent venue purposes which encompassed any judicial district in which a defendant is subject to the court’s personal jurisdiction.

The patent venue statute, 28 U.S.C. §1400(b), provides that “[a]ny 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.” However, the general venue statute, 28 U.S.C. §1391, currently provides that “[f]or 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.” The Court rejected the Federal Circuit’s interpretation of §1400(b) that incorporates the broader definition of corporate “residence” contained in §1391(c). Slip Op. at 1.

The Court relied heavily on Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 229 (1957) where the Court held that §1400(b) “is the sole and exclusive provision controlling venue in patent infringement actions, and … is not to be supplanted by … §1391(c).” In reaffirming Fourco’s holding, the Court overruled the Federal Circuit’s 1990 decision in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1578 (Fed. Cir. 1990), which held that 1988 amendments to § 1391(c) rendered the broader venue provision applicable to patent cases.

The Court, in finding that neither the 1988 amendment nor a subsequent 2011 amendment to § 1391(c) affected the exclusivity of § 1400(b) for determining venue in patent cases, held that Congress “ordinarily provides a relatively clear indication of its intent” in the text of the amended provision when Congress intends to alter the meaning of a provision. Slip Op. at 8. The Court found that the current version of §1391 “does not contain any indication that Congress intended to alter the meaning of §1400(b) as interpreted by Fourco.” Id. Accordingly, the Court reversed and remanded for further proceedings consistent with its opinion. Id. at 10.

*Stephanie Kato, a Baker Botts law clerk, assisted in the preparation of this article.

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