TC Heartland Changed the Law on Venue for Patent Litigation

By Keith J. Grady and Karen Z. Morris

On May 22, 2017, in TC Heartland LLC v. Kraft Foods Group Brands, LLC, 137 S.Ct. 1514 (2017), the Supreme Court held that patent venue is controlled exclusively by 28 U.S.C. § 1400(b), which restricts venue in patent cases to (1) where the Defendant resides, or (2) where the Defendant commits an act of infringement and has a regular and established place of business. The decision was immediately hailed by commentators as a significant break with past precedent. Many suggested that the decision could sound the death knell for patent litigation in the Eastern District of Texas and would likely result in a dramatic increase in the numbers of patent cases filed in the District of Delaware. Some commentators correctly noted that the decision would spawn litigation over what constitutes a “regular and established place of business” within the meaning of § 1400(b). 

Another issue raised in the commentary was how the decision would be applied to pending cases. Federal Rule of Civil Procedure 12(b)(3) requires a party to assert an improper venue defense by motion prior to filing a responsive pleading. And, Rule 12(h)(1) provides that an improper venue defense is waived if it is not raised in a Rule 12 motion. An exception to the waiver rule allows a party to raise a defense that would otherwise have been waived if an intervening change in the law has occurred. 

Despite the common perception of practitioners that the TC Heartland decision changed the law of venue in patent cases, the majority of district courts to address this issue have come to the opposite conclusion, finding that the decision merely reaffirmed existing law and could not excuse the failure to raise the defense earlier. The reasoning of these decisions is questionable, as is the refusal of these courts to recognize how dramatically TC Heartland changed the landscape for patent litigation. 

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