Implications of Patent Venue Decision Extend Well Beyond the Heartland

Just over two months have elapsed since the Supreme Court rejected the Federal Circuit’s patent venue jurisprudence. TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017). The Supreme Court held that venue for patent cases is proper in (1) the defendant’s state of incorporation or (2) “where the defendant has committed acts of infringement and has a regular and established place of business.” Id. at 1516 (quoting 28 U.S.C. § 1400(b)). This departs from the Federal Circuit’s previous position that venue is proper anywhere the defendant is subject to personal jurisdiction. Id. at 1519. Recent district court decisions have begun to shed light on what this development means for ANDA litigants.

Waiver.  The first wave of post-TC Heartland cases suggests that defendants in pending cases are unlikely to benefit from the narrowed scope of proper venue. If defendants fail to object to venue in their answer and sufficiently preserve the objection, the objection is waived. Fed. R. Civ. P. 12(b), (h). A majority of district courts have held that TC Heartland does not constitute a “change of law” that would trigger an exception to waiver. See Koninklijke Philips N.V. v. ASUSTeK Comput. Inc., 2017 U.S. Dist. LEXIS 111889, at *11 (D. Del. July 19, 2017) (surveying district court opinions). Instead, TC Heartland is construed as merely re-affirming an earlier Supreme Court precedent. Id. ANDA defendants that did not previously object to venue in a timely fashion will be stuck in their current venue.

Application of TC HeartlandThe next wave of post-TC Heartland cases will have to address the questions left in TC Heartland’s aftermath. First, courts must decide where an ANDA filer has committed an act of infringement by filing an ANDA. If courts follow the analysis used in the personal jurisdiction context, infringement is deemed to have occurred wherever the ANDA filer intends to market and sell the drug. C.f. Acorda Therapeutics, Inc. v. Mylan Pharms., Inc., 817 F.3d 755, 760 (Fed. Cir. 2016).

Second, the definition of “regular and established place of business” remains under-developed. If this provision is interpreted broadly, TC Heartland would minimally impact a plaintiff’s choice of venue. Judge Gilstrap of the Eastern District of Texas has generously interpreted the requirement, finding a “regular and established place of business” to exist even where a company lacked a physical building. Raytheon Co. v. Cray, Inc., 2017 U.S. Dist. LEXIS 100887, *32-37 (E.D. Tex. June 29, 2017) (considering additional factors, including defendant’s representations regarding its presence, benefits received, and targeted interactions with the district). In contrast, if this provision is interpreted strictly, plaintiffs may increasingly resort to litigating in the defendant’s state of incorporation. See, e.g., Logantree Lp v. Garmin Int’l, Inc., 2017 U.S. Dist. LEXIS 99925, *4-5 (W.D. Tex. June 22, 2017) (stating that authorization to do business in the state and distributors in the district did not amount to a “permanent and continuous presence which shows a regular and established place of business”).

Finally, TC Heartland may impact the identity of defendants. TC Heartland does not extend to foreign entities. 137 S. Ct. at 1520 n.2. Thus, foreign entities may still be sued in any judicial district. 28 U.S.C. § 1391(c). Accordingly, branded companies may attempt to file ANDA litigations against foreign parents instead of their U.S. subsidiaries.

As the ripples from TC Heartland continue to spread, ANDA petitioners should prepare for increased litigation over the interpretation of § 1400(b), further congestion in Delaware district courts, and possibly a shift in focus to foreign defendants.