U.S. Supreme Court Issues Ruling Substantially Curtailing Available Venues for Patent Infringement Actions

In a significant and long-awaited ruling governing patent litigation, the Supreme Court today in TC Heartland v. Kraft Foods reversed long-standing lower court precedent that enabled patent owners, with relatively few restrictions, to sue corporate defendants in jurisdictions in which alleged infringement occurred.  Many corporations market and sell products directly or indirectly throughout the United States, which often enabled plaintiffs to select forums convenient or desirable for them at the expense of the same factors for the defendant.  Following today’s ruling, domestic corporations must be sued for patent infringement either in the state in which they are incorporated, or in a venue where alleged infringement has occurred and the defendant corporation has a “regular and established place of business.”

As practical matter, TC Heartland significantly restricts the potential for forum shopping in patent infringement cases, and likely will reduce or eliminate the selection of the Eastern District of Texas as a “go-to” patent venue.  The Eastern District has long been a popular choice of venue for patent plaintiffs for a variety of reasons, including a reputation for large damages verdicts and the difficulty for defendants of disposing of a case on early motions or on summary judgment.  In 2016, 35% of all patent cases filed in the United States were filed in the Eastern District–and that percentage was actually down from 2015.   For technology companies in particular, California, Delaware and other jurisdictions in the Southwest with substantial technology presence, will likely see a relative increase in the number of patent infringement cases going forward.

Image Courtesy of: Scott Robinson, no changes have been made. Used under Creative Commons license.