Although the U.S. Supreme Court rendered its decision in T.C. Heartland, LLC v. Kraft Foods Group Brand LLC more than one year ago, which this blog discussed, the contours of its holding are still being worked out. In T.C. Heartland, the Supreme Court held that the patent venue statute, 28 U.S.C. §1400(b), limits patent litigants to file their suits to the federal courts residing in the defendant’s state of incorporation or principal place of business.
Recently, the Court of Appeals for the Federal Circuit ruled on three cases that fill several gaps in the T.C. Heartland decision regarding venue.
First, on May 9, 2018, the Fed Circuit denied HTC Corp.’s writ of mandamus in In re HTC Corp., which focused on the proper venue for litigation against a foreign corporate defendant. HTC sought to dismiss the suit for patent infringement because it argued it was subject to the provisions of 28 U.S.C. §1400(b), the patent venue statute, rather than the 28 U.S.C. §1391(c), the general federal venue statute. The Fed Circuit panel disagreed and found venue proper as to the Taiwan-based HTC. However, venue was not proper as to its U.S. subsidiary, HTC America. The Fed Circuit concluded that Congress did not restrict locations of suits against alien defendants.
Second, on May 14, 2018, the Fed Circuit granted ZTE’s writ of mandamus, vacating the district court’s order denying ZTE’s motion to dismiss for improper venue, in In re ZTE (USA) Inc., and in doing so, shifted the burden of proof to show proper venue from defendant to plaintiff. ZTE had argued at the district court that contracting with a call center in the improper district did not establish the necessary “regular and established place of business” as required by T.C. Heartland. The district court required ZTE to show improper venue, and the Fed Circuit found that the district court erred in requiring ZTE to do so.
The placement of the burden of persuasion on the propriety of venue is critical to determining in what forum a patentee can seek redress for infringement of its patent rights. [Further,] Section 1400(b)’s intentional narrowness supports placing the burden establishing proper venue on the Plaintiff.
The final case, issued on May 15, 2018, was In re BigCommerce, Inc., which dealt with multi-district states and where the proper venue lie. The Fed Circuit granted BigCommerce’s writ of mandamus, finding that the district court (E.D. Texas) erred in ordering that a domestic corporation resides in the state of incorporation and in multi-district states, that defendant would then reside in each of the districts for venue. The Fed Circuit determined that Congressional intent suggested that in §1400(b) a defendant resides in only one judicial district, and also resides in any district where an act of infringement has occurred and defendant has a regular and established place of business. In this case, BigCommerce was registered and headquartered in the Western District of Texas, and did not have business in the Eastern District. Therefore, venue was only proper in the Western District.
These three cases were all rendered at the same time, framing the T.C. Heartland venue discussion, and providing gap fillers in the decision made by the Supreme Court.