Patent Venue Selection

Patent venue is governed by 28 U.S.C. § 1400(b), which TC Heartland LLC v. Kraft Foods Group Brands LLC (S.Ct. 2017) revived as the exclusive patent venue statute: 28 U.S.C. § 1400(b): 'Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business'; BEFORE TC HEARTLAND: the Federal Circuit held in VE Holding Corp. v. Johnson Gas Appliance Co. (1990) that the general venue statute (28 U.S.C. § 1391) applied to patent cases, allowing suit wherever the defendant was subject to personal jurisdiction; result: patent plaintiffs could sue almost anywhere; the Eastern District of Texas became the dominant patent forum due to its plaintiff-friendly procedures; TC HEARTLAND RULING: the Supreme Court unanimously reversed VE Holding; § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions; § 1391(c) does not apply; RESIDENCE UNDER § 1400(b): for domestic corporations: 'resides' means state of incorporation (not principal place of business); a Delaware-incorporated company 'resides' in Delaware for § 1400(b) purposes; for individuals: state of domicile; for foreign corporations: § 1391(c)(3) applies (may be sued in any district); REGULAR AND ESTABLISHED PLACE OF BUSINESS: the defendant must have a physical, geographical location in the district; a fixed, physical presence of the defendant; not just the defendant's employees working from home; In re: Cray Inc. (Fed. Cir. 2017): three requirements — (1) physical place in the district; (2) regular and established (not sporadic); (3) the defendant's place of business (not merely an employee's home); ACTS OF INFRINGEMENT: must have occurred in the district where the place of business is located.

TC Heartland transformed where patent cases are filed across the United States: BEFORE TC HEARTLAND: Eastern District of Texas (EDTX) dominated patent filing; handled ~40% of all US patent cases at its peak; plaintiff-friendly: fast dockets; local rules favorable to patentees; specific venue judges (Judge Rodney Gilstrap in Marshall, TX); cases unlikely to transfer; AFTER TC HEARTLAND (2017): defendants challenged venue across the country; many cases transferred out of EDTX; cases must now be in the defendant's home jurisdiction or where they have operations; CURRENT LEADING PATENT VENUES: (a) DISTRICT OF DELAWARE: most corporations are Delaware-incorporated; large patent docket; experienced patent judges; (b) WESTERN DISTRICT OF TEXAS (WDTX) — WACO DIVISION: Judge Alan Albright built a large patent docket after TC Heartland; attracted patent plaintiffs with fast trial settings and case management; multiple mandamus petitions from defendants seeking transfer; WDTX received mandamus orders from Federal Circuit in In re: Apple Inc. (2021) to transfer cases with stronger California connections; (c) EASTERN DISTRICT OF TEXAS: still active; many defendants have distribution centers or servers creating 'regular and established place of business'; (d) NORTHERN DISTRICT OF CALIFORNIA: appropriate venue for tech companies headquartered in Silicon Valley; (e) DISTRICT OF NEW JERSEY: pharmaceutical companies headquartered or with major operations; FOREIGN DEFENDANTS: may be sued in any district; this is why ITC actions (International Trade Commission) remain popular — no venue limitations for exclusion orders.

Even where venue is technically proper, a case may be transferred to a more convenient forum: TWO TYPES OF TRANSFER: (a) TRANSFER UNDER 28 U.S.C. § 1404(a): 'for the convenience of parties and witnesses, in the interest of justice'; requires that the transferee district is also a proper venue; discretionary; plaintiff's choice of forum receives some deference but can be overcome; (b) TRANSFER UNDER 28 U.S.C. § 1406(a): dismissal or transfer when original venue is improper; mandatory if improper (not merely inconvenient); § 1406(a) VENUE CHALLENGE: defendant must raise improper venue in a motion to dismiss or answer; waivable — must be raised in first responsive pleading; CONVENIENCE TRANSFER (§ 1404(a)) FACTORS: private factors: access to sources of proof; compulsory process for witnesses; cost of obtaining attendance of willing witnesses; practical problems making trial easy, expeditious, inexpensive; public factors: court congestion; local interest in the controversy; familiarity with applicable law; fairness in distributing jury duty; MANDAMUS STANDARD: patent transfers are reviewed by the Federal Circuit on mandamus; standard: was the district court's decision a 'clear abuse of discretion'?; the Federal Circuit has been active in overseeing WDTX transfers; In re: Apple (2021) granted mandamus and transferred Apple v. NAPA Communications back to NDCA; FORUM SELECTION CLAUSES: contracts between parties (licensing agreements, development agreements) may include forum selection clauses that govern where disputes are heard; forum selection clauses are generally enforced in patent cases involving contract claims; for standalone infringement claims, § 1400(b) governs; HOME VENUE STRATEGY FOR DEFENDANTS: file declaratory judgment action in home district before being sued; establishes venue; may allow defendant to choose more favorable forum.

Patent plaintiffs and defendants both engage in sophisticated forum analysis: PLAINTIFF'S VENUE STRATEGY: (a) ELIGIBILITY: can you properly sue in this district under § 1400(b)? (b) CASE MANAGEMENT: how fast does the judge set case management schedules?; trial dates? discovery cutoffs?; fast trial = pressure on defendants to settle; (c) LOCAL PATENT RULES: many districts have local patent rules requiring early claim construction exchange; some rules favor plaintiffs, some defendants; (d) CLAIM CONSTRUCTION PROCEDURES: does the judge hold a Markman hearing early (before or after claim construction)? when does it occur relative to summary judgment?; (e) INJUNCTION HISTORY: is this district historically willing to grant preliminary injunctions?; (f) JURY COMPOSITION: local jury demographics; tech literacy; plaintiff or defendant sympathy; (g) JUDGE'S PATENT REPUTATION: experience with complex patent cases; prior decisions on relevant legal issues; (h) MEDIAN TIME TO TRIAL: WDTX under Judge Albright: 18-24 months; EDTX: 2-3 years; Delaware: 2-3 years; NDCA: 3+ years; DEFENDANT'S STRATEGY: file DJ action in home district first if in-bound litigation is anticipated; move to transfer § 1404(a) on convenience grounds; challenge § 1406(a) improper venue vigorously; use mandamus to challenge refusal to transfer; MULTI-DEFENDANT CASES: different defendants may be in different proper venues; patent holders may file separate cases or seek to consolidate in MDL (multidistrict litigation); INTERNATIONAL TRADE COMMISSION (ITC): no venue requirement; global exclusion order; fast (18-month) schedule; respondents from anywhere; used for infringement by imported goods.

Strategic patent litigation often involves coordinating district court cases with ITC proceedings: ITC § 337 INVESTIGATIONS — NO VENUE LIMIT: the International Trade Commission can investigate anyone whose imported goods infringe US patents; no § 1400(b) venue limitation; the complainant (patent holder) files at the ITC in Washington, D.C.; all respondents are brought in regardless of where they are located; the ITC can issue: exclusion orders (barring import of infringing goods); cease-and-desist orders; PARALLEL PROCEEDINGS STRATEGY: patent holders often file simultaneously: ITC complaint (for exclusion order); district court complaint (for damages — ITC cannot award money damages); the district court case is usually stayed pending ITC resolution (courts have discretion); the ITC's schedule (typically 12-18 months to initial determination) puts pressure on defendants; ITC VENUE ADVANTAGE: multinational companies headquartered abroad; defendants with no US presence or limited US operations; defendants whose US operations don't satisfy § 1400(b); defendants who manufacture abroad and import products to the US; DOMESTIC INDUSTRY REQUIREMENT: ITC § 337 requires complainant to have a domestic industry relating to the patented articles: economic prong: significant US investment, employment, or licensing; technical prong: protected articles practice the patent; practicing entity requirement: NPEs (non-practicing entities) can satisfy domestic industry through licensing activities; COORDINATION: if ITC issues exclusion order, defendant may have leverage to settle or obtain a license; ITC invalidation of claims has estoppel effects; WDTX AND ITC PARALLEL: Judge Albright's district allows parallel litigation efficiently; major tech disputes often run WDTX district court + ITC simultaneously.