The U.S. Supreme Court today upended the status quo for venue in patent cases. For nearly three decades, with some limitations, corporate patent infringement defendants were deemed to "reside"—and thus venue was proper—in any court that had personal jurisdiction over the defendant. The result was a concentration of patent lawsuits in a handful of districts, such as the Eastern District of Texas.

Today in TC Heartland v. Kraft Foods Group Brands LLC, the Supreme Court held 8-0 (with Justice Gorsuch not participating) that a corporate defendant resides for patent venue purposes only in its state of incorporation. This decision will restrict the number of proper venues available for patent infringement plaintiffs to file suit and will likely shift litigation away from the Eastern District of Texas and toward Delaware and other states in which many companies are incorporated or have their manufacturing facilities or corporate headquarters.

As a result of the decision, patent infringement suits against domestic corporations will be proper either where the corporation is incorporated or where the corporation has committed acts of infringement and has a regular and established place of business. Notably, the "regular and established place of business" language in Section 1400(b) has been litigated only infrequently, but will now be of much greater importance in patent infringement venue disputes.

The practical effects of this otherwise technical decision could be far-reaching. Offering patent infringement plaintiffs many choices as to where to file led to the development of one of patent litigation's peculiarities—a concentration of cases in the Eastern District of Texas. In 2015, for example, more than 2,500 new patent cases were filed in the Eastern District of Texas, making it home to more than one-third of new patent cases. And a single judge in that district was assigned almost 3,000 new patent infringement cases between 2015 and 2016. Lawyers have long debated whether this concentration of litigation is on balance or positive or negative for the patent system. The Supreme Court’s decision is likely to shift litigation away from the Eastern District of Texas.

That does not mean, however, that the decision will necessarily have the effect of dispersing patent litigation more evenly throughout the country. The District of Delaware is already the second-busiest district court in the country for patent litigation, and is likely to see even more new cases as a result of this decision, given the number of companies that are incorporated there. We also anticipate an uptick in the use of the Multidistrict Litigation procedure, which allows cases with common questions of fact from diverse districts to be consolidated in one court for pretrial proceedings. It also remains to be seen whether the lower courts will ameliorate the effect of the Court's holding by adopting a broad interpretation of "regular and established place of business," or whether Congress will seek to overturn the decision by an amendment to the venue statutes.

Ballard Spahr's Intellectual Property Group comprises trial lawyers and counselors who are on the cutting edge of patent, trademark, unfair competition, copyright, trade secret, internet, licensing, and trade dress matters. We bring and defend IP cases in courts throughout the country, and before the Patent Trial and Appeal Board and the Trademark Trial and Appeal Board. We have a deep bench of lawyers with advanced technical degrees who identify and protect our clients' global intellectual property interests, and offer strategic prosecution and due diligence guidance relating to strategic product development, mergers and acquisitions and licensing, and portfolio restructuring.

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