Stanford's Lemley Asks Federal Circuit to Answer Key 'TC Heartland' Question
The U.S. Court of Appeals for the Federal Circuit has requested briefing in two cases that could flesh out the Supreme Court's game-changing patent venue holding.
December 29, 2017 at 03:08 PM
5 minute read
Mark Lemley, Stanford Law professor and Durie Tangri partner
The next shoe may be about to drop on patent venue.
In the wake of the Supreme Court's game-changing 2017 ruling TC Heartland v. Kraft Foods, the U.S. Court of Appeals for the Federal Circuit has requested briefing on whether a company incorporated in Texas can be sued in any of the four districts within the state—including the plaintiff-popular Eastern District.
A Durie Tangri team led by Stanford law professor Mark Lemley is trying to spring Austin-based software company BigCommerce Inc. from two patent suits filed in the Eastern District of Texas. U.S. District Judge Rodney Gilstrap OK'd them, saying the Supreme Court already ruled in TC Heartland that a company resides “in its state of incorporation for purposes of the patent venue statute.” That includes Marshall, Texas, Gilstrap reasoned.
SPEED READ • The Federal Circuit is showing interest in two cases that could flesh out the Supreme Court's game-changing decision in TC Heartland. • At issue: Whether a company can be sued for patent infringement in any judicial district in its state of incorporation or only in the district where it's incorporated. • Why it matters: The issue will arise repeatedly in big states with busy patent dockets. A ruling for the defendant would restrict venue options in patent cases. • What's next? Response briefs due in early January.Lemley argues that TC Heartland couldn't have resolved the issue because the case originated in Delaware, which spans a single judicial district. And the patent venue statute instructs that suits may be brought “in the judicial district where the defendant resides”—not anywhere in the state, Lemley says.
This issue “will arise repeatedly in the near future, because many of the states with the most patent cases, including California, Florida, New York, Texas, and Virginia, have multiple judicial districts,” Lemley wrote in a Dec. 22 petition. It asks the Federal Circuit to order the dismissal of plaintiff Diem LLC's suit.
The Federal Circuit has asked Diem to file a response by Jan. 4.
Lemley filed a second petition Dec. 27 asking the appellate court to transfer plaintiff Express Mobile Inc.'s suit to the Northern District of California, and two days later, the court ordered Express Mobile to file a response by Jan. 8.
Since the Supreme Court's May ruling in TC Heartland, the Federal Circuit has taken up and decided two mandamus actions that fleshed out the patent venue landscape. In In re Cray the court defined a “regular and established place of business”—the second prong of the patent venue statute—and in In re Micron Technology it limited the circumstances in which defendants waive their venue challenges.
In the cases now before the Federal Circuit, non-practicing entities Diem and Express Mobile accuse BigCommerce of infringing their patents on web page authoring tools.
An interesting sideshow has unfolded in one the cases that could be instructive for lawyers on social media. Before Gilstrap, Express Mobile's lawyer argued that Lemley has already passed judgment on the venue question on Twitter, siding against his client's position.
Robert Kiddie of The Devlin Law Firm wrote that on the day the Supreme Court issued TC Heartland, BigCommerce trial counsel Amit Agarwal, using the anonymous Twitter address @UncleJack123, asked Lemley, “If Texas is a company's state of Incorporation, does that company therefore 'reside' in SDTX, WDTX, NDTX, and EDTX automatically now?”
Lemley replied, “Yes, if you are incorporated in a state I believe you reside in all its judicial districts.”
“For once, I hope you're incorrect,” Agarwal tweeted back, “given the use of the singular-sounding phrase 'the judicial district.'”
Lemley then clarified that he was referring to the general venue statute. “But not totally clear it applies here given TC Heartland,” he explained.
Lemley said Friday he doesn't recall the tweet specifically, but may have been trying to predict how the Eastern District of Texas would interpret the decision.
Kiddie reproduced the first two tweets in his opposition. “There is no dispute that defendant is incorporated in Texas,” Kiddie wrote. “Defendant therefore 'resides' for purposes of venue in patent cases, in the State of Texas where it is incorporated.”
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