Today, the U.S. Supreme Court issued its decision in TC Heartland v. Kraft Foods that limits the venue — i.e., geographical location–of where patent cases may be brought. For decades prior to this decision, venue was construed broadly to be essentially anywhere a defendant has minimum contacts. By today’s decision, venue is construed narrowly as limited to where the defendant either (i) is incorporated or (ii) has a regular and established place of business in which the defendant committed acts of infringement.
This ruling may substantially limit the number of patent cases that may be brought in the perceived patent-friendly Eastern District of Texas. This also may increase the number of patent cases brought in patent-savvy Delaware, because that is where most companies are incorporated. The decision also may make it harder to sue multiple defendants in a single action, because it may be difficulty to establish proper venue over all defendants.
This decision also takes more wind out of the sales of those seeking legislative changes to U.S. patent law. Whether rightly or wrongly (we express no view here), the E.D. Texas has been used as an example of patent litigation abuse, venue shopping and the need for patent reform. This decision may end that concern and follows other court decisions addressing patent litigation issues as well as the FTC’s patent assertion entity study that did not find the widespread patent litigation abuse that had fueled legislative efforts. (see, e.g., our Apr. 29, 2014 post on Supreme Court making it easier to get attorneys fees in patent cases and our Oct. 7, 2016 post on the FTC’s PAE study).