December 19, 2017 Top Story

Federal Circuit Sets New Venue Test

Now a remote employee's place of residence alone is not sufficient to establish patent venue

Martha L. Kohlstrand

There is a new test for determining a defendant's "regular and established place of business" under  28 U.S.C. § 1400(b), which governs venue for patent infringement cases. In In re Cray Inc., the Federal Circuit's decision resolved a split in the lower courts. Now a remote employee's place of residence alone is not sufficient to establish patent venue, and patent venue will be more narrowly construed than its general venue counterpart under 28 U.S.C. §1391(c).

Filing Suit Based on the Residence of Remote Employees

Raytheon sued Cray for patent infringement in the U.S. District Court for the Eastern District of Texas. Cray had no property or offices within the forum. Its principal place of business and place of incorporation were in Washington, with additional facilities in other cities. Because the only connection that Cray had to the Eastern District was through two remote employees who resided there, Cray moved to transfer the suit, arguing venue was improper under Section 1400(b). That provision states that venue is appropriate "where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business."

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