TC Heartland LLC v. Kraft Food Grp. Brands LLC
137 S. Ct. 1514 (2017)
Authored by Damos R. Anderson
Statement of Facts: Incorporated and headquartered in Indiana, TC Heartland LLC, the petitioner, manufactures water enhancer mixes. Incorporated in Delaware with its principal place of business in Illinois, Kraft Food Group Brands LLC is TC’s competitor. Kraft, alleging a patent violation, brought a patent infringement suit against TC in the District Court for the District of Delaware.
“The patent venue statute, 28 U.S.C. § 1400(b), provides that 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.” TC Heartland LLC v. Kraft Food Group Brands LLC, 137 S. Ct. 1514, 1517 (2017) (internal quotations omitted). Relying on the Transmirra Prods. Corp. v. Fourco Glass Co. interpretation of § 1400(b), which holds a corporation resides only in its incorporating State, the petitioner moved to dismiss the case or transfer venue to the District Court for the Southern District of Indiana. 353 U.S. 222 (1957).
Procedural History: The district court rejected the petitioner’s motion and the Federal Circuit refused to issue a writ of mandamus. The Federal Circuit held that amendments to the general venue statute, 28 U.S.C. § 1391(c), defines “resides” for § 1400(b) and therefore the district court had personal jurisdiction over the petitioner. The Supreme Court granted cert after TC appealed the decision.
Question Presented: What is the proper venue for a domestic corporation in a patent infringement dispute?
Holding: Section 1400(b) exclusively defines venue for domestic corporations in patent infringement suits. Venue is proper in the State of incorporation only. The Court reversed the judgment of the Federal Circuit and remanded the case for further proceedings consistent with its opinion.
Reasoning: In 1897, to resolve an earlier patent venue dispute, Congress enacted § 1400(b)’s predecessor, a patent specific venue statute. The Court reasoned that this placed patent infringement cases in its own class separate and apart from general venue. The Court confirmed this view in Stonite Products Co. v. Melvin Lloyd Co., where it held that the patent venue statute alone, separate and apart from the general venue statute, controlled patent infringement suits. 315 U.S. 561 (1942).
Section 1400(b)’s predecessor statute gave jurisdiction to the district the defendant inhabited (incorporated in), maintained a regular and established place of business, or committed an act of infringement. Congress recodified that statute in 1948 to its current § 1400(b) form which merely replaces the word inhabited with the word resides. The Court has interpreted those two words to mean the same thing. Fourco, 353 U.S. at 226. Also in 1948, Congress enacted the general statute § 1391(c), which defined residence for venue purposes in all actions as the state of incorporation, the location the business license, or any judicial district of business operations. Courts differed on if § 1391(c) defined “resides” for § 1400(b) but the Court in Fourco again confirmed that § 1400(b) is a complete and independent statute for patent infringement suits. Id. at 229. Congress has not amended § 1400(b) since the decision in Fourco.
“Congress amended the general venue statute, § 1391(c), to provide that for purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.” Heartland, 137 S. Ct. at 1519 (internal quotations omitted emphasis added). Because § 1400(b) and § 1391 are in the same chapter, the Federal Circuit took this to be an explicit intention to redefine § 1400(b)’s definition of reside. See VE Holding Corp. v. Johnson Gas Appliance Co., 917 F. 2d 1574, 1578–80 (1990). Congress again amended § 1391(a) in 2011, adding the provision “except as otherwise provided by law . . . this section shall govern the venue of all civil actions brought in district courts of the United States.” The Federal Circuit did not see the amendments as cause to alter its prior decision in VE Holding.
The Court here, took this case and reaffirmed its past holdings, that § 1400(b) is exclusive to patent infringement suits and is separate and apart from § 1391. The respondents did not persuade the Court that Congress intended to change this interpretation. Section 1400(b) retains the same meaning it has always had and the Court noted that ordinarily if Congress wanted to make a change to such a set interpretation they would not do so by implication. Respondent’s argument that § 1391 is binding on § 1400(b) because § 1391 contains the words “all venue purposes” was not helpful. The Court interpreted the previous version of § 1391 to implicitly mean the same thing and still held § 1400(b) to be exempt. The Court saw no reason to change this interpretation particularly in light of the saving clause, which makes the rationale of the Federal Circuit weaker. The saving clause of § 1391 states, “otherwise provided by law”. This recognizes that portions of the chapter were to be exempt. The patent infringement specific § 1400(b) is one such section.