Background
TC Heartland, an Indiana company that manufactured liquid beverage enhancers, was sued for patent infringement by Kraft Foods Group Brands in the District of Delaware — where TC Heartland had no facilities, employees, or physical presence. Kraft chose Delaware simply because TC Heartland sold its products there through nationwide distribution, making it subject to personal jurisdiction in Delaware under the general personal-jurisdiction-as-venue rule the Federal Circuit had established in VE Holding Corp. v. Baker Hughes (1990).
Under the patent-specific venue statute, 28 U.S.C. § 1400(b), a patent infringement suit may 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.” The question was whether “resides” for a domestic corporation meant only its state of incorporation (a narrow reading consistent with the Supreme Court’s 1957 decision in Fourco Glass) or wherever the corporation was subject to personal jurisdiction (the broad rule VE Holding had adopted in 1990).
TC Heartland moved to transfer to Indiana. The district court denied the motion, and TC Heartland petitioned the Federal Circuit for a writ of mandamus ordering the transfer.
The Court’s Holding
The Federal Circuit denied mandamus, holding that its own precedent in VE Holding — which interpreted “resides” to mean wherever a defendant is subject to personal jurisdiction — remained binding. The court acknowledged that the Supreme Court’s 1957 Fourco Glass decision had held that “resides” in § 1400(b) means only state of incorporation for domestic corporations. But VE Holding had concluded that Congress implicitly amended § 1400(b) when it amended the general venue statute (28 U.S.C. § 1391) in 1988 to equate “residence” with personal jurisdiction. The Federal Circuit followed its own VE Holding precedent and denied the petition.
The court’s refusal to revisit VE Holding left in place the framework that allowed plaintiffs to sue domestic corporations for patent infringement in any district where the defendant sold products — which, for most consumer product companies, meant virtually any district in the country. This had fueled rampant forum shopping, particularly to the Eastern District of Texas, which had become the preferred venue for patent plaintiffs due to its plaintiff-friendly procedures and local-rule advantages.
Key Takeaways
- The Federal Circuit denied mandamus and affirmed that VE Holding’s broad venue rule — a domestic corporation can be sued for patent infringement wherever it is subject to personal jurisdiction — remained binding Federal Circuit law.
- The decision preserved the then-existing patent venue landscape that had concentrated patent litigation in the Eastern District of Texas and a few other plaintiff-friendly forums.
- The Supreme Court unanimously reversed in TC Heartland v. Kraft Foods Group Brands (2017), holding that Fourco Glass was correct and that § 1400(b)’s “residence” requirement for domestic corporations means only the state of incorporation.
- The Supreme Court’s 2017 reversal dramatically shifted patent litigation geography, causing a major decline in filings in the Eastern District of Texas and a corresponding rise in Delaware and the Northern District of California.
Why It Matters
TC Heartland is arguably the most practically significant patent procedural ruling of the 2010s. For decades, the Eastern District of Texas handled a disproportionate share of U.S. patent litigation because of VE Holding’s broad venue rule. Patent plaintiffs could file there against any defendant that sold products in the district — which encompassed virtually every U.S. company. The Eastern District’s plaintiff-friendly rules, fast docket, and jury composition made it a magnet for patent litigation, particularly by non-practicing entities.
The Supreme Court’s reversal restored § 1400(b)’s original narrow meaning, limiting venue to the defendant’s state of incorporation or a district where it has committed infringement AND has a regular established place of business. The practical impact was immediate and dramatic: patent filings in the Eastern District of Texas plummeted, and defendants headquartered in California, Texas, or Delaware found themselves defending suits closer to home. The Federal Circuit’s 2016 denial of mandamus is the moment the court declined to fix the venue problem — and handed the question to the Supreme Court.