In re TC Heartland LLC is a case recently heard before the Federal Circuit and having to do with the venue statute for patent cases, 28 U.S.C. § 1400(b). Specifically, this section indicates that there are two tests for proper venue in a patent case; venue is proper in (1) the district where the defendant resides or (2) the district where the defendant infringed and has a regular place of business.
Another section of title 28, section 1391(c), further provides for a broad definition of residency, broadly including both (1) the district of domicile and (2) any district where the defendant is subject to the court’s personal jurisdiction on the issue of the case.
A 1990 decision, VE Holding Corp. v. Johnson Gas Appliance, 917 F2d 1574 (Fed. Cir. 1990), applied section 1391(c) to patent cases, meaning that venue would be proper in any district in which the defendant infringed. This decision was based on a 1988 amendment to 1391(c), providing that the expanded definition of residency was applicable “for purposes of venue under this chapter,” which the Federal Circuit found also made it applicable to section 1400(b). Critics allege that this holding has led to forum-shopping, typically leading plaintiffs to sue in the Eastern District of Texas (which has a reputation as being friendly to patent owners).
Petitioners in TC Heartland argue that VE Holdings was wrongly decided, and in the alternative that a recent 2011 amendment to section 1391(c) (repealing the “for purposes of venue under this chapter” and instead adding in that the statute applies in all civil cases “except as otherwise provided by law”) overrules VE Holdings.
At oral arguments on Friday, the judges on the three-judge panel appeared to be in favor of leaving modification to the venue laws to Congress, with Judge Kimberly Moore suggesting that Congress would be better suited to making such a policy decision. Several senators have in fact drafted a bill to do this, entitled the “Venue Equity and Non-Uniformity Elimination Act of 2016.”