TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. 258 (2017)

Bringing Patent Venue Back Home — Defining Where Patent Cases Can Be Filed"

Short Description:

This U.S. Supreme Court case addressed where patent infringement lawsuits can be filed under the U.S. patent venue statute, 28 U.S.C. § 1400(b).The Court clarified that a domestic corporation “resides” only in its state of incorporation for patent cases, rejecting the broader interpretation that allowed patent suits to be filed almost anywhere a company sold products.

This decision significantly restricted forum shopping in patent litigation, particularly affecting districts like the Eastern District of Texas, which were popular for patent holders.

Facts:

1.     Kraft Foods Group Brands LLC sued TC Heartland LLC in the District of Delaware, alleging that TC Heartland’s liquid water-enhancing products infringed Kraft’s patents.

2.     TC Heartland is incorporated in Indiana, where it also has its headquarters.

3.     TC Heartland shipped some allegedly infringing products into Delaware, but it had no physical presence or employees in that state.

4.     TC Heartland moved to transfer venue to Indiana, arguing that under 28 U.S.C. § 1400(b), venue was proper only in:

o    the judicial district where the defendant resides, or

o    where the defendant has committed acts of infringement and has a regular and established place of business.

5.     TC Heartland argued that “resides” meant only its state of incorporation (Indiana).

6.     The District Court denied the motion, relying on a broader interpretation under 28 U.S.C. § 1391(c), which treated a corporation as residing wherever it was subject to personal jurisdiction.

7.     The Federal Circuit affirmed, holding that § 1391(c) applied to patent venue statutes.

8.     TC Heartland appealed to the U.S. Supreme Court.

Issues / Questions:

1.     Does the definition of “resides” in 28 U.S.C. § 1400(b) refer only to a corporation’s state of incorporation, or does it include any district where the company has personal jurisdiction?

2.     Did Congress intend § 1400(b) to be the exclusive provision governing venue in patent cases?

Suggestions / Arguments:

• TC Heartland's Argument:

  • “Resides” under § 1400(b) refers only to the state of incorporation, based on the Supreme Court’s earlier ruling in Fourco Glass Co. v. Transmirra Products Corp. (1957).

  • Allowing patent suits anywhere a company sells products encourages forum shopping, which is unfair to defendants.

• Kraft Foods' Argument:

  • Venue should follow the broader definition of § 1391(c), which allows corporations to be sued anywhere they do business.

  • This interpretation provides flexibility and convenience for patent holders.

Findings / Judgment:

• Judgment Date: May 22, 2017

• The Supreme Court unanimously reversed the Federal Circuit.

Key Findings:

1.     The Court reaffirmed Fourco Glass (1957) and held that:

o    A domestic corporation “resides” only in its state of incorporation for patent cases.

2.     § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions.

3.     The broader definition of corporate residence in § 1391(c) does not apply to patent cases.

4.     Venue in patent suits is proper only in:

o    the defendant’s state of incorporation, or

o    where the defendant has committed acts of infringement and has a regular and established place of business.

5.     This ruling significantly limited forum shopping by patent holders, especially in plaintiff-friendly districts.

Conclusion:

The decision brought greater fairness to patent litigation by preventing companies from being dragged into distant, unrelated courts merely because they sold products there. It restored a narrower, traditional interpretation of the patent venue statute.