February 07, 2017 Articles

Looking Ahead to 2017: Where Will Patent Venue Be Appropriate?

District courts appear to be embracing a totality of the circumstances test

By Ben Hodges

"[T]he purpose of statutorily specified venue is to protect the defendant against the risk that a plaintiff will select an unfair or inconvenient place of trial." Leroy v. Great W. United Corp., 443 U.S. 173, 183–84 (1979). Congress first passed a venue statute specific to patent infringement suits in 1897, in direct response to a Supreme Court decision finding broad and general venue over that unique federal question. For more than 90 years, that statute, now codified at 28 U.S.C. section 1400(b) and as interpreted by the Supreme Court, limited patent infringement venue either to a district in the state of incorporation of a corporate patent defendant, or a district where the defendant both committed acts of infringement and had a regular and established place of business. Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 229 (1957). That changed when the Federal Circuit decided VE Holding in 1990. VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1582–83 (Fed. Cir. 1990).

VE Holding broadened patent venue to be proper anywhere an accused product was sold: essentially any district in the country for most patent cases. However, instead of creating a distribution across the 94 district courts, in the years since VE Holding filings for patent cases became concentrated in just a few districts. In 2016, of the around 4,000 patent cases filed, more than half were filed in Delaware, the Northern District of California, the Northern District of Illinois, or the Eastern District of Texas. In fact, the Eastern District of Texas accounted for around 40 percent of the total patent filings. (Statistics found through Docket Navigator.) In the last few years, there have been both legislative and judicial efforts to change the rules that allow this concentration.

Largely as a result of this concentration of patent cases, the concept of patent venue is under review both in the courts and in Congress. Each route has the potential to drastically change the location of patent cases in the near future.

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