Federal Circuit to decide on bid to change where patent cases can be filed

By Michael Carroll | Apr 26, 2016

PALO ALTO, Calif. (Legal Newsline) – Companies that are targets of patent litigation should keep an eye on a case now before the U.S. Court of Appeals for the Federal Circuit that could lead to far-reaching changes about where patent lawsuits can be filed across the nation, a Silicon Valley intellectual property attorney said.

“Companies should closely monitor this case because it has the potential to greatly impact patent litigation strategies,” Bijal Vakil, a partner with White & Case LLP, told Legal Newsline.

A three-judge panel of Federal Circuit heard arguments in March in the appeal from TC Heartland, a manufacturer of water flavorings. The proceedings stemmed from a patent infringement case brought against TC Heartland by Kraft Foods Group Inc.

TC Heartland appealed to the Federal Circuit to transfer the case from Delaware to the U.S. District Court for the Southern District of Indiana, where the company has its headquarters.

“Generally speaking, defendants in patent cases prefer to have cases heard in locations where they are headquartered or have their relevant business operations,” Vakil said.

Others in the legal profession have pointed out that company officials usually feel that they will get a more favorable verdict from jury members close to their home base. That’s because those in the jury pool may have a favorable opinion about the company because it employs local residents and contributes to the local economy.

In addition, a decision that sides with TC Heartland would dramatically shake up where such patent-litigation cases are filed in the nation. A majority of patent cases are brought in U.S. District Court for the Eastern District of Texas, which is seen by some as a plaintiff-friendly jurisdiction.

According to attorneys at Mintz Levin, the Federal Circuit has generally held that since 1990, patent infringement litigation can be filed anywhere the defendant makes any sales. But TC Heartland, citing the enactment of federal legislation in 2011, argues that language in a section of the U.S. Code applying to patent litigation has been narrowed.

In turn, the company has urged the Federal Circuit to affirm that such lawsuits should only be filed where defendants have established places of business.

TC Heartland’s position has drawn support from companies and interest groups. Indeed, three amicus briefs have been filed in support of TC Heartland in this case.

The case is currently being decided by three judges, but Vakil said that a future ruling on the issue involving all the members of the Federal Circuit might occur.

“It will be interesting to see what happens,” he said. “We can’t anticipate the outcome, but the decision is likely to be reheard en banc, and we will see where the chips fall from there.”

A decision is expected sometime this summer.

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