It’s NOT Complicated: TC Heartland v. Kraft Food Group Brands

Adrienne Naumann recently spoke for our United States Federal Intellectual Property Developments 2018-2019 Webinar, offering her expertise on the Federal Defend Trade Secrets Act and recent relevant cases. She established her own practice in 1996, exclusively focusing on intellectual property law. We’re so glad to be able to share another one of her articles here!

In TC Heartland LLC v. Kraft Foods Group Brands, 137 S. Ct. 1514 (2017) the U.S. Supreme Court [hereinafter ‘the Court’] held that U.S. patent infringement litigation takes place only in the state in which a corporation is incorporated. To arrive at this holding the Court concluded that the general federal venue statute at 28 U.S.C. 1391 does not define corporate residence in the patent infringement litigation venue statute. 28 U.S.C. 1400(b).

TC Heartland LLC [hereinafter ‘Heartland’] is a corporation that is organized under Indiana law and headquartered in Indiana. Kraft Foods Group Brands [hereinafter ‘Kraft’] is organized in Delaware with its principle place of business in Illinois. Kraft filed a lawsuit in Delaware based upon Heartland’s alleged infringement of its patents for water enhancer products. Heartland’s position was that the Delaware trial court had no personal jurisdiction over Heartland, or in the alternative that venue should be transferred to Indiana. However, the trial court concluded there was personal jurisdiction over Heartland and denied its motion for a transfer of venue. Before the U.S. Court of Appeals for the Federal Circuit [hereinafter ‘the Federal Circuit’] Heartland contended that Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957) squarely held that venue for patent infringement litigation, based upon corporate residence, was exclusively in the state in which a corporation is incorporated. Nevertheless, the Federal Circuit agreed with the trial court, because the general federal venue statute explicitly states (i) a corporation is a resident of any judicial district subject to a court’s personal jurisdiction in that district and (ii) this definition applies “for all venue purposes,” including corporate residence in section 1400(b). 28 U.S.C. 1391(c).

The Court reversed the Federal Circuit decision and held that “residence” in the patent infringement venue statute refers exclusively to the state of incorporation for domestic corporations. It observed that amendments to section 1391 after Fourco did not result in Fourco’s definition of corporate residence in section 1400(b) becoming obsolete. The Court further observed that Fourco is still good law, neither party has asked the Court to revisit its holding, and that Congress has not amended section 1400(b) since Fourco. Therefore, the definition of corporate residence in section 1391(c) does not apply, because the section 1391 pre-amble reads “except as otherwise provided by law,” and Fourco qualifies as an exception.

In sum, section 1400(b) does not include the broader definition of corporate residence of the general venue statute. The Court concluded by remanding the case to the Federal Circuit for further proceedings consistent with its decision.

 

[1]Personal jurisdiction is defined as the power of a court over an actual person or entity. Venue is defined as the location where either party in a lawsuit may require the case to proceed. In other words, venue is a subset of locations where there is personal jurisdiction over the parties to the lawsuit.
Sarah

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