Congress Stopped Short in Amending the Law of Venue in Patent Infringement Cases: VE Holding Corp. V. Johnson Gas Appliance Co
Gibby, Darin J., Brigham Young University Law Review
In 1988, Congress redefined the term "reside' in the general venue statute, 28 U.S.C. sec1391(c),(1) as it applies to corporate defendants. In VE Holding Corp. v. Johnson Gas Appliance Co.,(2) this new definition was applied to a corporate defendant in patent infringement suit by reading the definition into the patent venue statute.(3) By applying the definition to corporations in patent infringement cases, the Court of Appeals for the Federal Circuit changed the 100 year-old basis for appropriate venue in patent infringement cases from the jurisdiction where the defendant resides to where personal jurisdiction may be obtained.(4)
The major argument in favor of applying the new definition to patent infringement cases is to bring the venue provisions in patent infringement cases "more in line with venue law generally, as well as with other types of patent litigation."(5) Although the 1988 amendment of the general venue statute as interpreted in VE Holding did make the law of venue in patent cases more consistent with venue laws generally, Congress should have repealed the patent venue statute, thereby placing all types of patent litigation under the general venue statute. Because the 1988 amendment to the general venue statute is expressly limited to corporations, the repeal of the patent venue statute is necessary to eliminate the inconsistencies that now exist in patent venue litigation.
Consequently, this note analyzes how venue law in patent infringement cases has changed as a result of the interpretation given in VE Holding and discusses the practical effects of those changes More specifically, this note examines the inconsistencies and problems resulting from Congress's decision to make only part of the law of venue in patent cases consistent with general venue law.(6) The note concludes that, in order to make venue law in patent cases consistent with general venue law, Congress should repeal the patent venue statute.
Appropriate venue for patent infringement cases, as now set forth in 28 U.S.C. sec1400(b),(7) has remained virtually unchanged for nearly 100 years.(8) In Fourco Glass Co. v. Transmirra Products Corp.,(9) the Supreme Court held that sec1400(b) was the exclusive venue statute for patent infringement cases."(10) Under sec1400(b) venue is appropriate in patent infringement cases when either of two tests is met: (1) the defendant resides in the judicial district, or (2) "the defendant has committed acts of infringement and has a regular and established place of business."(11) This section continues to govern patent infringement cases notwithstanding the general venue statute codified in 28 U.S.C. sec1391(c).(12)
Prior to VE Holding, the term "resides" as applied to a corporate defendant in the first prong of sec1400(b) meant the defendant's state of incorporation only."(13) At the time Fourco was decided, sec1391(c) stated that a "corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes."(14) The plaintiffs in Fourco argued that sec1391(c) supplemented the provisions in sec1400(b) and that the defendant could be sued where it was doing business, not just the state of incorporation.(15) The Court, however, rejected this argument and held that sec1391(c) did not supplement the specific venue provisions of sec1400(b).(16)
After receiving pressure from the bar and the courts,(17) Congress amended sec1391(c) in 1988 and thereby introduced two significant changes.(18) The first change affected how the general venue statute of sec1391(c) applies to other sections in the chapter. Section 1391(c) now begins with the phrase, "For purposes of venue under this chapter...."(19) Because sec1400(b) is within the same chapter as sec1391(c), the 1988 amendment applies to sec1400(b) as well. …