INTELLIGENCE

In re: TC Heartland LLC, No. 2016-105

April 29, 2016

TC Heartland LLC (“Heartland”) petitioned for a writ of mandamus to direct the Delaware District Court to dismiss or transfer the patent-infringement suit filed against it by Kraft Foods.The Federal Circuit denied the writ, holding that 28 U.S.C. § 1400(b) established proper venue inDelaware and that Delaware had specific personal jurisdiction over Heartland. Heartland is a limited liability company organized under Indiana law and headquartered in Indiana. The alleged infringing sales in the state of Delaware account for approximately 2% of Heartland’s total sales of accused products.    

The Federal Circuit rejected Heartland’s argument that Congress’s 2011 amendments to the Venue statute effectively overrode the 1988 Amendments to that statute. In V.E. Holding, theFederal Circuit noted that the 1988 amendment to the Venue statute made the definition of corporate residence in 28 U.S.C. § 1391 (the general venue statute) applicable to patent cases.The Federal Circuit found no indication in the 2011 amendments that Congress intended to overturn that rule. The general venue statute, § 1391, applies in cases where a more specific venue provision (e.g., § 1400) does not apply. Accordingly, the Federal Circuit adhered to the view that in patent-infringement casesas in other types of casesvenue will lie in any district in which the defendant entity is subject to personal jurisdiction.    

The Federal Circuit, following its precedent in Beverly Hills Fan, further held that a defendant has sufficient minimum contacts to establish jurisdiction over an entire infringement action when it ships accused products into the forum through established distribution channels. The FederalCircuit rejected Heartland’s argument that Delaware lacked personal jurisdiction over defendants under the Supreme Court’s recent Walden v. Fiore decision. Heartland argued that the District of Delaware should have specific personal jurisdiction only over the proportion of accused infringing products sold in the state (here, about 2%). The Federal Circuit found that theSupreme Court’s Walden decision did not overturn Beverly Hills Fan.

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