SALVAGING THE LAW OF PATENT VENUE: BRUNETTE, TC HEARTLAND, AND THE VENUE CLARIFICATION ACT.

Author:Bagheri, Camron
 
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INTRODUCTION 1024 I. VENUE HISTORY 1025 II. A CLOSER LOOK AT TC HEARTLAND AND BRUNETTE 1029 A. TC Heartland: [section] 1400(b) Still Stands Alone 1029 B. Brunette: Suits Against Aliens Are Beyond All Venue Protections 1033 C. The Problem: Brunette Butts Heads with TC Heartland and Seemingly Contradicts the Venue Clarification Act 1036 1. Under Brunette and TC Heartland, Does [section] 1400(b) Really Stand Alone? 1036 2. Does Brunette's Rationale Stili Apply? 1038 III. POSSIBLE RESOLUTIONS 1040 A. Brunette Untouched 1041 B. Brunette Overruled 1043 C. Brunette Tweaked 1045 CONCLUSION 1049 INTRODUCTION

This Comment investigates some newfound problems plaguing the law of patent venue in the wake of the Supreme Court's recent decision in TC Heartland v. Kraft Foods Group Brands. In TC Heartland, the Court constricted the set of districts in which domestic corporations may be sued for patent infringement and, in doing so, reaffirmed that patent venue is governed exclusively by 28 U.S.C. [section] 1400(b) and is not to be supplemented in any way by the general venue provisions of 28 U.S.C. [section] 1391. The Court, moreover, explicitly declined to address patent venue for foreign corporate defendants or foreign defendants generally. Many courts and commentators thus assumed that foreign defendants may still be sued in any judicial district because, as explained by the Court in Brunette Machine Works v. Kockum Industries, alien defendants are wholly outside the protection of the venue statutes. However, the Federal Courts Jurisdiction and Venue Clarification Act of 2011 affirmatively gave permanent resident aliens domiciled in the United States a venue defense, thereby challenging a central pillar of Brunette's reasoning.

This Comment explores the tensions lurking between Brunette, TC Heartland, and the 2011 Venue Clarification Act and examines some potential resolutions available to the Court. First, Part I describes the history of the general and patent venue statutes, beginning with the first venue provision in the Judiciary Act of 1789. Part II then examines the facts, holdings, and reasonings of TC Heartland and Brunette in detail and explicitly identifies the primary problems and inconsistencies currently existing in the law of patent venue. Finally, Part III examines three potential solutions--affirming, overruling, or tweaking Brunette--that the Court could use to address these problems.

Ultimately, this Comment argues that the best solution would be for the Court to simply adjust the holding of Brunette, which currently states that all aliens lack venue protections, to state that all nonresidents lack venue protections. This would eliminate the possibility of venue gaps while simultaneously respecting Congress's clear manifestation of intent to universally shift the focus of venue law from alienage to residence. Such a move, however, would amount to using [section] 1391(c)(1) and (c)(3), which grant aliens venue defenses and shift the focus of venue to residence, to supplement [section] 1400(b). This seemingly contravenes TC Heartland, which held that [section] 1391(c)(2), which defines corporate residence in terms of personal jurisdiction, does not supplement [section] 1400(b).

An appropriate justification for such an analytical move is presented, however. Since it has been historically normal for [section] 1391 and [section] 1400(b) to have different definitions of corporate residence, Congress's act of amending the definition of corporate residence in the general venue statute did not signal an intent to work the same change in the patent venue statute. On the other hand, because it has been historically normal for [section] 1391 and [section] 1400(b) to have the same definition of natural-person residence and to treat alien defendants in the same way, Congress's act of amending [section] 1391(c)(1) and (c)(3) arguably signaled a much stronger intent to work the same change in [section] 1400(b).

  1. VENUE HISTORY

    A brief review of the history of the venue statutes will help in analyzing the current state of patent venue law. (1) The first venue provision was established by the Judiciary Act of 1789. It provided that suits "against an inhabitant of the United States" could be brought only in judicial districts "whereof [the defendant] is an inhabitant, or in which he shall be found." (2) Because of this language, venue protection did not extend to foreign defendants--those who were not inhabitants of the United States. (3) This section of the 1789 Act also provided a minimum amount-in-controversy requirement and applied only to cases in which the federal and state courts had concurrent jurisdiction. (4)

    After nearly a century without change, Congress twice amended this provision. First, in 1875, Congress replaced the phrase "against an inhabitant of the United States" with "against any person." (5) Second, in 1887, Congress increased the minimum amount in controversy and removed the provision providing proper venue where a defendant may be found. (6)

    Although the phrase "against any person" would seem to have broadened the applicability of the venue statute to all persons rather than just inhabitants of the United States, the Supreme Court in In re Hohorst declared the change to be stylistic only. (7 )To support this position, the Court stressed that any other interpretation would immunize foreign defendants from suit since aliens, by definition, do not inhabit any judicial district. (8) Thus, the Court held that foreign defendants--both natural persons and corporations--still lacked venue protections and could therefore be sued anywhere. (9)

    The Hohorst opinion, however, further supported its ruling by noting the inconsistency of applying the general venue statute to patent cases. (10) Since the general venue statute had a minimum amount-in-controversy requirement and applied only to cases where state courts had concurrent jurisdiction, it could not reach patent suits, the Court implied, since patent cases required no minimum amount in controversy and were exclusively under federal jurisdiction. (11) This caused great confusion among the lower courts as to whether the venue laws applied to patent suits at all. (12)

    In response to this rampant confusion, Congress enacted the Patent Statute of 1897, which provided that patent suits could be brought "in the district of which the defendant is an inhabitant, or in any district in which the defendant... shall have committed acts of infringement and have a regular and established place of business." (13) In Stonite Products Co. v. Melvin Lloyd Co., the Court recognized that Congress enacted this law to eliminate lower court confusion by "defin[ing] the exact jurisdiction of the federal courts in actions to enforce patent rights." (14) So, the Court held that the patent venue statute was the exclusive venue provision for patent suits, "not intend[ed]... to dovetail with the general [venue] provisions." (15)

    In 1948, Congress recodified the venue statutes. The new patent venue law, 28 U.S.C. [section] 1400(b), provided that venue was proper "where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business." (16) Thus, the focus shifted from inhabitance to residence. The new general venue law, 28 U.S.C. [section] 1391, stated that "[a]n alien [could] be sued in any district" (17) and expanded the definition of corporate residence, previously only the state of incorporation, (18) to "any judicial district in which it is incorporated or licensed to do business or is doing business." (19)

    Despite these amendments, the Court in Fourco Glass Co. v. Transmirra Products Corp. held that venue in patent cases had not been substantively changed. (20) First, the Court noted that, because "inhabitant" and "resident" are "synonymous words [that] mean domicile" the codification of [section] 1400(b) did not substantively affect patent venue. (21) Second, because [section] 1400(b) is the "sole and exclusive provision controlling venue in patent infringement actions, and... is not to be supplemented by the provisions of... [section] 1391(c)," the expanded definition of corporate residence in the general venue statute did not apply in patent cases. (22) Thus, for patent purposes, corporations were deemed to reside only in their state of incorporation, notwithstanding [section] 1391(c).

    By the 1970s, the Supreme Court had twice ruled, in Stonite and Fourco, that the patent venue statute alone controlled venue in patent cases. However, [section] 1400(b) had no provision regarding venue for foreign defendants. (23) To eliminate potential venue gaps, the Court in Brunette, while reaffirming that [section] 1400(b) stood alone, simultaneously invoked the underlying principle of [section] 1391(d), which allowed aliens to be sued in any district, to hold that foreign defendants were "wholly outside the operation of all the federal venue laws, general and special." (24) Thus, [section] 1400(b) was still the exclusive venue provision for patent cases; it just did not apply to foreign defendants because no venue law did.

    In 1988, Congress again changed the definition of corporate residence under the general venue statutes, providing that "[f]or purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction." (25) Because [section] 1400(b) and [section] 1391 were in the same statutory chapter, the Court of Appeals for the Federal Circuit in VE Holding v. Johnson Gas Appliance Co. determined that Congress had signaled an intent to change the definition of corporate residence in patent cases as well. (26) Thus, corporations were deemed to reside wherever they were subject to personal jurisdiction, whether or not the suit was for patent infringement.

    In 2011, Congress most recently amended the general...

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