TC Heartland Decision

What is TC Heartland and what does it mean to the small time inventors?

Argued on March 27, 2017 and decided on May 22, 2017, a dispute aroise over the patent venue statute, 28 U.S.C. § 1400(b).  In that case, the Kraft Foods filed a patent infringement suit in the District Court for the District of Delaware against TC Heartland.  TC heartland argued before the Supreme Court that it did not reside in Delaware and had no regular and established place of business in Delaware pursuant to 28 U.S.C. § 1400(b).

The Court noted that the catch all statute, § 1391 includes a saving clause which expressly provided that the provision does not apply when "otherwise provided by law," thus making explicit that only 28 U.S.C. § 1400(b) is applicable for venue related issues in patent infringement claims.

28 U.S.C. § 1400(b)

The patent venue statute, 28 U.S.C. § 1400(b), provides that "[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business."  The Court had previously determiend in Fourco Glass Company that a domestic corporation resides only in its State of incorporation.

The question before the Court was where proper venue lies for a patent infringement lawsuit agaisnt domestic companies.  The Court rejected the application of the general venue statute 28 U.S.C. § 1391(c).  Because Congress amended the general venue statue §1391, but did not amend § 1400, the Court determiend that venue a patent infringement lawsuit is proper only pursuant to § 1400 where the company resides and that it resides only in the State of incorporation for purposes of patent venue statute.

This signficantly affects the venue under which a patent infringment suit may be brought.  When suing multiple companies for patent infringment, this can drastically increase the cost to enforce the patents.  A small time inventor having to hire local counsel in each location that an infringing company resides dramatically shifts the balance of power in favor of the infringing company.

Immediatley following the TC Heartland decision, there have been hundreds of motions to transfer or dismiss.  Although there are questions, such as the ruling from Judge Rodney Gilstrap in Raytheon Co. v. Cray Inc. what exactly the limitations imposed by TC Heartland.

Many large corporations were hopefull taht the TC Heartland opinion would slop non-pracitcing entitites ("NPE") to a hault.  However, many others do not believe that it will have a drastic impact on the NPEs.  Instead, this decision is most likely to hurt small inventors until Congress acts to even the playing field for everyday inventors.

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