Posts Tagged: "TC Heartland"

Because patent trolls prefer filing in the Eastern District of Texas, the thinking goes that it will be a significant blow to patent trolls if the Supreme Court does not agree with the Federal Circuit. In other words, the days will be numbered for patent trolls if the Supreme Court determines that Congress did not expanded patent venue with the 1988 amendment that made the statutory definition of corporate residence found in § 1391 applicable to patent cases. That conventional wisdom is wrong!… Reflection Code has brought patent infringement actions in the Eastern District of Texas, but on March 31, 2017, Reflection Code brought two separate patent infringement lawsuits in the Eastern District of Michigan — one against Bissell, Inc. and the other against Mattel, Inc.

On Monday, March 27th, the U.S. Supreme Court heard oral arguments in TC Heartland LLC v. Kraft Food Group Brands LLC. The case, arising from allegations of patent infringement over liquid water enhancement products, will ask the court to decide whether 28 U.S.C. Section 1400(b), the patent venue statute which provides that judicial actions for patent suits take place in the district within which the defendant resides, is supplemented by 28 U.S.C. Section 1391(c), which provides that an entity may reside in multiple districts.

If the Supreme Court were to reverse the Federal Circuit and revert back to Fourco Glass, that would make it difficult for patent owners, including Whirlpool and others like them, to reasonably seek redress for patent infringement. Essentially, a reversion back to Fourco Glass would mean that patent infringement cases brought by corporations like Whirlpool would have to literally be brought in the home court of the patent infringer, or perhaps in Delaware where so many entities are incorporated. It would also necessitate a multiplicity of lawsuits, as Whirlpool explained in its amicus filing.

With respect to the thorny issue of patent litigation, Senator Hatch explained that there is a very real chance that venue reform will happen this year… HATCH: “The Supreme Court is currently examining the issue, so we won’t have a full view of the landscape until after the Court rules. But no matter what the Court does, we’re likely going to need follow-on legislation to prevent future forum-shopping and to ensure that litigants have a meaningful connection to the site of the suit.”

The Federal Circuit’s broad interpretation of the patent-venue statute has led to widespread forum-shopping with a disproportionate number of cases being filed in the Eastern District of Texas. For example, since 2011, roughly a quarter of all patent-infringement cases have been filed in the Eastern District, with 2015 being a peak year when 44% of all patent-infringement cases were filed. This despite the fact that the Eastern District of Texas is home to relatively few companies and home to little more than 3.5 million people. By comparison, the Northern District of California, a district with nearly 8 million people and home to many companies, only made up 4-5% of all patent-infringement filings annually.

The genesis of the patent venue “problem” is simple: Many patent infringement defendants complain about traveling to the Eastern District of Texas. They feel that it is too pro-patent, too pro-enforcement, or too difficult for defendants to win on a motion to dismiss… With the US Supreme Court agreeing to hear TC Heartland the perennial patent venue issue is front and center for patent reform in 2017. This case will attract much amicus, media, Congressional, law school, and fake news attention. It should influence how patent owners and litigation investors look at venue options in general and perhaps also with regard to growth markets like Germany and China. It will also tell us how the Trump administration thinks about patent issues.

Earlier today the United States Supreme Court granted certiorari in TC Heartland LLC v. Kraft Food Brands Group LLC. In deciding to hear this patent venue case the Supreme Court has agreed to decide whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions… Ultimately, the question that the petitioner really wants the Supreme Court to address is whether the Eastern District of Texas, which is home to 20-25% of all patent litigations because it is perceived to be patent owner friendly, is a proper venue for patent owners to be choosing. If the Supreme Court issues a ruling that strikes down current patent venue rules there would be no need for patent venue reform efforts to continue in Congress. On the other hand, if the Supreme Court were to affirm the Federal Circuit in this case calls for legislative venue reform would likely become deafening.

Twenty-five years ago, the Federal Circuit decided a case that transformed where (and how) patent infringement cases can be litigated.[1] By expanding the scope of where a corporate defendant “resides” for venue purposes, the court in VE Holding Corp. v. Johnson Gas Appliance greatly increased the number of states and courts in which many corporations can be sued for infringement. This decision has contributed to the development of forum-shopping and related litigation issues over the past several years. One company, TC Heartland, LLC, is now urging the Federal Circuit to overturn that precedent and restore more stringent venue restrictions through a writ of mandamus, and dozens of others are joining the debate.