Supreme Court to Hear Patent Venue Case

The plot just thickened in the long-running debate over where patent cases should be litigated.

Yesterday the U.S. Supreme Court agreed to review the Federal Circuit’s decision in TC Heartland LLC v. Kraft Foods, in which the Federal Circuit held that patent suits may be filed in any judicial district in which the defendant sells an allegedly infringing product.  The Federal Circuit has consistently applied this interpretation of the patent venue statute since its 1990 decision in VE Holding.

Many litigants and commentators have argued that by allowing patent lawsuits to be filed in any district in which the defendant has sales, VE Holding and its progeny have encouraged patent holders to file infringement lawsuits in courts perceived to have plaintiff-friendly policies, such as the Eastern District of Texas, which is known for its fast timetables to trial.

In its appeal to the Federal Circuit, TC Heartland had argued that the VE Holding line of cases overlooked a 2011 federal law, which, according to TC Heartland’s interpretation, provides that patent suits may be filed only where the defendant is incorporated (or has an established place of business) and has committed acts of infringement. The Federal Circuit rejected that argument out of hand, finding it “utterly without merit or logic.”

But in a brief written order issued yesterday, the Supreme Court indicated it would review the Federal Circuit’s decision, which may signal that the Court doesn’t share the Federal Circuit’s view that the issue is cut and dried. If the Court adopts TC Heartland’s argument, the Court’s decision will fundamentally change where patent cases can be litigated.

Ironically, the Supreme Court’s decision in TC Heartland—which could potentially end or limit the dominance of the Eastern District of Texas in patent cases—wasn’t even filed in that district.  Kraft sued TC Heartland in Delaware federal court. TC Heartland, a liquid sweetener company, said the case belongs in Indiana, where it is based.  Even though TC Heartland wasn’t filed in the patent hotbed of East Texas, the Supreme Court’s decision will be closely watched there—and throughout the country.

The case is TC Heartland LLC v. Kraft Food Brands Group LLC, U.S. Supreme Court Case No. 16-341.  The Supreme Court will likely hear oral argument in the case in early 2017 and issue its decision by the end of June.  Stay tuned to Global IP Matters for further updates on this important case.

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