Corporate Residence Definition in Patent Cases Unchanged by Congressional Revisions to Venue Statute; Minimum Contacts Under Beverly Hills Fan Reaffirmed


In re TC Heartland LLC, __ F.3d __ (Fed. Cir. Apr. 29, 2016) (MOORE, Linn, Wallach) (D. Del.: Stark)

Fed Cir denies petition for writ of mandamus that sought to require the district court to dismiss or transfer Delaware litigation against Indiana-based defendant, reaffirming VE Holding and Beverly Hills Fan as to corporate residence and specific jurisdiction, respectively.

VENUE: Fed Cir declines to reverse holding that TC Heartland "resides" in Delaware for venue purposes. TC Heartland had no Delaware business registration or offices but occasionally shipped accused products into Delaware. Under VE Holding Corp. v. Johnson Gas Appliance Corp., 917 F.2d 1574 (Fed. Cir. 1990), such activity was sufficient to establish venue under the general venue statute, 28 U.S.C. § 1391.

Prior to VE Holding, "residence" for venue purposes in patent cases was held to mean the state of a defendant's incorporation. But the Judicial Improvements and Access to Justice Act, Pub. L. No. 100-702, 102 Stat. 4642, 4669 (1988), revised § 1391 in such a way that the definition of "residence" for venue purposes in patent cases changed. VE Holding held that venue in patent cases, as in other cases, would be appropriate in any district where the defendant was subject to personal jurisdiction at the time the suit was commenced. 917 F.2d at 1584.

TC Heartlands' argument, which the Fed Cir rejected, was that amendments to the venue statute in the Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112-63, 125 Stat. 758 (2011), had abrogated VE Holding and restored the status quo ante. TC Heartland argued that these amendments essentially codified the 1957 Supreme Court decision Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), which had governed venue in patent cases pre-VE Holding. Rejecting that argument, the Fed Cir held that Congress's 2011 addition of the phrase "except as otherwise provided by law" to § 1391, even if such a statement could invoke prior Supreme Court cases, would not in any event invoke Fourco, as Fourco had been superseded by earlier Congressional action and was not legally operative. As a result, VE Holding remained settled precedent and confirmed the propriety of venue in Delaware.

SPECIFIC PERSONAL JURISDICTION: Fed Cir rejects TC Heartland's specific jurisdiction arguments that the footnote in the Supreme Court's recent decision in Walden v. Fiore, 134 S. Ct. 1115, 1121 n.6 (2014), overturned the minimum contacts requirement set forth in Beverly Hills Fan, 21 F.3d 1558. The opinion reaffirms that a district court in a patent infringement action with personal jurisdiction over one alleged act of patent infringement has jurisdiction over all such acts nationwide. In other words, a forum state can hear claims for infringing acts occurring outside of the forum state. This approach is consistent with the due process requirement that a forum's assertion of jurisdiction be reasonable, because allowing a plaintiff to seek redress in a single forum state spares other states the burden of also having to provide such a forum and protects defendants from being harassed with multiple infringement suits. As to TC Heartland's infringing acts in Delaware, TC Heartland did not dispute that it shipped the accused product directly into Delaware and thus satisfied the minimum contacts required under Beverly Hills Fan.