On Wednesday September, 20th 2017, attorneys from Brooks Kushman P.C. gave an informational brief to MSU College of Law on several recent intellectual property case holdings. Most notable was the Supreme Court of the United States (SCOTUS) finding on a venue case, TC Heartland v. Kraft Foods.
Until recently, the Eastern District of Texas has been a haven for plaintiffs suing for patent infringement. This is because historically, courts favored their claims and penalized defendants for infringement. The SCOTUS, re-established a precedent in TC Heartland, that when 28 U.S.C. § 1400(b) remains the only applicable law for determining venue. TC Heartland LLC v. Kraft Foods Group Brands LLC.
In order to determine appropriate venue for patent infringement cases, plaintiffs are restricted to either of two locations: (1) the judicial district where the defendant “resides;” or (2) where the defendant has committed acts of infringement and has a regular and established place of business. 28 U.S.C. § 1400(b). In 1957, SCOTUS held that for purposes of § 1400(b) a domestic corporation “resides” only in its state of incorporation, and that the broader meaning of “resides” in the general venue statute, 28 U. S. C. §1391(c), was not intended to read into § 1400(b). See Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 229 (1957). Before TC Heartland, plaintiffs exercised a broader, interpretation for establishing a place of business standard when choosing venue; in order to establish minimum contact with a state, a defendant need only to have continuous and systematic contacts with the intended state. This made nearly every state a potential candidate for any defendant who had sales nationwide.
As a result of the TC Heartland decision, defendants in the Eastern District of Texas are now filing change of venue motions in effort to push plaintiffs to incur additional costs to continue litigation. Such strategy potentially taxes plaintiffs into settlement or dismissal. At the very least, a change in venue may give the defendant a fairer shot with the courts.
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