Notable case: Realtime Data LLC v. Nexenta Systems, Inc.

The United States Supreme Court decision in the case TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514, 1521 (2017) was a major change in patent litigation. You can read our post on that case here: Notable Case: TC HEARTLAND LLC v. KRAFT FOODS GROUP BRANDS LLC

The main point of TC Heartland is, a court can only hear a case if venue is proper. Proper venue for patent infringement cases used to be much broader than normal. Prior to TC Heartland just about any court in the United States could be considered the proper venue for a patent infringement case. Normally venue is only proper when a substantial part of claim occurred there or the defendant resides there. The Supreme Courts decision narrowed the definition of proper venue for patent cases to match the normal venue rules.

TC Heartland dealt with venue at the state level. Some states have multiple federal district courts and multiple venues. TC Heartland was ambiguous whether any court in a state is the proper venue for a patent infringement state or if the venue is specific to geographic area a federal district court covers.

The question of proper venue in a multi court state is the issue in Realtime Data LLC v. Nexenta Systems, Inc., No. 2-17-cv-07690-28. In that case Realtime sued Nexenta for patent infringement in the Central District of California. Nexenta argued that venue was not proper because it resided in the Northern District of California. The Federal District Court for the Central District of California agreed with the Nexenta and dismissed that case.

The Central District of California Court held that a corporate defendant resides only in the state of its incorporation and, within that state, only in the judicial district in which it maintains its principal place of business. The court supported this finding with Stonite Prods. v. Melvin Lloyd Co., 315 U.S. 561 (1942). In that case the United States Supreme Court held that the patent venue statute was intended to be a restrictive measure, limiting a prior, broader venue statute. The Supreme Court held that a defendant inhabits a district, not the entire state, for venue purposes.

The Central District of California Court also used TC Heartland to support its decision. The court held that TC Heartland’s requirement that a patent infringement suit be brought in the defendant’s state of incorporation is one requirement for proper venue. An additional requirement for proper venue is that a patent infringement lawsuit must be filed in a district in which the defendant has a principal place of business.

The changes to the venue requirements for patent infringement lawsuits are major. In a few short years the definition of proper venue for patent infringement lawsuits have changed from any court in the United States to only a very limited number of courts.

If you have questions or comments for the authors of this blog please email us: admin@uspatentlaw.com