Earlier this year, the United States Supreme Court overturned nearly 30 years of precedent that allowed patent owners to bring suit in places other where a potential infringer is incorporated. See TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341, slip op. (S. Ct. May 22, 2017), also discussed here.
The Supreme Court’s previous decision limited where patent venue cases could be filed by holding that a patent suit can be brought where a potential infringer is incorporated, according to the first prong of the patent venue statute, 28 U.S.C. § 1400. The Supreme Court did not address the second prong, which allows patent suits to be brought where a potential infringer “has committed acts of infringement and has a regular and established place of business.” Since the Supreme Court’s decision earlier this year, what constitutes “a regular and established place of business” has been the focus of whether a patent suit could be brought in a particular judicial district.
The Federal Circuit’s decision today, In re: Cray, No. 2017-129 (Fed. Cir. Sept. 21, 2017) provided guidance. The decision limited where patent infringement suits can be filed to where the potential infringer: (1) has a fixed physical place in the district; (2) the place is a regular and established place of business; and (3) the place must be the place of the defendant. In essence, the Federal Circuit rejected the District Court’s reasoning that modern business practices, such as e-commerce, virtual spaces, and telecommuting, should be taken into account to establish where a potential infringer may be sued. In doing so, the Federal Circuit cited to the venue statue and looked at the definition of “place”, using dictionary definitions from 1911 and 1891 to support that a place of business must be a physical place.
Given the Supreme Court’s TC Heartland decision and the Federal Circuit’s In re: Cray decision today, it appears where a potential infringer can be sued is essentially limited to where the potential infringer is incorporated or where it has a physical building.