Jeffri A. Kaminski, Venable LLP
The U.S. Court of Appeals for the Federal Circuit’s interpretation of the patent venue statute, 35 U.S.C. § 1400(b), as articulated in TC Heartland LLC v. Kraft Foods Group Brands LLC, has created a degree of uncertainty about the proper place to bring patent infringement suits. For example, see our previous posts on this issue: Supreme Court Alters Patent Venue Landscape: Eastern District Texas No Longer the Heartland of Patent Litigation; and Change in Law of Patent Venue May Not Be Get Out of Texas Card.
In Seven Networks v. Google, Eastern District of Texas Judge Rodney Gilstrap provided direction for litigants bringing or defending suits in venues in which they are not incorporated. Prior to TC Heartland, courts interpreted the patent venue statute broadly and generally allowed suits to be brought in any venue where an allegedly infringing device was sold. After TC Heartland, the venue paradigm has been less clear.
In Judge Gilstrap’s recent decision denying a motion to dismiss for improper venue, Seven Networks attempted to establish venue over Google in the Eastern District of Texas based on servers that allegedly performed a step of a method patent—however, though the servers were owned by Google, a third-party internet-service provider housed them physically. Judge Gilstrap deemed this sufficient to establish venue in the district.
Google argued that the mere ownership of remotely located servers could not meet the venue requirement of TC Heartland, which allows venue only where a defendant has (1) a place of business (2) that is regular, and (3) is established. Google premised its position on a contextual interpretation of the venue statute which states that venue is proper in a judicial district “where the defendant has committed acts of infringement and has a regular and established place of business.” Google argued that, as the statute is written, venue is only proper in a judicial district “where the defendant has committed acts of infringement at their regular and established place of business.” Judge Gilstrap disagreed.
In his opinion, Judge Gilstrap said that such an interpretation would be a “clear substitution of statutory language.” In coming to this conclusion, Judge Gilstrap noted his belief that “the venue statute is designed to protect the defendant against . . . an unfair or inconvenient place of trial.” He concluded that venue was proper because it is not unfair to require a defendant to answer suit in a district wherein a defendant has a regular and established place of business and is alleged to have committed acts of infringement.
Google filed a writ of mandamus with the Federal Circuit seeking immediate appeal of Judge Gilstrap’s venue ruling. On October 28, the court denied the writ.
While TC Heartland may have significantly limited the patent venue statute, at least in Judge Gilstrap’s chambers, a defendant’s alleged act of infringement need not be tied to the venue for jurisdiction to be proper.