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TC Heartland LLC v. Kraft Foods Group Brands LLC

Supreme Court of the United States
197 L. Ed. 2d 816, 2017 U.S. LEXIS 3213, 137 S. Ct. 1514 (2017)
ELI5:

Rule of Law:

For purposes of the patent venue statute, 28 U.S.C. § 1400(b), a domestic corporation 'resides' only in its state of incorporation. Amendments to the general venue statute, 28 U.S.C. § 1391, do not alter this specific definition for patent infringement cases.


Facts:

  • TC Heartland LLC is organized under Indiana law and has its headquarters and principal place of business in Indiana.
  • Kraft Foods Group Brands LLC is organized under Delaware law with its principal place of business in Illinois.
  • TC Heartland and Kraft are competitors in the flavored drink mix market.
  • TC Heartland ships its allegedly infringing products directly to a distributor in Delaware.
  • TC Heartland is not registered to do business in Delaware.
  • TC Heartland does not have any offices, facilities, or employees in Delaware, nor does it have a 'regular and established place of business' there.

Procedural Posture:

  • Kraft Foods Group Brands LLC sued TC Heartland LLC in the U.S. District Court for the District of Delaware, alleging patent infringement.
  • TC Heartland, the defendant, moved to dismiss or transfer the case to the Southern District of Indiana, arguing that venue was improper in Delaware.
  • The District Court, as the court of first instance, denied TC Heartland's motion, citing binding precedent from the U.S. Court of Appeals for the Federal Circuit.
  • TC Heartland petitioned the U.S. Court of Appeals for the Federal Circuit for a writ of mandamus to compel the district court to transfer the case.
  • The Federal Circuit, as the intermediate appellate court for patent cases, denied the petition, reaffirming its prior holding that amendments to the general venue statute had broadened the definition of 'resides' in the patent venue statute.
  • The U.S. Supreme Court granted certiorari to review the Federal Circuit's decision.

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Issue:

Does the definition of corporate 'residence' in the general venue statute, 28 U.S.C. § 1391(c), apply to and modify the patent-specific venue statute, 28 U.S.C. § 1400(b)?


Opinions:

Majority - Justice Thomas

No. The expanded definition of corporate residence in the general venue statute does not apply to the specific patent venue statute. The Court's long-standing interpretation from Fourco Glass Co. v. Transmirra Products Corp., which holds that a corporation 'resides' only in its state of incorporation for patent venue purposes, remains controlling law. The Court reasoned that § 1400(b) is a standalone statute intended to be the 'sole and exclusive' provision for patent venue, a principle established in Stonite Products Co. v. Melvin Lloyd Co. and reaffirmed in Fourco. Subsequent amendments to the general venue statute, § 1391, did not contain a clear congressional statement of intent to alter this specific, established interpretation of § 1400(b). The addition of 'for all venue purposes' to § 1391(c) was not materially different from the language in the version of the statute at issue in Fourco. Furthermore, the 2011 amendments added a saving clause, '[e]xcept as otherwise provided by law,' which strengthens the conclusion that specific statutes like § 1400(b) retain their independent meaning.



Analysis:

This decision dramatically narrowed the scope of permissible venues for patent infringement lawsuits against domestic corporations. It overturned decades of Federal Circuit precedent (originating with VE Holding Corp.) that had allowed plaintiffs to sue a corporation in any district where it was subject to personal jurisdiction, effectively anywhere it made substantial sales. As a result, the ruling shifted the geographical center of patent litigation away from districts perceived as plaintiff-friendly, such as the Eastern District of Texas, and concentrated it in districts where many corporations are incorporated (like Delaware) or have major business operations. This created a more predictable, albeit more limited, framework for establishing venue in patent cases.

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