Patent Defendants Win a Big One

This morning’s Supreme Court opinion in TC Heartland v. Kraft Foods, hinging on what I described in January as a dry point of statutory interpretation, is likely to stand as a landmark win for defendants in patent litigation – and, on a practical level, for fairer ground rules in procedure. A unanimous Court (8-0, Thomas writing, Gorsuch not participating) rejected the broad reading of a venue statute by which the Federal Circuit had empowered lawyers to forum-shop disputes from all over the country into a few decidedly pro-plaintiff venues, above all the largely rural Eastern District of Texas. From here out, defendants can still be sued in a district such as E.D. Tex. if they have a regular and established place of business in it, but the decision is likely to shrink what I called in my January preview a “jackpot patent litigation sector… that shifts around billions of dollars.” By redirecting cases into more neutral venues, it should bring outcomes closer to reflecting cases’ actual merits, which would in turn do much toward restoring confidence in this sector of the law.

If Congress believes the Court has erred it is free to restore patent venue to a more shopper-friendly set of rules. But after the experience of recent years, it is unlikely that a Congress of either party or any likely political complexion will have an appetite for doing that.