Monday, 5 June 2017
TC Heartland: Good for Patent Litigation?
In TC Heartland v. Kraft Food Group Brands, a recent opinion, the US Supreme Court decided to restrict the meaning of the patent venue statute. This statute essentially provides in which judicial district a defendant may be sued for patent infringement. The patent specific statute, 13 USC 1400(b), provides: “[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 US Supreme Court had to analyze whether “where the defendant resides” means “where the defendant is in incorporated” per a previous US Supreme Court case analyzing that provision, or according to subsequent amendments by Congress to the general venue statute which has a much broader definition of what “resides” means. Ultimately, the US Supreme Court in a unanimous Associate Justice Thomas opinion (Associate Justice Gorsuch not participating) decided to adopt the more restrictive definition: “resides” means where the defendant is incorporated.
Practically, many believe that this decision is another attempt to restrict “abusive” patent litigation or patent troll behavior by directing litigation out of the Eastern District of Texas to other districts—interestingly perhaps to districts that may be more favorable to accused patent infringers. One concern about patent infringement generally has been the competence of judges and juries to address technical and complicated patent cases. Notably, the Eastern District of Texas has handled a large number of patent cases for many years and arguably the judges have developed technical and legal competency in patent cases. Indeed, this could explain why the district handles patent cases relatively quickly. Arguably, we’ve now made a policy decision pushing cases away from a competent district to those that are not. However, some cases presumably may now be brought in districts in California or Delaware (where a large number of corporations are incorporated), which may also have developed competency in handling patent cases. I have been told that juries in some districts in California are quite technically sophisticated—such as in the Northern District of California where Silicon Valley is located. Perhaps one benefit of TC Heartland may be better juries; although remember how the Apple v. Samsung jury was criticized.