It was ruled unanimously by the Supreme Court this week that patent lawsuits must now be filed by companies in the defendant’s country. The decision is expected to protect U.S. automakers from predatory patent litigation.
TC Heartland LLC v. Kraft Foods Group Brands focused on where plaintiffs in an intellectual property or patent infringement dispute can file a lawsuit. The Supreme Court’s decision will greatly reduce the patent infringement cases debated in the Eastern District of Texas federal court, where the vast majority of these suits are fought.
Until this lawsuit, plaintiffs were allowed to file a patent infringement suit in any district where the defendant does business, regardless of where a company was based, as long as there was infringing activity within the Eastern District a case could be argued there.
Ron Abramson, partner with Lewis Baach, gave The Patent Lawyer exclusive professional comment on the case.
“I am surprised at the unanimity and brevity of this decision” Abramson said, “by that I mean that there was little hint at oral argument of the court’s rationale based on the language of the 1948 statute – that the more recent 1988 and 2011 amendments of “venue purposes” to “all venue purposes” did not materially change the meaning of the general venue statute and therefore that the Supreme Court’s 1957 decision on this (holding that the 1948 statute controlled the meaning of the term “residence” for purposes of 35 USC 1400(b)) still controls.”
Abramson continued by claiming that “This is a defensible ruling, but in my mind questionable. Unless Congress changes the law once again broaden the bases for patent venue – which I very much doubt will happen – the narrow rule of today’s decision is will be the law going forward.
It is clear therefore that there “will be an exodus of cases from the Eastern District of Texas (forced and voluntary) and a big influx to the District of Delaware. Given the likely influx into Delaware, it is also possible that the judges in Delaware will cope with this development by granting more transfers “for convenience” from Delaware to corporate headquarters states under yet another venue provision – the discretionary venue transfer provision in 28 USC 1404.”
Stroock Intellectual property partner Pierre Yanney also commented on the case, suggesting that “where the ruling does have a practical impact is for smaller defendants”. Yanney continues with “they can only be sued either where they are incorporated or where they have a place of business, and they cannot be sued in any far-flung state where they happened to have sold a product—again, a result, which is consistent with due process considerations.”