Insight

New Rules for Patent Venue

Where can you be sued for patent infringement?

Patent Venue
MF

Michael B. Fein

December 14, 2017 11:05 AM

The landscape is changing for venue in patent litigation. According to 28 U.S. Code § 1400(b)[1], “[a]ny civil action for patent infringement 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.” A corporation “resides” in the state where it is incorporated, as the Supreme Court made clear earlier this year.

For many years, the courts permitted patent infringement suits to be brought in the federal judicial district where infringement has occurred, which meant practically anywhere for companies with national sales, and more often than not, in the Eastern District of Texas, where patent litigators believe the court is most patent-friendly. However, that is no longer the case. Now an alleged infringer can only be sued where it has a regular[2] and established[3] place[4] of business.

If any statutory requirement is not satisfied, venue is improper under § 1400(b), and if venue is improper, the defendant can move to transfer to a district where venue is proper.

According to In re: Cray, (Fed. Cir., 2017), which was decided on September 21, 2017, the “place of business” must be a place of the defendant, not solely a place of the defendant’s employee, even if the employee has a home office in the district from which they regularly conduct the employer’s business. The defendant must own or lease the facility, such as an office of a factory in the district where it is sued.

Cray, which was sued in the Eastern District of Texas, employed a sales manager who resided in his home there. The sales manager received reimbursement for his cell phone usage for business purposes, internet fees, and mileage or “other costs” for business travel. Cray provided the manager with “administrative support” from its Minnesota office. The manager provided “price quotations” to customers, listing himself as the “account executive” and the person who prepared the quotation and listed his home telephone number as his “office” telephone number with an Eastern District of Texas area code. The manager did not maintain Cray products at his home nor did he maintain product literature at his home because it was available online. Cray never paid the manager for the use of his home to operate its business or publicly advertised or otherwise indicated that his home residence was a Cray place of business.

Although the U.S. District Court held the manager’s residence and activities were enough to find venue in the Eastern District, the Court of Appeals for the Federal Circuit reversed the district court and held that the sales manager’s residence was not a place of business of Cray.

For defendants that do not have a “regular and established place of business” in the Eastern District of Texas or in other supposedly patent-friendly districts, venue will no longer be proper there.[5]

---------------------------

[1] Through a predecessor statute, this statute goes back to 1897.

[2] A business may be “regular,” for example, if it operates in a “steady[,] uniform[,] orderly[, and] methodical” manner. In re: Cray, 2017-129 (Fed. Cir., 2017).

[3] “Established” contains the root “stable,” indicating that the place of business is not transient. It directs that the place in question must be “settle[d] certainly, or fix[ed] permanently.” Establish, Black’s Law Dictionary (1st ed. 1891).

[4] The statute requires a “place,” i.e., “[a] building or a part of a building set apart for a purpose” or “quarters of any kind” from which business is conducted. * * * The statute thus cannot be read to refer merely to a virtual space or to electronic communications from one person to another. In re: Cray, 2017-129 (Fed. Cir., 2017)

[5] Unless, of course, the defendant is incorporated in the patent-friendly district.

---------------------------

Michael B. Fein focuses much of his practice on obtaining U.S. and international patent protection of inventions, enforcing and licensing patents, and avoiding infringement of competitors’ patents. He also advises clients on evaluating intellectual property assets and counsels on acquisitions, licensing, and collaboration agreements. In addition, Fein represents clients in courts throughout the U.S. in patent, trademark, copyright, and trade secret litigation. Previously, Fein was in-house patent and trademark counsel at a Fortune 100 chemical company and a patent examiner at the U.S. Patent and Trademark Office. Fein earned his J.D. at Rutgers University Law School and his A.B. from the University of Pennsylvania.

Related Articles

Fair Enough: The “Fair Use” Defense to Trademark Infringement


by Aaron Haar and Maria Crimi Speth

There are two arguments for fair use in a trademark infringement case. Here's your guide to understanding both.

Fair Use in Trademark Infringement

New Greek Copyright Law


by Kriton Metaxopoulos

The procedure applies only to infringements committed by users who make available to the public and upload content or works for which they do not own/control the copyrights. However, it does not apply to infringements committed by end users by downloading, peer to peer file sharing, streaming, or cloud computing.

Greek Copyright Law

Trending Articles

2025 Best Lawyers Awards Announced: Honoring Outstanding Legal Professionals Across the U.S.


by Jennifer Verta

Introducing the 31st edition of The Best Lawyers in America and the fifth edition of Best Lawyers: Ones to Watch in America.

Digital map of the United States illuminated by numerous bright lights

Unveiling the 2025 Best Lawyers Awards Canada: Celebrating Legal Excellence


by Jennifer Verta

Presenting the 19th edition of The Best Lawyers in Canada and the 4th edition of Best Lawyers: Ones to Watch in Canada.

Digital map of Canadathis on illuminated by numerous bright lights

Legal Distinction on Display: 15th Edition of The Best Lawyers in France™


by Best Lawyers

The industry’s best lawyers and firms working in France are revealed in the newly released, comprehensive the 15th Edition of The Best Lawyers in France™.

French flag in front of country's outline

Announcing the 13th Edition of Best Lawyers Rankings in the United Kingdom


by Best Lawyers

Best Lawyers is proud to announce the newest edition of legal rankings in the United Kingdom, marking the 13th consecutive edition of awards in the country.

British flag in front of country's outline

Announcing the 16th Edition of the Best Lawyers in Germany Rankings


by Best Lawyers

Best Lawyers announces the 16th edition of The Best Lawyers in Germany™, featuring a unique set of rankings that highlights Germany's top legal talent.

German flag in front of country's outline

Prop 36 California 2024: California’s Path to Stricter Sentencing and Criminal Justice Reform


by Jennifer Verta

Explore how Prop 36 could shape California's sentencing laws and justice reform.

Illustrated Hands Breaking Chains Against a Bright Red Background

Celebrating Excellence in Law: 11th Edition of Best Lawyers in Italy™


by Best Lawyers

Best Lawyers announces the 11th edition of The Best Lawyers in Italy™, which features an elite list of awards showcasing Italy's current legal talent.

Italian flag in front of country's outline

Combating Nuclear Verdicts: Empirically Supported Strategies to Deflate the Effects of Anchoring Bias


by Sloan L. Abernathy

Sometimes a verdict can be the difference between amicability and nuclear level developments. But what is anchoring bias and how can strategy combat this?

Lawyer speaking in courtroom with crowd and judge in the foreground

Things to Do Before a Car Accident Happens to You


by Ellie Shaffer

In a car accident, certain things are beyond the point of no return, while some are well within an individual's control. Here's how to stay legally prepared.

Car dashcam recording street ahead

The Push and Pitfalls of New York’s Attempt to Expand Wrongful Death Recovery


by Elizabeth M. Midgley and V. Christopher Potenza

The New York State Legislature recently went about updating certain wrongful death provisions and how they can be carried out in the future. Here's the latest.

Red tape blocking off a section of street

Tampa Appeals Court ‘Sends Clear Message,” Ensuring School Tax Referendum Stays on Ballot


by Gregory Sirico

Hillsborough County's tax referendum is back on the 2024 ballot, promising $177 million for schools and empowering residents to decide the future of education.

Graduation cap in air surrounded by pencils and money

Find the Best Lawyers for Your Needs


by Jennifer Verta

Discover how Best Lawyers simplifies the attorney search process.

A focused woman with dark hair wearing a green top and beige blazer, working on a tablet in a dimly

Key Developments and Trends in U.S. Commercial Litigation


by Justin Smulison

Whether it's multibillion-dollar water cleanliness verdicts or college athletes vying for the right to compensation, the state of litigation remains strong.

Basketball sits in front of stacks of money

Is Premises Liability the Same as Negligence?


by Jeremy Wilson and Taylor Rodney Marks

In today's age, we are always on the move, often inhabiting spaces we don't own. But what happens when someone else's property injures you or someone you know?

A pair of silhouetted legs falling down a hole with yellow background

Woman on a Mission


by Rebecca Blackwell

Baker Botts partner and intellectual property chair Christa Brown-Sanford discusses how she juggles work, personal life, being a mentor and leadership duties.

Woman in green dress crossing her arms and posing for headshot

Best Lawyers Celebrates Women in the Law: Ninth Edition


by Alliccia Odeyemi

Released in both print and digital form, Best Lawyers Ninth Edition of Women in the Law features stories of inspiring leadership and timely legal issues.

Lawyer in green dress stands with hands on table and cityscape in background