Government Circuit Clarifies Patent Venue Laws

Patent Venue Laws

Clarifying Patent Venue Statute Post-TC Heartland Era

The Government Circuit recently addressed crucial nuances in the post-TC Heartland era, shedding light on the patent venue statute through three key cases: In re HTC Enterprise (No. 2018-130, May 9, 2018), In re ZTE (USA) Inc. (No. 2018-113, May 14, 2018), and In re BigCommerce, Inc. (No. 2018-120, May 15, 2018). These cases highlighted:

Non-U.S. Entities and Patent Venue

The Federal Circuit reaffirmed that non-U.S. entities fall outside the scope of the patent venue statute, reiterating a longstanding principle. This clarification originated from Fourco Glass Co. v. Transmirra Products Corp. (355 U.S. 222, 1957), emphasizing that non-U.S. entities lack a fixed place of business in the U.S., creating a venue gap in patent infringement suits against them.

Third-Party Venue and Legislative Intent

In the case of In re HTC, the court revisited the impact of the Federal Courts Jurisdiction and Venue Clarification Act of 2011 on third-party venue rules. Despite arguments proposing a change in the treatment of outsiders under the general venue statute, the Federal Circuit maintained the historical rule, affirming that the patent venue statute prevails for foreign defendants.

ZTE Decision and Burden of Proof

In re ZTE strengthened defendants’ stance against venue in the Eastern District of Texas, shifting the burden of establishing proper venue onto the plaintiff in patent cases. The Federal Circuit ruled that the plaintiff must substantiate venue, countering the prior practice in the Eastern District of Texas, which placed the onus on defendants to disprove venue.

Residency in States with Multiple Jurisdictions

Following TC Heartland, In re BigCommerce addressed residency for entities incorporated in states with multiple legal jurisdictions. It clarified that a domestic corporation resides either in the district of its principal place of business or, if absent, where its registered office is located, not in every legal jurisdiction within the incorporating state.

Impact and Conclusion

These recent Federal Circuit rulings significantly impact patent infringement defendants, particularly those frequently sued in prominent districts like the Eastern District of Texas and the District of Delaware. While some queries remain, these decisions continue to define the boundaries and application of the patent venue statute, offering clarity amidst ongoing discussions within the legal landscape.

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