Following the U.S. Supreme Court’s ruling in TC Heartland, Judge Rodney Gilstrap of the Eastern District of Texas made the first (and so far only) in-depth effort to define the contours of what constitutes a “regular and established place of business” under the second prong of 28 U.S.C. Section 1400(b). In June’s Raytheon v. Cray, he found Cray’s employment of local sales executives a sufficient basis for venue, notwithstanding its lack of physical presence. He drew parallels to the Federal Circuit’s most recent discussion of this issue, 1985′s In re Cordis, which declined to overturn a district court’s finding of proper venue based on the defendant’s local sales employees. He noted the Federal Circuit’s conclusion that the appropriate inquiry is whether the defendant has a “permanent and continuous presence” and not whether it has “a physical presence in the sense of a formal office or store.”
After finding venue proper, Judge Gilstrap provided a “totality of circumstances” test as guidance for venue under the second prong, based on four factors: 1) physical presence in the district, 2) representations concerning the district, 3) benefits received from the district, and 4) targeted interactions with the district. Cray has appealed to the Federal Circuit, which remains pending.
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