Almost two months ago, the United States Supreme Court heard oral arguments in TC Heartland LLC v. Kraft Food Group Brands LLC. In deciding to hear this patent venue case, the Supreme Court agreed to decide whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions. Pursuant to § 1400(b), a “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.”
This specific, if not somewhat archaic, issue has tremendous ramifications for the future of how patent litigation will be handled in America. Or so the conventional thinking goes. It is also believed that the Supreme Court resolution of the issue has great significance for patent reform. But Senator Orrin Hatch (R-UT) has also said that, regardless of what the Supreme Court does, Congress will take up the issue of venue reform. What that reform will look like will depend greatly on how the Supreme Court resolves the venue question surrounding § 1400(b).
The real reason the Supreme Court took TC Heartland is probably because the Court wants to inject itself into the ongoing political discussions regarding patent reform, and more specifically the discussion of patent trolls. Indeed, the Supreme Court has repeatedly brought up the issue of patent trolls during oral arguments and in their written opinions in a variety of patent cases despite the fact that no patent troll or patent trolling issue has ever been before the Court. It is hard not to notice the Supreme Court’s fascination with patent trolls.
TC Heartland looks like it will become about whether patent trolls are engaging in abusive litigation in the Eastern District of Texas, which may or may not be an interesting question to discuss but is inappropriate in this case. The case that may decide the fate of patent trolls in Eastern Texas has nothing to do with patent trolls or Eastern Texas. The patent owner is Kraft Foods, a Delaware company that filed a patent infringement lawsuit against an infringer in Delaware. Kraft did not go to some exotic location, but instead sued where they are located and are being harmed. Even Justice Stephen Breyer surprised many during oral arguments, asking why the Eastern District of Texas is at all relevant in this case that has nothing to do with Texas or patent trolls. He probably should have mentioned that earlier before the Court took the case seeking a writ of mandamus, which is an extraordinary remedy for the Supreme Court to concern themselves with.
Of course, judges have been known from time to time to express interest in one position and then ultimately decide in an entirely different manner. This is what makes predicting the outcome of any Supreme Court ruling, or the ruling of any appeals court, very difficult based only on the oral argument. We do know that the Supreme Court generally does not take cases from the Federal Circuit to affirm both the holding and the legal justification for the holding, so smart money is generally bet on the Supreme Court overruling the Federal Circuit. In this case, that would mean that § 1400(b) would be the sole and exclusive provision governing patent venue, as the Supreme Court decided in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957).
Because patent trolls prefer filing in the Eastern District of Texas, the thinking goes that it will be a significant blow to patent trolls if the Supreme Court does not agree with the Federal Circuit. In other words, the days will be numbered for patent trolls if the Supreme Court determines that Congress did not expand patent venue with the 1988 amendment that made the statutory definition of corporate residence found in § 1391 applicable to patent cases.
That conventional wisdom is probably wrong. Patent trolls will be patent trolls. Patent litigation is going to continue regardless of what the Supreme Court decides in TC Heartland. In fact, there is a real chance that those who are so often the targets of patent infringement lawsuits will regret the day patent owners were forced to leave the confines of the Eastern District of Texas.
Tags: patent, patent troll, patent trolls, patents, Supreme Court
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