Federal Circuit Tightens Patent Venue Rules

2017 has proven to be an important year in patent infringement litigation. One of the most noteworthy developments is the fundamental change to patent venue provisions that the Supreme Court introduced with its landmark decision in TC Heartland v. Kraft Food Group Brands LLC, and the subsequent Federal Circuit decision in In re Cray. Taken together, they have significantly narrowed the range of venues a plaintiff can choose from.

Rather than leaving the application of TC Heartland largely to judge’s discretion, the Federal Circuit set forth its own three-part test for determining patent venue. First, it clarified that a defendant must have a physical presence in the district in which a patent suit is brought. Second, business must be carried on in the district at issue on a regular and not temporary basis. Third, the Federal Circuit explained that venue cannot be proper in a district that is solely the place of one of the defendant’s employees. The place of business must be that of the defendant.

The Federal Circuit’s decision in In re Cray also reaffirms the shift in patent venue trends signaled by TC Heartland. It is almost certain that the number of patent infringement actions in the Eastern District of Texas will continue to plummet.

Some estimates project a 23 percent increase in cases brought in the District of Delaware and a nearly 300 percent increase in cases brought in the Northern District of California.