Is East Texas Losing Its Patent Litigation Reign?

Yesterday, the Supreme Court heard oral arguments in TC Heartland v. Kraft Foods Group Brands LLC concerning venue in patent litigation.

As with most arguments at the Supreme Court, the arguments themselves are merely a window into what the Court is interested in and are not a reliable guide as to how the Court will ultimately rule on the issue.

TC Heartland’s counsel was questioned on the basic issue of what effect, if any, the 1988 and 2011 amendments to Sec. 1391 had on the definition of “resident” in Sec. 1400.  Given the lack of legislative history on the underlying issue in either the 1988 or 2011 amendments, the facially significant change, but Fourco’s statement that Sec. 1391 and 1400 were independent, Judge Kagan asked: “What do you think Congress would have to do to reverse our decision in Fourco?  – “Is there any way Congress could do it without repealing 1400?”  In addition, there was questioning about how Sec. 1400 would read on unincorporated associations and whether an answer by the Supreme Court would resolve venue in the TC Heartland case.  Judge Kagan also noted that it has been nearly 30 years since VE Holdings and what impact the long period of time Fourco has been ignored should have.

Kraft’s counsel was questioned on whether Kraft waived the “unincorporated association” issue by not raising it earlier.  Likewise, Kraft’s counsel was questioned on whether its proposed reading rendered parts of Sec. 1400 surplusage (particularly Sec. 1400(b)).  There was also general discussion about the situation in the Eastern District of Texas.  In response to Kraft’s counsel’s claim that some entities would still be subject to suit in Texas, Chief Justice Roberts commented: “So we shouldn’t worry that 25% of the nationwide cases are there?”

As a general matter, it appears that Kraft came in for more substantive and skeptical questioning.  Although the situation in Texas does not really go to the merits of the issue before the Court, it does appear to impact how the issues are perceived and whether Congress really could have intended that result.  Absent extraordinary circumstances, a decision should come before the end of June, when the current Supreme Court term ends.

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