Case Note: TC Heartland v. Kraft Foods

Steven C. Sereboff

So Cal IP Law Group LLP

Once again, the Supreme Court has swept away decades of established patent case law. This time, though, the decision was expected by many, and statistically certain. In the decision, TC Heartland LLC v Kraft Foods Group Brands LLC, Case No. 16-341 (May 22, 2017),¹ the Supreme Court held that the venue statute for patent suits, 28 U.S.C. § 1400(b), means precisely what it says. This rocked the patent world. For twenty-five years, the law as defined by Federal Circuit held that § 1400(b) is modified by 28 U.S.C. § 1391(c). Under TC Heartland, however, venue is proper only where the infringing defendant is incorporated, or in districts where there has been an act of infringement and the defendant has a regular and established place of business.

Justice Thomas wrote for a unanimous Supreme Court² and relied primarily upon the Court’s own precedent, namely Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957). In TC Heartland, as in Fourco Glass, the Supreme Court held that the term "residence" in 28 U.S.C. § 1400(b) means only the state in which a company is incorporated. This overruled the Federal Circuit’s 25-year-old precedent, VE Holding Corp. v. Johnson Gas Appliance Co., 917 F. 2d 1574 (1990), which held that a corporation was "deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." That is, a corporation could be sued anywhere it infringed. The Federal Circuit had a good rationale for its holding, and perhaps this allowed it to stand for so long.