About a year ago I commented in my post Patent Venue Goes Back to the Future: TC Heartland LLC v. Kraft Foods Group Brands LLC that the Supreme Court left unanswered the question of “proper venue” for “foreign” corporations in the TC Heartland case.
Basically, TC Heartland held that an action for patent infringement against a U.S. domestic entity must be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business. But, I asked last year, would those restrictions apply to “foreign” corporations?
On May 9, 2018, the Court of Appeals for the Federal Circuit (CAFC) decided that the severe venue restrictions applicable to U.S. companies under TC Heartland do not apply to foreign corporations. Specifically, in 3G Licensing v. HTC Corp. (CAFC case number 2018-130), the Court held that a foreign corporation can be sued in any district in the U.S. The CAFC remarked, “With the Supreme Court having spoken on this issue twice, this court — without clear guidance from Congress — will not broadly upend the well-established rule that suits against alien defendants are outside the operation of the federal venue laws.” In fact, the CAFC noted that if defendant HTC’s argument were followed (that, based on TC Heartland, Delaware was an improper venue for the Taiwan-based company with a subsidiary in Washington state), it would create a loophole in which some foreign companies might be entirely exempt from patent infringement lawsuits.
Thus, patent infringement lawsuits must be brought under strict venue rules for U.S. companies, but forum shopping remains an option against foreign corporations.
As an aside, what if there are other causes of action against the defendant besides a patent infringement claim? Will contract, copyright, trade secret, or other alternative pleadings (including state vs. federal claims) affect venue, or does the patent infringement claim control? Perhaps we’ll know in another year.