The Supreme Court is about to tell us where we can bring a patent lawsuit.
There is a case pending before the U.S. Supreme Court currently on this issue. Oral argument is scheduled for March 27, 2017.
The case is In re TC Heartland.
The law for nearly the last 30 years (since VE Holding, 1990), has been that an infringer is subject to suit any place in which it is subject to personal jurisdiction. Selling infringing product into a district generally is sufficient to find personal jurisdiction. So, for example, an accused infringer who has nationwide sales can generally be sued in any state in the country.
A patentee has typically chosen one of two routes: a) suing in the patentee’s home district (e.g., 3M suing in District of Minnesota court), or b) suing in what is seen as a favorable location – known as “forum shopping.” Forum-shopping has created certain pockets of high density for patent litigation, most notably, the Eastern District of Texas, where jury verdicts in favor of plaintiffs have historically been higher than the national average.
The TC Heartland case could change all that. The question before the Supreme Court is whether the current view is correct, or whether it should be restricted to a rule that accused infringers may only be sued in a district (state) where they are more traditionally doing business (such as where their headquarters are located).
In TC Heartland, the district court (in Delaware) and the appeals court (the Federal Circuit) held that the accused infringer could be sued in Delaware, a district in which the accused infringer’s presence essentially amounted to shipping infringing product totaling about 2% of its total sales for that year.
If the Supreme Court disagrees, the practice that has been in effect for nearly the past 30 years may change. And if it does disagree, this won’t be the first time the Supreme Court has disagreed with the Federal Circuit.
One wonders if this is all still in (over)reaction to patent trolls?