Federal Circuit Further Clarifies Patent Venue in Three Decisions

Patent litigation can be very burdensome for companies big and small − and a major issue in these cases is where the case will be litigated. 

 Last year, in T.C. Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514 (2017), the Supreme Court overturned 20 years of Federal Circuit precedent, narrowing the legal construction of part of the patent-venue statute, 28 U.S.C. § 1400(b).  But that decision left open a number of issues.

 This past month, the Federal Circuit issued three opinions resolving open issues in determining venue: (1) the patent-venue statute does not apply to foreign corporations; they may be sued anywhere in the United States; (2) the burden of showing venue is proper is on the plaintiff; and (3) in a multi-district state, venue is proper in only one district, generally where the defendant has its headquarters.

 Taken together, for domestic corporations, the available districts to be sued have been further narrowed.  As we pointed out in a prior post concerning patent venue, this can shift the negotiating leverage towards parties accused of infringement (putative defendants), since would-be plaintiffs now have less options of where to sue.

Patent Venue Restricted and Settlement Balance Shifted in Patent Disputes

Two key recent cases have shifted the balance of negotiation leverage in patent disputes between patent owners and accused infringers.  The cases restrict the venues where patent cases against corporations can be brought.  This change will tilt the balance away from patent owners and more in favor of accused infringers.

The decisions limit venue forum shopping as to a corporate defendant to

  • The defendant’s state of incorporation; or
  • A district where the defendant has a physical location, a regular and established place of business which is operated by the defendant, and where an alleged act of infringement must have occurred.

Companies facing threats of patent litigation from trolls and others should be aware that such litigation just got harder for those asserting infringement.  The choice of possible venues has now been considerably narrowed, and for many companies, those districts which meet the new criteria are often both more friendly and more convenient