Academic journal article Harvard Law Review

Venue Statutes - Patent Suits - Definition of Corporate Residence - TC Heartland LLC V. Kraft Foods Group Brands LLC

Academic journal article Harvard Law Review

Venue Statutes - Patent Suits - Definition of Corporate Residence - TC Heartland LLC V. Kraft Foods Group Brands LLC

Article excerpt

Congress governs the location of civil suits through a general venue statute (1) and various specialized venue statutes. (2) One of these specialized statutes governs venue for patent infringement actions. (3) Before last Term, the Supreme Court had twice held that the patent venue statute was the "exclusive provision controlling venue in patent infringement actions." (4) In both cases, the Court arrived at its holding after examining the purposes of Congress's venue legislation. The second time around, the patent venue statute's exclusivity meant that a defendant corporation "resides" only in its state of incorporation for venue purposes in patent suits. (5) Last Term, in TC Heartland LLC v. Kraft Foods Group Brands LLC, (6) the Supreme Court again held that a defendant corporation "resides" only in its state of incorporation for venue purposes in patent suits. (7) Specifically, nothing in the text of the most recent amendments to the general venue statute (8) clearly signaled Congress's intent to overturn the Court's settled construction of the patent venue statute as exclusive. (9) An instructive irony underlies TC Heartland: a text-focused clear statement rule led the Court to uphold a purposivist construction of a statutory scheme. This irony ought to motivate textualist judges to enforce the best textual readings of amended statutory schemes instead of requiring a clear statement of Congress's intent to overrule preamendment judicial constructions of these schemes.

In 2014, Kraft Foods filed a patent infringement lawsuit against TC Heartland in the District of Delaware. (10) TC Heartland is a limited liability company allegedly incorporated in Indiana and with headquarters there. (11) TC Heartland filed a motion to dismiss for lack of personal jurisdiction and to transfer venue to the Southern District of Indiana. (12) The transfer of venue claim depended on where TC Heartland "resides" (13): If the patent venue statute applied exclusively, venue would lie in Indiana where the company was allegedly incorporated. (14) But if the general venue statute supplemented the patent venue statute, venue could also be proper in the District of Delaware so long as TC Heartland was within that court's personal jurisdiction. (15)

Whether the general venue statute supplements the patent venue statute had been litigated twice before at the Supreme Court. Both times, the Court answered this question in the negative. In Stonite Products Co. v. Melvin Lloyd Co., (16) if the patent venue statute was independent of the general venue statute, then venue was proper only where the defendant was an "inhabitant" (that is, the defendant's state of incorporation (17)), or where the defendant allegedly infringed and had a "regular and established place of business." (18) If it was not indepen-dent, venue could lie in other districts as well. (19) The Court opined that the "scope" of the patent venue statute could "best be determined from an examination of the reasons for its enactment." (20) Relying heavily on a House report and a Congressman's remarks, (21) the Court determined that "Congress did not intend [the patent venue statute] to dovetail with the general provisions relating to the venue of civil suits." (22) Thus, the patent venue statute "[wa]s the exclusive provision controlling venue in patent infringement proceedings." (23)

The Court reaffirmed Stonite fifteen years later in Fourco Glass Co. v. Transmirra Products Corp. (24) In the intervening time, Congress had revised and recodified the Judicial Code. The patent venue statute, [section] 1400(b), now looked to where the defendant "resides" (25) instead of where the defendant "inhabits." The general venue statute now defined "residence ... for venue purposes" as the state of incorporation or wherever a company was "licensed to do business or [wa]s doing business." (26) Drawing largely on the Revisers' Notes, Fourco found that Congress had not intended any "substantive change" in the venue statutes, (27) so [section] 1400(b)'s use of "resides" retained the prerevision meaning of "inhabitant"--the state of incorporation only. …

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