Amicus Curiae Brief — TC Heartland LLC v. Kraft Food Brands Grp. LLC., 137 S. Ct. 614 (2016) (No. 16-341)
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No. 16-341 OFFICE OF THE CLERK
IN THE
Supreme Court of the United States
TC HEARTLAND LLC,
Petitioner,
KRAFT FooDS GROUP BRANDS LLC,
Respondent.
On Writ of Certiorari to the United States
Court of Appeals for the Federal Circuit
BRIEF FOR AMICI CURIAE ERICSSON INC.,
ALLERGAN, INC., AND TRAXXAS L.P. IN
SUPPORT OF RESPONDENT
Steven J. Pollinger Thomas C. Goldstein
Yusuf A. Rangwala Counsel of Record
McCKOOoL SMITH, P.C. GOLDSTEIN &
300 W. 6th Street RUSSELL, P.C.
Suite 1700 7475 Wisconsin Ave.
Austin, TX 78701 Suite 850
(512) 692-8700 Bethesda, MD 20814
(202) 362-0636
tg@goldsteinrussell.com
WILSON-EPES PRINTING Co., INC. — (202) 789-0096 — WasHinGcToNn, D. C. 20002
CORPORATE DISCLOSURE STATEMENT
Ericsson Inc. is wholly-owned by Ericsson
Holding II Inc., which in turn is wholly-owned by
Telefonaktiebolaget LM Ericsson. Telefonaktiebolaget
LM Ericsson is publicly held and trades in the United
States through American Depository Receipts under
the name LM Ericsson Telephone Company.
Allergan, Inc. is a wholly-owned subsidiary of
Allergan ple. Allergan ple is a_ publicly-owned
company traded on the New York Stock Exchange
under the ticker symbol “AGN.”
Traxxas L.P. is a Texas limited partnership. No
parent or publicly held corporation owns 10% or more
of Traxxas L.P.’s stock.
$3
TABLE OF CONTENTS
CORPORATE DISCLOSURE STATEMENT.............. i
TABLE OF AUTHORITIES ..............00:ssccsccceseeeseeseners iii
INTEREST OF AMICI CURIAE...................00.000cc00ee0002 1
SUMMARY OF THE ARGUMENT .........00.0........00...... 2
FTE AREER Sh 2ST ae OO 5
I. Petitioner’s Attacks On The Eastern District
Of Texas Are A Red Herring. ........................0002+0+- 5
A. There Are Many Legitimate Reasons Why
Patent Holders Choose A Particular
Forum, Including The Eastern District Of
Tea schenictiastndapinedenndeniiaipiaicantnebtaidiatnatietinmeines 5
B. Data Shows That The Eastern District Of
Texas Is On Par With National Averages
Regarding Key Litigation Statistics. ........... 10
II. Because § 1391(c) Is Clear, This Court Must
Reject Petitioner's Invitation To Legislate
Under The Guise Of Statutory Interpretation... 21
A. Obsolete Case Law Construing Old
Statutes Cannot Justify A Judicial
Override Of §1391(c)’s Definition Of
“Resides” “For All Venue Purposes.” ........... 21
B. Petitioner's Forum Shopping Arguments
Are Irrelevant To The Task Before The
RSET SOS oe ae ro 25
C. Petitioner’s “Patent Troll” Rhetoric Is
Extraneous And Should Be Ignored. ........... 27
REET AEDES 29
APPENDIX, Selected Statutory Excerpts ................ la
TABLE OF AUTHORITIES
Cases
3M v. HM Elecs.,
No. 0:12-cv-00553 (D. Minn., Mar. 2, 2012)......... 26
Cellular Comms. Equip. v. Samsung Elecs. Co.,
No. 6:14-cv-759, Dkt. 154 (E.D. Tex. Dec. 16,
SI iacaishstinaidddeicieniamsindendeidiniaileuabherunioieceuvenbiesinmnnentee 18
Coffey v. Van Dorn Iron Works,
796 F.2d 217 (7th Cir. 1966)...............................-00 7
Commil USA, LLC v. Cisco Sys., Inc.,
ce 12
Conn. Nat Bank v. Germain,
ee 21
Cty. of Oakland v. Fed. Housing Fin. Agency,
716 F.3d 935 (6th Cir. 2013).....................ccssesese0e0 24
Delta Air Lines, Inc. v. August,
Deposit Guar. Nat. Bank v. Roper,
CT 12
Ericsson Inc. et al v. Apple Inc.,
No. 2-15-cv-00293 (E.D. Tex. Feb 26, 2015)......... 26
ExitExchange Corp. v. FriendFinder Network,
Inc.,
No. 2:13-cv-00396 (E.D. Tex. Jan. 14, 2015)........ 19
Finn v. Meighan,
EERE IS Sere PE 22
Fourco Glass Co. v. Transmirra Prods. Corp.,
ie cierttartenrensentinespetit 2, 12, 22
Global Equity Mgmt. (SA) PTY Ltd. v. Ericsson
Inc.,
No. 2:16-cv-00618 (E.D. Tex. Jan. 25, 2017)........ 19
iv
Hanna v. Plumber,
TENE Oe memes eee Fr 26
In re Microsoft Corp.,
Misc. No. 944, 2010 U.S. App. LEXIS 23121
SE ES A a ee 20
In re TS Tech U.S. Corp.,
551 F.3d 1315 (Fed. Cir. 2008) ...................-....006+- 20
Leroy v. Great W. United Corp.,
a 4
Malley v. Briggs,
ES 21
Microsoft Corp. v. i4i Ltd. P’ship,
a sccuisuepsnemninnnnii 13
NFC Tech. LLC v. HTC Am., Inc.,
No. 2:13-CV-1058-WCB, 2015 U.S. Dist.
LEXIS 29573 (E.D. Tex. Mar. 11, 2015)................ 18
Shady Grove Orthopedic Assocs., PA. v. Allstate
Ins Co.,
Be iy i OD cccctnnccccccsccccccecncoseseses anil 25, 26
Shaw v. Quincy Mining Co.,
cre scensceemasiindanensnnisanweticen 22
Syngor, Inc. v. Vicor Corp.,
No. 2:14-cv-00287 (E.D. Tex. May 23, 2016)........ 19
Van Dusen v. Barrack,
AES RE aC aE a OD 25
VE Holding Corp. v. Johnson Sita Co.,
917 F.2d 1574 (Fed. Cir. 1990) ..................0.0000 3, 23
Westech Aerosol Corp. v. Newstar Adhesives,
No. 3:17-cv-05082 (W.D. Wash. Feb. 2, 2017)......26
Statutes
SETA: ES, ST passim
a as cericenernpmenen passim
Leahy-Smith America Invents Act,
Pub. L. No. 112-29, 125 Stat. 284 (2011) ............. 23
Rules
NE i a hiiiiachiccntiae i nciiieneheunatnnpincoaenents 17
Other Authorities
Carrie E. Johnson, Rocket Dockets: Reducing
Delay in Federal Civil Litigation,
BS aR 6
Clifton B. Parker, Patent Trolls Serve Valuable
Role in Innovation, Stanford Expert Says,
STANFORD NEWS (Feb. 23, 2015),
http://news.stanford.edu/2015/02/23/haber-
patent-trolls-022315/ (last visited March 5,
EET al J Se a 27
Docl.et Navigator,
https-//www.docketnavigator.com
/browse/results/34db2b6f-ef9c-04ba-a8c0-
6812fd09b33b (last visited Feb 14, 2017).............. 18
Docket Navigator,
https://www.docketnavigator.com/
browse/resulta/b95eaf45-7964-4e15-361d-
0e9098563029 (last visited Feb 14, 2017)............. 1¢
Docket Navigator,
https://Awww.docketnavigator.com/browse/resu
lts/55cd3478-0361-5449-7dab-83f0c9c6acal
(last visited Feb. 14, 2017)...............0..ccccccccceeeeeeeees 19
J. Jonas Anderson, Patent Dialogue,
92 N.C. L. REv. 1049 (May 2014)..........0-000000000002. 23
John Bronsteen, Against Summary Judgment,
75 GEO. WASH. L. REV. 522 (2007)...................0000-- 15
vi
John Council, The Slowpoke Report: Vacancies,
Crushing Caseloads Take Toll on Texas
Bench, TEXAS LAWYER (Feb 1, 2017)
http://www.texaslawyer.com/id=12027769379
94/The-Slowpoke-Report-Vacancies-Crushing-
Caseloads-Take-Toll-on-Texas-Bench. .................... 7
Kevin Benton, New Patent Filings Down in
2016, Lowest Since 2011: Report, Law360
(Oct. 11, 2016, 4:54 PM),
https://www.law360.com/articles/850061/new-
patent-filings-down-in-20) ....0...........0...ccececeeeeeeeee ee 28
Kimberly A. Moore, Forum Shopping in Patent
Cases: Does Geographic Choice Affect
Innovation,
Ie 25
LegalMetrics, Nation Patent Litigation Report
is iicnseisncneiissitabiceiisheninelaidiiabadipibdaadadiion ome 16
Leslie Wayne, How Delaware Thrives as a
Corporate Tax Haven, N.Y. TIMES (June 30,
2012),
http://www.nytimes.com/2012/07/0 1/business/
how-delaware-thrives-as-a-corporate-tax-
IED daccovcccrcascssundincadienhaninbinbametieninetbinhiaiaiaiall 28
Lex Machina, http://lexmachina.com................ passim
Lynn M. LoPucki & William C. Whitford, Venue
Choice and Forum Shopping in the
Bankruptcy Reorganization of Large, Publicly
Held Companies,
1991 Wis. L. REV. 11 (1991)...............eccccsssecssseeeees 25
Mark A. Lemley, Jamie Kendall & Clint Martin,
Rush to Judgment? Trial Length and
Outcomes in Patent Cases,
41 AEPEA Gd. WED GRGES) occvcccvcccccscccccssesssessessesecess 8
vil
Ron Vogel, The Patent Pilot Program:
Reassignment Rates and the Effect of Local
Patent Rules, available at
http://Awww.fr.com/files/U ploads/Documents/V
ogel. NYIPLABulletin.Pilot-Patent-Program-
Reassignment-Rates-and-Effects-of-Local-
a cssemiesnonnennnences 9
INTEREST OF AMICI CURIAE
Ericsson Inc. (“Ericsson”) is a leading supplier of
wireless network equipment, a leading developer of
wireless technologies, and both a licensor and
licensee of patents in the telecommunications
industry. ' With more than 100,000 employees
globally, Ericsson is a pioneer of the modern cellular
network. Over 1,000 networks in more than 180
countries use Ericsson equipment, and a significant
portion of the world’s mobile traffic passes through
these networks. Ericsson currently devotes more
than 20,000 employees and roughly five billion
dollars a year, almost 15% of its net sales, to research
and development—and Ericsson’s innovations have
produced over 37,000 issued patents worldwide.
Ericsson employs more than 10,000 people in offices
across the United States and supplies network
equipment and/or services to every major U.S.
telecommunications operator. Ericsson’s North
American headquarters are in Plano, Texas.
Allergan, Inc. (“Allergan”) is a leading, global
pharmaceutical company focused on developing,
manufacturing, and commercializing
pharmaceuticals, devices, and biologic products for
‘In accordance with Supreme Court Rule 37.6, amici
curiae affirm that this brief was not authored, in whole or in
part, by counsel to a party, and that no monetary contribution to
the preparation or submission of this brief was made by any
person or entity other than amici curiae and its counsel. The
parties have consented to the filing of this brief, either by
express written consent or by filing a letter documenting
consent with the Court.
2
patients in the United States and around the world.
Allergan markets a portfolio of leading brands and
best-in-class products for the central nervous system,
eye care, medical aesthetics, dermatology,
gastroenterology, women’s health, urology, and anti-
infective therapeutic categories. With more than
16,000 employees, Allergan is creating one of the
broadest pharmaceutical development pipelines in
the industry. Allergan has offices and facilities in
various cities around Texas.
Traxxas, L.P. (“Traxxas”) designs, engineers and
sells radio controlled vehicles and is headquartered
in McKinney, Texas. Traxxas has been engineering
and building the world’s fastest and most innovative
radio-controlled performance machines since 1986,
and is the number-one selling name in ready-to-run
nitro and electric radio controlled vehicles.
As both licensors and licensees of numerous
patents, amici curiae have an interest in federal
courts’ predictable and consistent application of the
venue statutes to patent infringement lawsuits
which, for nearly three decades, have defined a
corporation’s “residency” by reference to 28 U.S.C.
§ 1391(c).
SUMMARY OF THE ARGUMENT
This case presents the simple question of whose
law controls: Congress's definition of “reside” “for all
venue purposes,” which is contained in the current
version of 28 U.S.C. § 1391(c); or the common-law
definition applied in Fourco Glass Co. v. Transmirra
Prods. Corp., 353 U.S. 222 (1957), in which this Court
interpreted a now-superseded version of the general
venue statute. That venue statute has been amended
3
twice since Fourco, most recently in 2011. Amici
curiae urge this Court to apply the plain language of
Congress's amended statute, and to eschew
Petitioner's invitation to legislate from the bench
under the guise of statutory ambiguity. Because no
such ambiguity exists, Petitioner's sought-after
remedy—drastically narrowing possible venue for
patent cases—lies with Congress alone.
Amici will not belabor Respondent’s able analysis
of the statutory text. Rather, amici submit this brief
principally to respond to Petitioner’s complaints that
forum-shopping, “patent trolls,” and alleged “abuses”
of patent litigation—including a concentration of
patent cases in the Eastern District of Texas, among
other districts—justifies revamping the venue rules
that have applied to patent cases since the 1988
amendments to § 1391(c) and VE Holding Corp. v.
Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir.
1990), cert. denied, 499 U.S. 922 (1991). Petitioner's
effort to convert the instant appeal into a referendum
on case management practices in the Eastern District
of Texas is misplaced.
Even if this Court were the proper forum for
airing Petitioner's policy arguments—which it is
not—public data belies Petitioner's claim that the
Eastern District of Texas is disproportionately out-of-
sync with the rest of the federal bench when it comes
to patent cases. The Eastern District of Texas has
one of the heaviest patent dockets in the nation,
which s'ands to reason as its judges are highly
experienced in patent law and have a deserved
reputation for resolving disputes expeditiously.
Importantly, that court’s litigation statistics—
including plaintiff win rates, patent invalidation
4
rates, damages awards, and transfer orders, among
others—are in line with national averages, as well as
those from other patent-heavy districts such as the
District of Delaware, the Central District of
California, and the Northern District of California.
There is no measurable basis to conclude that the
Eastern District of Texas is less favorable to
defendants. Nor are there empirical grounds for
shrinking that court’s patent docket by applying a
125-year-old common law understanding of residency
in lieu of § 1391(c)’s express definition.
Moreover, narrowing the definition of “resides”
for purposes of venue in patent cases would not
address the perceived over-burdening of certain
patent dockets. As § 1400(b) contains no definition of
“resides,” Petitioner's position would resurrect
common law to equate residence with the state of
incorporation. If the Court were to adopt this judicial
gloss on venue, a significant proportion of patent
litigation would simply shift to Delaware, a popular
locus of incorporation.
As “the purpose of statutorily specified venue .. .
is to protect . . . against the risk that a plaintiff will
select an unfair or inconvenient place of trial,”
funneling patent cases to the defendant’s state of
incorporation—regardless of where it actually does
business—makes little pragmatic sense. Leroy v.
Great W. United Corp., 443 U.S. 173, 183-84 (1979).
This Court should respect the legislature’s
prerogative to fashion venue for federal courts, and
apply the plain language of § 1391(c) in this case.
5
ARGUMENT
I. Petitioner’s Attacks On The Eastern
District Of Texas Are A Red Herring.
Petitioner and its supporting amici curiae take
pains to paint the Eastern District of Texas as a
menacing influence on patent litigation that justifies
venue reform by this Court. As explained below,
however, such arguments are belied by public data
regarding case management in the Eastern District
of Texas.
A. There Are Many Legitimate Reasons
Why Patent Holders Choose A
Particular Forum, Including The
Eastern District Of Texas.
As a threshold matter, the assumption that the
concentration of patent cases in a subset of district
courts is indicative of a problem needing to be solved
overlooks the many legitimate reasons why patent
holders choose one forum over another. During oral
arguments in the Federal Circuit in TC Heartland,
Judge Kimberly A. Moore noted that there are
significant benefits to having patent cases
concentrated in a few jurisdictions. Patent cases are
complex, and the courts that hear most of them—
including the Eastern District of Texas—have become
particularly skilled at patent law.?
? Recording of 2016-0105 Oral Argument, at 23:20-25:50,
available at, http//www.cafc.uscourts.gov/oral-argument-
6
Local Rules. Indeed, as a result of its patent-
heavy docket, the Eastern District of Texas has
formulated local patent and discovery rules that
foster the timely and efficient adjudication of patent
suits, and prevent litigants from unduly delaying
final judgment. The court requires early disclosure of
infringement theories, invalidity theories, and claim
constructions,’ for example, and in many cases judges
in the Eastern District of Texas rule on preliminary
claim constructions immediately prior to Markman
hearings.
Resolution Speed. Overall, pre-trial
proceedings for patent cases in the Eastern District of
Texas are shorter than in other federal district
courts. Civil docket delay has long been considered “a
serious problem” in the federal courts, giving rise to
so-called “rocket dockets” such as the Eastern
District of Virginia, which “set{] early, firm trial
dates at the outset of proceedings, and generally
allow[] modification of such dates only for good
cause.” While carrying the highest weighted caseload
per judgeship nationwide (1,200 cases), the Eastern
District is the only federal court in Texas with no
judges listed on the lawyers’ annual “Slowpoke
3 A claim construction hearing (also known as a “Markman
hearing”) is a pretrial hearing in a patent suit during which the
judge examines evidence from all parties on the appropriate
meanings of relevant key words used in a patent claim.
* Carrie E. Johnson, Rocket Dockets: Reducing Delay in
Federal Civil Litigation, 85 CAL. L. REV. 225, 225 (1997).
5° This figure represents all cases, not just patent cases.
7
Report” for cases lasting over three years or motions
pending over six months.* This is so despite the fact
that three out of its eight district court judgeships
are vacant. Courts have recognized that such
“efficient administration of the court system” serves
the interests of justice.’ Thus, in patent litigation, the
relative absence of undue delay is a reasoned and
legitimate basis for filing cases in the Eastern
District of Texas.
Moreover, for each of the last five years, the
average wait time leading up to a jury trial in the
Eastern District of Texas (850 days) was shorter than
in the Northern District of California (913 days), the
District of Delaware (878 days), the Central District
of California (910 days), and the national average
(923 days).* The data is comparable for bench trials.
Over the same period, the Eastern District of Texas’s
average wait time for a bench trial in patent cases
6 John Council, The Slowpoke Report: Vacancies, Crushing
Caseloads Take Toll on Texas Bench, TEXAS LAWYER (Feb 1,
2017) http://www .texaslawyer.com/id=1202776937994/The-
Slowpoke-Report-Vacancies-Crushing-Caseloads-Take-Toll-on-
Texas-Bench.
7 See, e.g., Coffey v. Van Dorn Iron Works, 796 F.2d 217,
220 (7th Cir. 1986) (“[T]he ‘interest of justice’ is a separate
component of a § 1404(a) transfer analysis, and may be
determinative in a particular case .. . Factors traditionally
considered in an ‘interest of justice’ analysis relate to the
efficient administration of the court system, such as likelihood
of a speedy trial.”) (internal citations and quotations omitted).
§ Lex Machina, http//exmachina.com. Patent cases were
examined that terminated from February 8, 2012 to February
12, 2017 with “Jury Trial” tags.
8
(677 days) was faster than in the Northern District of
California (917 days), the Central District of
California (971 days), the District of Delaware (744
days), and the national average (796 days).*® By
contrast, both the Northern and Central Districts of
California’s time-to-trial averages for jury trials and
bench trials were significantly longer than in other
patent-heavy districts and as compared to the
national average.
The length of actual trials in patent cases filed in
the Eastern District of Texas is also shorter on
average than in other patent-heavy districts. From
January 1, 2000 until June 20, 2011, the average
number of days for a jury trial in a patent case in the
Eastern District of Texas (6.18 days) was half as long
as the Northern District of California (12.67 days).'°
The Eastern District of Texas also handled jury trials
more expeditiously than the District of Delaware
(7.96 days), the Central District of California (8.24
days), and the national average for all federal district
courts (8.6 days)." Likewise, the average number of
days for a bench trial in a patent case in the Eastern
District of Texas (3.6 days) was shorter than in the
Northern District of California (5.5 days), the Central
District of California (3.75 days), the District of
° Id. Patent cases were examined that terminated from
February 8, 2012 to February 12, 2017 with “Bench Trial” tags.
10 Mark A. Lemley, Jamie Kendall & Clint Martin, Rush to
Judgment? Trial Length and Outcomes in Patent Cases, 41
AIPLA Q.J. 169 (2013).
Td.
9
Delaware (5.08 days), and in comparison to the
national average (5.74 days).
Expertise. It is without question that the
Eastern District of Texas’s judges are experts in
patent law. As regular attendees at patent law bar
association meetings and conferences, judges in the
Eastern District of Texas have a national reputation
as experienced patent law jurists.
Given the heavy load of patent cases in the
Eastern District of Texas, the district’s courtroom
staff is also highly skilled. The Eastern District of
Texas hires independent technical advisors in patent
cases to help with claim construction and other
issues, such as summary judgment motions. It also
employs technically trained law clerks and other
courtroom staff with particular interest in patent
litigation. Moreover, Federal Circuit Court judges
regularly hear cases at the district court level (e.g.,
Judges Bryson and Dyk). Reciprocally, judges in the
Eastern District of Texas sit by designation on the
Federal Circuit (e.g., Judges Ward, Gilstrap, Davis,
and Clark).
As a consequence of the Eastern District of
Texas’s particular expertise in patent law, the court
was included in the “Patent Pilot Program”
established under the Leahy—Smith America Invents
Act of 2011 with the express goal of developing
specialized expertise among the federal judiciary in
patent law.” The Administrative Office of the U.S.
'2 See Ron Vogel, The Patent Pilot Program: Reassignment
Rates and the Effect of Local Patent Rules, available at
10
Courts selected only fourteen federal districts to
participate in the Patent Pilot Program. The
implication, therefore, that the Eastern District of
Texas is unduly steeped in patent cases does not hold
water. The intent behind the Patent Pilot Program
was to enhance the patent expertise of judges
participating in the program, including those in the
Eastern District of Texas.
In sum, litigants file patent infringement suits in
the Eastern District of Texas because its judges
possess especially deep expertise adjudicating patent
suits—not for nefarious reasons that undermine
fairness and judicial even-handedness, as Petitioner
and its supporting amici would suggest. Plaintiffs
and defendants alike can expect efficient case
management procedures and consistent substantive
rulings from judges presiding over patent cases in the
Eastern District of Texas.
B. Data Shows That The Eastern District
Of Texas Is On Par With National
Averages Regarding Key Litigation
Statistics.
Although irrelevant to the question of statutory
interpretation presented here, the policy arguments
presented by Petitioner and its supporting amici
curiae boil down to an assumption that the Eastern
District of Texas is “better for patent plaintiffs and
http://www -fr.com/files/Uploads/Documents/Vogel.NYIPLABulle
tin.Pilot-Patent-Program-Reassignment-Rates-and-Effects-of-
Local-Rules.OctNov2013.pdf.
11
worse for patent defendants.” In particular, they
argue that patent plaintiffs seek out the Eastern
District of Texas because “local rules and procedural
orders tilt in their favor.”“* Compared to other patent-
heavy districts and federal district courts in general,
however, the Eastern District of Texas is on par
regarding numerous litigation metrics, including
plaintiff win rates, patent invalidation rates,
damages awards, dispositive motions, affirmance
rates, settlement, stays, and transfers.
Plaintiff Win Rates. The Eastern District of
Texas has consistently had nearly identical patent
plaintiff win rate percentages as the national
average. Over the last five years (42%), three years
(44%), and one year (47%), the Eastern District of
Texas was within a maximum of five percentage
point of the national average for each time period
(42%, 41%, and 42%, respectively). By comparison,
the Northern District of California had lower plaintiff
win rates during each respective time period (25%,
24%, and 28%).* This data helps explain why large
13 Petitioner’s Brief at 16; see also Brief for Texas et al. as
Amicus Curiae Supporting Petitioners (“Texas’s Amicus Curiae
Brief”) at 9-13.
4 Texas’s Amicus Curiae Brief at 9.
18 Lex Machina, http:/Mexmachina.com. Analyzing claimant
win rates for cases that were terminated between February 8,
2012 and February 8, 2017. The patent plaintiff win rate
percentages exclude likely settlements, default judgments,
uncontested dismissals, consolidation, severance, transfers, and
stays.
16 Td.
12
technology companies, many of which are based in
the Northern District of California, urge this Court to
confine venue in patent cases to a defendant’s home
district (where it has committed acts of infringement
and has a regular an established place of business
under § 1400(b)) or to the place of incorporation
under Fourco. There is no evidence that the
statistical differences between the Eastern District of
Texas and the Northern District of California reflect
unfairness in either forum, although it does explain
the self-interests at play here.
As for a patent plaintiffs chance of winning a
jury trial in particular, the data again lines up as
between the Eastern District of Texas and other
patent-heavy districts. For the last five years, the
Eastern District of Texas’s jury trial win rate for
patent plaintiffs (65%) was approximately the same
as the national average (64%), the District of
Delaware (65%), the Northern District of California
(63%).""
Patent Invalidation Rates. In defending a
patent infringement case, “an accused infringer ‘may
prevail . . . by successfully attacking the validity of
the patent.” Commil USA, LLC v. Cisco Sys., Inc.,
135 S. Ct. 1920, 1928 (2015) (quoting Deposit Guar.
Nat. Bank v. Roper, 445 U.S. 326, 334 (1980)). As for
the defense of invalidity, the burden “rest[s] on the
17 Td. Patent plaintiff jury win rates were calculated by
reviewing win percentages for cases with “jury trial” tags,
excluding likely settlements, default judgments, procedural
uncontested dismissals, consolidation, severance, transfers, and
stays.
13
party asserting such invalidity” by “clear and
convincing evidence.” Microsoft Corp. v. i4i Lid.
P’ship, 564 U.S. 91, 95 (2011). Despite Petitioner's
suggestion that the Eastern District of Texas favors
plaintiffs, litigants in both the Eastern District of
Texas and the District of Delaware can expect
defense victories via patent invalidation at
approximately the same rate as the national average,
taking into account all forms of judgment through the
completion of trial. By contrast, plaintiffs litigating in
the Northern District of California had their patents
invalidated at nearly twice the rate as the national
average.
More specifically, while the Eastern District of
Texas invalidated nearly one-sixth (17.43%) of all
patents over the last five years, which is within one
percentage point of the invalidation rate nationally
(17.52%), and within 1.5 percentage points of the
Central District of California (17.97%), the Northern
District of California invalidated nearly one-third of
all patents (30.1%).'* Because the rate of patent
invalidation in the Eastern District of Texas is on par
with the netional average as well as that of the
Central District of California, there is no empirical
basis to argue that the invalidation rate in the
Eastern District of Texas is unfairly low.
‘8 Lex Machina, http//lexmachina.com. Invalidity rulings
were analyzed by comparing invalidity rulings to total case
determinations between February 8, 2012 and February 8, 2017,
excluding likely settlements, default judgments, uncontested
dismissals, consolidation, severence, transfers, stay and
multidistrict ligitation.
14
Damages Awards. Petitioners supporting
amici curiae further argue that patent holders file
suit in the Eastern District of Texas for the “distinct
possibility of massive damages.” Yet over the last
five years, the Eastern District of Texas had a
median patent damage award ($7,160,886) that was
less than those of both the Northern District of
California ($8,854,470) and the District of Delaware
($13,270,000).” The data on damages awards thus
shows that it is statistically more advantageous for
patent holders to file suit in the District of Delaware
than in the Eastern District of Texas.
Dispositive Motions. Petitioner's supporting
amici curiae also suggest that dismissal and/or
summary judgment in favor of patent defendants is
not adequately available in the Eastern District of
Texas. Over the past five years, the Eastern District
of Texas has granted motions to dismiss in patent
cases at a rate of 32% percent, and motions for
summary judgment at a rate of 21%, whereas the
national averages for granting motions to dismiss
and motions for summary judgment in patent cases
were 45% and 34%, respectively.”
19 See, e.g., Texas’s Amicus Curiae Brief at 12.
#0 Lex Machina, http/Mexmachina.com. Cases were
examined from February 8, 2012 to February 8, 2017. The
median was used instead of the mean in calculating the damage
award statistics to minimize the effect of outlier judgments.
71 Id. Lex Machina motions metric report was used to
analyze claimant win rates for summary judgment and motions
to dismiss (contested) for patent cases that were terminated
between February 8, 2012 and February 8, 2017.
16
While it is clear that the Eastern District of
Texas grants dispositive motions in patent cases, the
comparative statistics—standing alone—are not a
fair indictment of the judges in the Eastern District
of Texas. To be sure, “summary judgment avoids the
time and expense of trial, [and thus] appeals to
commentators who prize efficiency.”"“~ But as noted
above, judges in the Eastern District of Texas are
notoriously efficient and timely in their management
of an especially heavy patent-related docket. The fact
that some patent defendants grouse about how
readily judges in the Eastern District of Texas grant
dispositive motions is of little consequence here.”
Affirmance Rates. Notably, the Eastern
District of Texas’s decisions in patent cases are
affirmed at the same rate as the other patent-heavy
districts.“ This holds true regardless of whether a
jury or judge decided the case. For cases decided by
jury verdict, the Federal Circuit affirms, at least in
part, nearly the same percentage of cases from the
#2 John Bronsteen, Against Summary Judgment, 75 GEO.
WASH. L. REV. 522, 524 (2007).
78 Amicus curiae Texas erroneously argues that letter
briefs are required to be filed before summary judgment motions
in the Eastern District of Texas. See Texas’s Amicus Curiae
Brief at 10. Judges in the Eastern District of Texas do not
uniformly require the filing of letter briefs prior to a full motion
for summary judgment. Judge Gilstrap ceased the practice in
July 2016. In any event, litigants may benefit from letter briefs,
as they winnow down the issues for summary judgment,
* All appeals from federal district court patent cases are
heard by the Federal Circuit.
16
Eastern District of Texas (84%) as from the Northern
District of California (80%) and the District of
Delaware (86.1%). ™ When _ reviewing bench
determinations (e.g., bench trials, motions to dismiss,
summary judgment motions, etc.), the Federal Circuit
also affirms, at least in part, approximately the same
percentage of decisions from the Eastern District of
Texas (82.1%) as from the Northern District of
California (89.2%) and the District of Delaware
(87.3%).*
Settlement. Petitioner's supporting amici curiae
further contend that the relatively lower rates of
dismissal and summary judgment in the Eastern
District of Texas result in so-called “patent trolls”
filing “nuisance lawsuits” there on the assumption
that the threat of trial will force defendants to settle
rather than incur steep legal defense costs.”” But the
data does not bear this out. For the last five years,
the percentage of patent cases that resulted in
settlement in the Eastern District of Texas (86%) was
only marginally higher than that of the District of
© See LegalMetrics, Nation Patent Litigation Report (April
2015) (reporting affirmance rates from January 1991 through
April 2015). The Central District of California had a much lower
affirmance rate (63.15%).
26 Td. Again, the Central District of California was affirmed
less often (67%) than the other patent litigation heavy districts.
21 See, e.g., Texas’s Amicus Curiae Brief at 12-14.
17
Delaware (79%), as well as the national average
(77%).*
In any event, Petitioners attack on the
settlement differential in the Eastern District of
Texas is at odds with the policy objectives animating
federal procedure. Specifically, the purpose of pre-
trial offers of judgment under Fed. R. Civ. P. 68 is “to
encourage the settlement of litigation.” Delta Air
Lines, Inc. v. August, 450 U.S. 346, 352 (1981). The
Eastern District of Texas’s settlement rate is thus
consistent with the spirit of Rule 68, which “provides
an additional inducement to settle in those cases in
which . . . the amount of recovery is uncertain.” Id.
Stays. The Eastern District of Texas also
regularly stays patent lawsuits in three
circumstances: (i) an inter partes review (“IPR”);” (ii)
reexamination proceedings by the U.S. Patent and
Trademark Office (“USPTO”); ® and/or (iii) the
%8 Lex Machina, http:/Aexmachina.com. Data collected from
“case outcomes” classified as “likely settlements.”
#° An IPR is a proceeding conducted by the Patent Trial
and Appeal Board to review the patentability of one or more
claims in a patent. Patent defendants often commence IPR
proceedings after a patent suit is filed in order to challenge the
patentability of the patent-in-suit.
8° A reexamination proceeding is a process whereby a
patent is reexamined by a patent examiner to verify that the
subject matter it claims is patentable. A request for
reexamination can be filed by anyone at any time during the
period of enforceability of the patent, including by a patent
defendant after the commencement of a patent suit.
18
resolution of litigation that was first filed in another
venue.
Contrary to the claims of amici curiae American
Bankers Association, e¢ al.,“ courts in the Eastern
District of Texas “have been nearly uniform in
granting motions to stay” following the initiation of
an IPR. Cellular Comms. Equip. v. Samsung Elecs.
Co., No. 6:14-cv-759, Dkt. 154 at *5 (E.D. Tex. Dec.
16, 2015) (Mitchell, J.).** From January 1, 2015
through February 12, 2017, for example, the Eastern
District of Texas granted 46 stays pending both pre-
and post-institution IPRs, amounting to a grant rate
of 63%." By comparison, during this same time
period the District of Delaware granted stay requests
60% of the time.*
The Eastern District of Texas also routinely
grants stays pending reexamination proceedings by
the USPTO. Motions for such stays filed between
January 1, 2015 and February 12, 2017 were granted
5! Brief for American Bankers’ Association, et al. as Amici
Curiae Supporting Petitioners, at 9-10.
#2 See also, NFC Tech. LLC v. HTC Am., Inc., No. 2:13-CV-
1058-WCB, 2015 U.S. Dist. LEXIS 29673, at *17—18 (E.D. Tex.
Mar. 11, 2015) (Bryson, J.) (recounting “Congress’s desire to
enhance the role of the PTO and limit the burden of litigation on
courts and parties” through the less burdensome IPR process).
33 Docket Navigator, https:/Awww.docketnavigator.com
/browse/results/34db2b6f-ef9c-04ba-a8c0-68 12fd09b33b (last
visited Feb 14, 2017) (running search for “Document Type:
Motion to Stay Pending Inter Partes Review”).
* Td.
19
50% of the time.” During this same time period, the
District of Delaware granted stay requests 53% of the
time.® The Eastern District of Texas also granted
84.6% of motions to stay pending resolution of related
cases from January 1, 2015 through February 12,
2017, while the District of Delaware granted 85.7% of
requested stays.’ The national average for all federal
district courts during this time period was 82.8%."
35 Docket Navigator, https://www.docketnavigator.com/
browse/results/b95eaf45-7964-4e 15-36 1d-0e9098563029 (last
visited Feb 14, 2017) (running search for “Document Type:
Motion to Stay Pending Reexamination”); see Syngor, Inc. v.
Vicor Corp., No. 2:14-cv-00287 (E.D. Tex. May 23, 2016);
ExitExchange Corp. v. FriendFinder Network, Inc., No. 2:13-cv-
00396 (E.D. Tex. Jan. 14, 20165).
3% Docket Navigator, https:/Avww.docketnavigator.com/
browse/resulta/b96eaf45-7964-4e 15-36 1d-0e9098563029 (last
visited Feb 14, 2017) (running search for “Document Type:
Motion to Stay Pending Reexamination”).
57 From January 1, 2015 through February 12, 2017, a stay
was granted by Eastern District of Texas 22 times. Docket
Navigator, https://www.docketnavigator.com/browse/results/
55cd3478-0361-5449-7dab-83f0c8c6acal (last visited Feb. 14,
2017) (running search for “Document Type: Stays Pending
Resolution of Related Proceedings”); see also Global Equity
Mgmt. (SA) PTY Lid. v. Ericsson Inc., No. 2:16-cv-00618 (E.D.
Tex. Jan. 25, 2017) (Payne, J.) (holding that “Amazon’s E.D. Va.
DJ action shall proceed first, while the 21 GEMSA E.D.TX.
suits shall be stayed, pending resolution” of Amazon’s Virginia
suit).
58 Docket Navigator, https://Awww.docketnavigator.com/
browse/resultsa/55cd3478-036 1-5449-7dab-83f0c9c6aca1 (last
visited Feb. 14, 2017) (running search for “Document Type:
Stays Pending Resolution of Related Proceedings”).
20
Transfers. Petitioner's supporting amici curiae
also err in asserting that the Eastern District of
Texas lags behind in granting transfer motions.”
Federal courts across the country grant motions to
transfer patent cases at approximately equivalent
rates, with slightly higher percentages in patent-
heavy districts. Over the last five years, for example,
the Eastern District of Texas and the Northern
District of California granted transfer motions at
approximately identical rates (72% and 71%,
respectively). “’ Additionally, the U.S. Court of
Appeals for the Federal Circuit hears petitions for
writ of mandamus filed by defendants whose transfer
motions are denied.“
In short, as an empirical matter, Petitioner’s
critique of the Eastern District of Texas is misplaced.
Nothing about that court is irregular or improper.
8° See, e.g., Texas’s Amicus Curiae Brief at 11-12.
40 Lex Machina, http//lexmachina.com. LexMachina
Motion Metrics Report was used to analyze all patent cases not
classified as “likely settlement” that terminated between
February 8, 2012 and February 8, 2017.
4! See, e.g., In re TS Tech U.S. Corp., 651 F.3d 1315, 1323
(Fed. Cir. 2008) (granting petition for writ of mandamus and
transferring case to the United States District Court for the
Southern District of Ohio); In re Microsoft Corp., Misc. No. 944,
2010 U.S. App. LEXIS 23121, at *10 (Fed. Cir. 2010) (granting
petition for writ of mandamus and transferring case to the
United States District Court for the Western District of
Washington).
21
IL Because § 1391(c) Is Clear, This Court Must
Reject Petitioner’s Invitation To Legislate
Under The Guise Of Statutory
Interpretation.
Petitioner and its supporting amici curiae
nonetheless raise additional policy arguments in an
attempt to convince the Court to override the plain
language of § 1391(c). In particular, they argue that
thirty years of precedent applying § 1391(c) to an
ambiguous term in § 1400(b) should be abandoned
because plaintiffs tend to forum shop if they have too
many venue options. Such policy arguments are for
the legislative branch, and have no bearing on the
straightforward reading of the statutory language at
issue in this case.
A. Obsolete Case Law Construing Old
Statutes Cannot Justify A Judicial
Override Of §1391(c)’s Definition Of
“Resides” “For All Venue Purposes.”
A foundational principle of statutory
interpretation is that “courts must presume that a
legislature says in a statute what it means and
means in a statute what it says there. When the
words of a statute are unambiguous, then, this first
canon is also the last: judicial inquiry is complete.”
Conn. Natl Bank v. Germain, 503 U.S. 249, 253-54
(1992) (internal citations and quotations omitted).
Because the venue statutes at issue here are
unambiguous, the Court’s only role is to enforce the
straightforward framework set up by Congress, not to
engage in any policy “fix” advocated by Petitioner.
Malley v. Briggs, 475 U.S. 335, 342 (1986) (“Our role
is to interpret the intent of Congress [], not to make a
22
freewheeling policy choice.”); Finn v. Meighan, 325
U.S. 300, 303 (1945) (“That being the policy adopted
by Congress, our duty is to enforce it.”).
The statutory scheme for venue in patent cases is
surely familiar to this Court. Section 1400(b) specifies
that “[alny civil action for patent infringement may
be brought in the judicial district where the
defendant resides,” but it does not define that term.
(Emphasis added). Congress revised and recodified
both § 1400(b) and § 1391(c) in 1948. Fourco Glass
Co., 353 U.S. at 223. The version of § 1391(c) that
governed in Fourco was titled “Venue generally” and
it applied “for venue purposes.” As a result, the
Fourco Court held that § 1391(c) did not supplement
§ 1400(b), and that for purposes of applying § 1400(b),
courts should equate “resident” with “inhabitant,”
which—under Shaw v. Quincy Mining Co., 145 U.S.
444, 450 (1892)—“mean|[t] the state of incorporation
only.” Fourco Glass Co., 353 U.S. at 226.
In 1988, Congress changed this formula by
amending §1391(c) to define a defendant
corporation’s “residency” as “any judicial district in
which such defendant is subject to the court’s personal
jurisdiction.” (Emphasis added). It also explicitly
made this definition apply “/fJor purposes of venue
under this chapter,” i.2., Chapter 87, which contains
§ 1400. (Emphasis added). Thus, consistent with its
constitutional prerogative, Congress in 1988
SE
#2 28 U.S.C. § 1391(c) (emphasis added). The original text,
the post-1988, and the post-2011 versions of this section, as well
as § 1400 and the accompanying Chapter 87 table of contents,
are included in Appendix A to this brief.
23
rendered Fourco obsolete and replaced Shaw’s
default definition of corporate residency in patent
suits with § 1391(c)’s personal jurisdiction standard.
Two years later, in VE Holding, the Federal Circuit
concluded that §1391(c)’s definition of “resides”
applied to § 1400(b). VE Holding, 917 F.2d at 1580.“
Just as VE Holding rebuffed efforts to
superimpose Fourco on the 1988 amendments, this
Court should reject Petitioner's plea to judicially
refashion the 2011 amendments. Numerous bills
have been proposed in Congress for limiting venue in
patent actions, but none have become law.“ As with
the 1988 amendments, Congress was no doubt aware
that it could have excepted patent cases from “all
venue purposes” in 2011, but instead chose to leave
in place the nearly thirty years of precedent applying
§1391(c) to determine corporate residence for
“S The VE Holding court rejected the argument that Fourco
permanently delinked § 1400(b) from § 1391(c), explaining that
“Section 1391(c) as it was in Fourco is no longer,” and that “[wle
now have exact and classic language of incorporation: ‘For
purposes of venue under this chapter.” 917 F.2d at 1579.
“Congress could readily have added ‘except for section 1400(b),’
if that exception, which we can presume was well known to the
Congress, was intended to be maintained.” Jd.
“4 See generally J. Jonas Anderson, Patent Dialogue, 92
N.C. L. REv. 1049, 1070-71 (May 2014) (noting that “[a]t various
times, Congress proposed fundamental changes to .. . the
patent venue statute,” but they were not included in “the most
comprehensive legislative reform of U.S. patent law in nearly
sixty years,” the Leahy-Smith America Invents Act, Pub. L. No.
112-29, 125 Stat. 284 (2011) (codified as amended at 35 U.S.C.
§§ 102, 282 (2012))).
24
purposes of venue in patent cases.“ This Court
should accordingly conclude that “all’ means all” in
§ 1391(c), and affirm the decision below. Cty. of
Oakland v. Fed. Housing Fin. Agency, 716 F.3d 935,
940 (6th Cir. 2013) (quotations omitted).
Petitioner's proposed judicial override of
Congress would only cause mischief requiring further
judicial intervention. For example, ignoring § 1391(c)
with respect to § 1400(b) would make venue over
foreign defendants undefined (and _ perhaps
impossible) by reading out the specification of
residency with respect to foreign defendants in
§ 1391(cX3). Moreover, a question would arise as to
whether §1391(c) should also be ignored in
determining venue in copyright cases under
§ 1400(a), which states that venue for actions
“relating to copyrights . . . may be instituted in the
district in which the defendant or his agent resides or
may be found.” These example problems show that
the thorough statutory framework put in place by
Congress, including by way of the 1988 and 2011
amendments, cannot and should not be disrupted by
courts, as urged by Petitioner.
“ Contrary to Petitioner's argument, the phrase “[e]xcept
as otherwise provided by law,” added to § 1391(a) by the 2011
amendments, dves not support resurrecting Fourco. Simply put.
Fourco was not the law in 2011. Rather, in 1988, Congress had
already abrogated Fourco by specifying that § 1391(c)’s
definition of corporate “residency” applied “for purposes of venue
under this chapter,” which expressly included § 1400. This was
the law just prior to the 2011 amendments, not Fourco from
1957 interpreting different statutory language.
25
B. Petitioner’s Forum Shopping
Arguments Are Irrelevant To The Task
Before The Court.
Petitioner nevertheless urges the Court to
rewrite longstanding venue rules in patent cases in
order to alter litigation practices like forum shopping.
This argument is inapposite. In numerous areas of
federal practice, including patent law and bankruptcy
law, scholars and legislatures have grappled with the
perceived evils of forum shopping for years.“* And
although forum shopping is an _ appropriate
consideration for courts applying the Erie doctrine in
the event of a conflict between state and federal law,
“we deal here with a congressional statute
apportioning the business of the federal courts.” Van
Dusen v. Barrack, 376 U.S. 612, 637 (1964)
(superseded by statute on other grounds). There is no
judicial leeway to rewrite the law in an effort to
apportion court business differently. “The short of the
matter is that a Federal Rule governing procedure is
valid whether or not it alters the outcome of the case
in a way that induces forum shopping.” Shady Grove
Orthopedic Assocs., P_A. v. Allstate Ins Co., 559 U.S.
393, 416 (2010). Forum shopping arguments are thus
irrelevant to the question whether “all” means “all” in
46 See, e.g., Kimberly A. Moore, Forum Shopping in Patent
Cases: Does Geographic Choice Affect Innovation, 74 N.C. L.
REV. 889 (2001); Lynn M. LoPucki & William C. Whitford,
Venue Choice and Forum Shopping in the Bankruptcy
Reorganization of Large, Publicly Held Companies, 1991 Wis. L.
REV. 11 (1991).
26
§ 1391(c). “To hold otherwise would be to ‘disembowel
either the Constitution’s grant of power over federal
procedure or Congress’s exercise of it.” Shady Grove,
559 U.S. at 416 (quoting Hanna v. Plumber, 380 U.S.
460, 472-73 (1965)).
Moreover, a reversion to Fourco’s common law
definition could create its own case management
problems, along with numerous’ unforeseen
consequences on U.S. corporations across the
country. In December 2015, for example, Texas-based
Ericsson filed suit against the California-based
Apple, Inc. (“Apple”) in the Eastern District of Texas,
alleging that Apple’s products infringed multiple
Ericsson patents relating to wireless communication
technology essential to Ericsson’s business. *’ If
Petitioner prevails, companies may no longer be able
to seek redress for patent infringement in their home
districts. Ericsson could be forced to file suits against
Silicon Valley competitors in the Northern District of
California or the District of Delaware. Not only would
this revamping of venue law impose increased
burdens on the patent-heavy dockets of those courts,
it could sow doctrinal inconsistencies in the wake of
three decades of personal jurisdiction-based venue in
patent cases.“ As such, it should be considered and
addressed—if at all—by Congress, not the courts.
‘7 Rricsson Inc. et al v. Apple Inc., No. 2-15-cv-00293 (E.D.
Tex. Feb 26, 2015).
48 See also, e.g., 3M v. HM Elecs., No. 0:12-cv-00553 (D.
Minn., Mar. 2, 2012) (a case where plaintiff 3M would have been
forced to litigate in the Southern District of California instead of
the District of Minnesota under Petitioner’s proposed reading of
27
C. Petitioner’s “Patent Troll” Rhetoric Is
Extraneous And Should Be Ignored.
Petitioner's supportive amici curiae go on to
claim that employing §1391(c)’s definition of
“resides” for all venue purposes, including in patent
cases, contributes to the “patent troll” nuisance value
problem.” In particular, they argue that defendants
are more apt to settle meritless patent suits in the
Eastern District of Texas because it is cheaper than
going to trial there. Nuisance value lawsuits are
hardly unique to the Eastern District of Texas,
however.™ The tactic of filing suit in the hopes of
achieving a favorable damages award is available in
any court in virtually any type of case. And as
discussed above, the Eastern District of Texas has a
settlement rate that is only marginally above the
national average.
§ 1400(b)); Westech Aerosol Corp. v. Newstar Adhesives, No.
3:17-cv-05082 (W.D. Wash. Feb. 2, 2017) (a case where plaintiff
Westech Aerosol Corporation, which is incorporated and based
in Washington, would have been forced to litigate in the District
of Delaware instead of the Western District of Washington
under Petitioner’s proposed reading of § 1400(b)).
*® Texas's Amici Curiae Brief at 13; Brief for American
Bankers’ et al. as Amici Curiae for Petitioner, at 16-17.
5° The assumption that so-called “patent trolls” are bad for
industry is not uniformly accepted. See Clifton B. Parker, Patent
Trolls Serve Valuable Role in Innovation, Stanford Expert Says,
STANFORD NEws (Feb. 23, 2015),
http://news.stanford.edu/2015/02/23/haber-patent-trolls-022315/
(last visited March 5, 2017).
28
Indeed, the data does not back up amici’s
suggestion that the Eastern District of Texas is a
renegade court run amok in patent cases. In 2016,
34% fewer patent cases were filed in the Eastern
District of Texas than in 2015; and as of February 22,
2017, that annualized number had dropped 29% as
compared to 2016, and 53% as compared to 2015."
Regardless, Petitioner's supporting amici curiae
have failed to explain how reducing the Eastern
District of Texas’s caseload will stop “patent trolls.”
To the contrary, a ruling in Petitioner’s favor would
only shift even more cases to other patent-heavy
districts such as the District of Delaware, where 9.2%
of all patent lawsuits were filed in 2016.” Applying a
common law “place-of-incorporation” definition to
§ 1400(b) would do nothing to prevent “patent trolls”
from filing nuisance value lawsuits in Delaware,
where over a million companies—nearly half of all
public corporations in the United States—are
incorporated.™
5! See Lex Machina, http-//lexmachina.com, examining
cases filed from January 1, 2015 to Dec, 31, 2015; filed from
January 1, 2016 to Dec 31, 2016; and filed from Jan. 1, 2017 to
Feb. 22, 2016. Results were generated both nationally and for
the Eastern District of Texas.
52 See Kevin Benton, New Patent Filings Down in 2016,
Lowest Since 2011: Report, Law360 (Oct. 11, 2016, 4:54 PM),
https://www law360.com/articles/85006 1/new-patent-filings-
down-in-20).
58 See Leslie Wayne, How Delaware Thrives as a Corporate
Tax Haven, N.Y. TIMES (June 30, 2012),
http://www .nytimes.com/2012/07/0 1/ business/how-delaware-
thrives-as-a-corporate-tax-haven html.
29
Petitioners policy arguments are uniformly
misplaced, and afford no basis for departing in this
case from Congress’s express statutory specification
that the definition of “reside” in 28 U.S.C. § 1391(c)
controls “(flor all venue purposes,” including for
patent suits under § 1400.
CONCLUSION
For the foregoing reasons, the Court should
affirm the decision below.
Respectfully submitted,
Thomas C. Goldstein
Austin, TX 78701
(512) 692-8700
March 8, 2017
la
UNITED STATES CODE
1952 Edition
Containing the General and Permanent Laws of the
United States, In Force on January 2, 1953
VOLUME THREE
Title 26 — Internal Revenue Code
To
Title 33 — Navigation and Navigable Waters
2a
Chapter 87 — District Courts; Venue
Sec.
1391. Venue generally.
1392. Defendants or property in different
districts in same State.
1393. Divisions; single defendant; defendants
in different divisions.
1394. Banking association’s action against
Comptroller of Currency.
1395. Fine, penalty or forfeiture.
1396. Internal revenue taxes.
1397. Interpleader.
1398. Interstate Commerce Commission’s
orders.
1399. Partition action involving United States.
1400. Patents and copyrights.
1401. Stockholder’s derivative action.
1402. United States as defendant.
1403. Eminent domain.
1404. Change of venue.
1406. Creation or alteration of district or
division.
1406. Cure or waiver of defects.
3a
§ 1391. Venue generally.
(a) A civil action wherein jurisdiction is founded
only on diversity of citizenship may, except as
otherwise provided by law, be brought only in the
judicial district where all plaintiffs or all defendants
reside.
(b) A civil action wherein jurisdiction is not
founded solely on diversity of citizenship may be
brought only in the judicial district where all
defendants reside, except as otherwise provided by
law.
(c) A corporation may be sued in any judicial
district in which it is incorporated or licensed to do
business or is doing business, and such judicial
district shall be regarded as the residence of such
corporation for venue purposes.
(d) An alien may be sued in any district.
(June 25, 1948, ch. 646, § 1, 62 Stat. 935.)
§ 1400. Patents and copyrights.
(a) Civil actions, suits, or proceedings arising
under any Act of Congress relating to copyrights may
be instituted in the district in which the defendant or
his agent resides or may be found.
(b) Any civil action for patent infringement may
be brought in the judicial district where the
defendant resides, or where the defendant has
committed acts of infringement and has a regular
and established place of business.
(June 25, 1948, ch. 646, § 1, 62 Stat. 936.)
4a
UNITED STATES CODE
1988 Edition
Containing the General and Permanent Laws of the
United States, In Force on January 3, 1989
VOLUME TWELVE
Title 27 — Intoxicating Liquors
To
Title 29 — Labor
5a
Chapter 87 — District Courts; Venue
Sec.
1391. Venue generally.
1392. Defendants or property in different
districts in same State.
[1393. Repealed.]
1394. Banking association’s action against
Comptroller of Currency.
1396. Fine, penalty or forfeiture.
1396. Internal revenue taxes.
1397. Interpleader.
1398. Interstate Commerce Commission’s
orders.
1398. Partition action involving United States.
1400. Patents and copyrights.
1401. Stockholder’s derivative action.
1402. United States as defendant.
1403. Eminent domain.
1404. Change of venue.
1405. Creation or alteration of district or
division.
1406. Cure or waiver of defects.
1407. Multidistrict litigation.
1408. Venue of cases under title 11.
1409. Venue of proceedings arising under title
11 or arising in or related to cases under title
11.
1410. Venue of cases ancillary to foreign
proceedings.
1411. Jury trials.
1412. Change of venue.
6a
§ 1391. Venue generally.
(a) A civil action wherein jurisdiction is founded
only on diversity of citizenship may, except as
otherwise provided by law, be brought only in the
judicial district where all plaintiffs or all defendants
reside, or in which the claim arose.
(b) A civil action wherein jurisdiction is not
founded solely on diversity of citizenship may be
brought only in the judicial district where all
defendants reside, or in which the claim arose, except
as otherwise provided by law.
(c) For purposes of venue under this chapter, a
defendant that is a corporation shall be deemed to
reside in any judicial district in which it is subject to
personal jurisdiction at the time the action is
commenced. In a State which has more than one
judicial district and in which a defendant that is a
corporation is subject to personal jurisdiction at the
time an action is commenced, such corporation shall
be deemed to reside in any district in that State
within which its contacts would be sufficient to
subject it to personal jurisdiction if that district were
a separate State, and, if there is no such district, the
corporation shall be deemed to reside in the district
within which it has the most significant contacts.
(d) An alien may be sued in any district.
(e) A civil action in which a defendant is an
officer or employee of the United States or any
agency thereof acting in his official capacity or under
color of legal authority, or an agency of the United
States, or the United States, may, except as
otherwise provided by law, be brought in any judicial
7a
district in which (1) a defendant in the action resides,
or (2) the cause of action arose, or (3) any real
property involved in the action resides, or (4) the
plaintiff resides if no real property is involved in the
action. Additional persons may be joined as parties
to any such action in accordance with the Federal
Rules of Civil Procedure and with such other venue
requirements as would be applicable if the United
States or one of its officers, employees, or agencies
were not a party. The summons and complaint in
such an action shall be served as provided by the
Federal Rules of Civil Procedure except that the
delivery of the summons and complaint to the officer
or agency as required by the rules may be made by
certified mail beyond the territorial limits of the
district in which the action is brought.
(f) A civil action against a foreign state as defined
in section 1603(a) of this title may be brought—
(1) in any judicial district in which a
substantial part of the events or omissions giving rise
to the claim occurred, or a substantial part of
property that is the subject of the action is situated;
(2) in any judicial district in which the vessel
or cargo of a foreign state is situated, if the claim is
asserted under section 1605(b) of this title;
(3) in any judicial district in which the agency
or instrumentality is licensed to do business or is
doing business, if the action is brought against an
agency or instrumentality of a foreign state as
defined in section 1603(b) of this title; or
8a
(4) in the United States District Court for the
District of Columbia if the action is brought against a
foreign state or political subdivision thereof.
(June 25, 1948, ch. 646, § 1, 62 Stat. 935; Oct. 5,
1962, Pub. L. 87-748, § 2, 76 Stat. 744; Dec. 23, 1963,
Pub. L. 88-234, 77 Stat. 473; Nov. 2, 1966, Pub. L. 89-
714, §§ 1, 2, 80 Stat. 1111; Oct. 21, 1976, Pub. L. 94-
574, § 3, 90 Stat. 2721; Oct. 21, 1976, Pub. L. 94-583,
§ 5, 90 Stat. 2897; Nov. 19, 1988, Pub. L. 100-702,
title X, § 1013(a), 102 Stat. 4669.)
§ 1400. Patents and copyrights.
(a) Civil actions, suits, or proceedings arising
under any Act of Congress relating to copyrights or
exclusive rights in mask works may be instituted in
the district in which the defendant or his agent
resides or may be found.
(b) Any civil action for patent infringement may
be brought in the judicial district where the
defendant resides, or where the defendant has
committed acts of infringement and has a regular
and established place of business.
(June 25, 1948, ch. 646, § 1, 62 Stat. 936; Nov. 19,
1998, Pub. L. 100-702, title X, § 1020(a\5), 102 Stat.
4671.)
9a
UNITED STATES CODE
2012 Edition
Containing the General and Permanent Laws of the
United States Enacted Through the 112th Congress
(ending January 2, 2013, the last law of which was
signed on January 15, 2013)
VOLUME TWENTY-ONE
Title 27 — Intoxicating Liquors
To
Title 28 — Judiciary and Judicial Procedure
10a
Chapter 87 -— District Courts; Venue
Sec.
1390. Scope.
1391. Venue generally.
(1392, 1393. Repealed.|
1394. Banking association’s action against
Comptroller of Currency.
1395. Fine, penalty or forfeiture.
1396. Internal revenue taxes.
1397. Interpleader.
1398. Interstate Commerce Commission’s
orders.
1399. Partition action involving United States.
1400. Patents and copyrights, mask works, and
designs.
1401. Stockholder’s derivative action.
1402. United States as defendant.
1403. Eminent domain.
1404. Change of venue.
1405. Creation or alteration of district or
division.
1406. Cure or waiver of defects.
1407. Multidistrict litigation.
1408. Venue of cases under title 11.
1409. Venue of proceedings arising under title
11 or arising in or related to cases under title
11.
1410. Venue of cases ancillary to foreign
proceedings.
1411. Jury trials.
1412. Change of venue.
1413. Venue of cases under chapter 5 of title 3.
lla
§ 1391. Venue generally.
(a) APPLICABILITY OF SECTION.—Except as
otherwise provided by law—
(1) this section shall govern the venue of all
civil actions brought in district courts of the United
States; and
(2) the proper venue for a civil action shall be
determined without regard to whether the action is
local or transitory in nature.
(b) VENUE IN GENERAL.—A civil action may be
brought in—
(1) a judicial district in which any defendant
resides, if all defendants are residents of the State in
which the district is located;
(2) a judicial district in which a substantial
part of the events or omissions giving rise to the
claim occurred, or a substantial part of property that
is the subject of the action is situated; or
(3) if there is no district in which an action
may otherwise be brought as provided in this section,
any judicial district in which any defendant is subject
to the court’s personal jurisdiction with respect to
such action.
(c) RESIDENCY.—For all venue purposes—
(1) a natural person, including an alien
lawfully admitted for permanent residence in the
United States, shall be deemed to reside in the
judicial district in which that person is domiciled;
(2) an entity with the capacity to sue and be
sued in its common name under applicable law,
12a
whether or not incorporated, shall be deemed to
reside, if a defendant, in any judicial district in which
such defendant is subject to the court’s personal
jurisdiction with respect to the civil action in
question and, if a plaintiff, only in the judicial district
in which it maintains its principal place of business;
and
(3) a defendant not resident in the United
States may be sued in any judicial district, and the
joinder of such a defendant shall be disregarded in
determining where the action may be brought with
respect to other defendants.
(d) RESIDENCY OF CORPORATIONS IN STATES WITH
MULTIPLE DISTRICTS.—For purposes of venue under
this chapter, in a State which has more than one
judicial district and in which a defendant that is a
corporation is subject to personal jurisdiction at the
time an action is commenced, such corporation shall
be deemed to reside in any district in the State
within which its contacts would be sufficient to
subject it to personal jurisdiction if that district were
a separate State, and, if there is no such district, the
corporation shall be deemed to reside in the district
in which it has the most significant contacts.
(e) ACTIONS WHERE DEFENDANT IS OFFICER OR
EMPLOYEE OF THE UNITED STATES.—
(1) IN GENERAL.—A civil action in which a
defendant is an officer or employee of the United
States or any agency thereof acting in his official
capacity or under color of legal authority, or an
agency of the United States, or the United States,
may, except as otherwise provided by law, be brought
13a
in any judicial district in which (A) a defendant in the
action resides, (B) a substantial part of the events or
omissions giving rise to the claim occurred, or a
substantial part of property that is the subject of the
action is situated, or (C) the plaintiff resides if no real
property is involved in the action. Additional persons
may be joined as parties to any such action in
accordance with the Federal Rules of Civil Procedure
and with such other venue requirements as would be
applicable if the United States or one of its officers,
employees, or agencies were not a party.
(2) SERVICE.—The summons and complaint in
such an action shall be served as provided by the
Federal Rules of Civil Procedure except that the
delivery of the summons and complaint to the officer
or agency as required by the rules may be made by
certified mail beyond the territorial limits of the
district in which the action is brought.
(f) CrviL ACTIONS AGAINST A FOREIGN STATE.—A
civil action against a foreign state as defined in
section 1603(a) of this title may be brought—
(1) in any judicial district in which a
substantial part of the events or omissions giving rise
to the claim occurred, or a substantial part of
property that is the subject of the action is situated;
(2) in any judicial district in which the vessel
or cargo of a foreign state is situated, if the claim is
asserted under section 1605(b) of this title;
(3) in any judicial district in which the agency
or instrumentality is licensed to do business or is
doing business, if the action is brought against an
l4a
agency or instrumentality of a foreign state as
defined in section 1603(b) of this title; or
(4) in the United States District Court for the
District of Columbia if the action is brought against a
foreign state or political subdivision thereof.
(g) MULTIPARTY, MULTIFORM LITIGATION.—A civil
action in which jurisdiction of the district court is
based upon section 1369 of this title may be brought
in any district in which any defendant resides or in
which a substantial part of the accident giving rise to
the action took place.
(June 25, 1948, ch. 646, 62 Stat. 935; Pub. L. 87—748,
§ 2, Oct. 5, 1962, 76 Stat. 744; Pub. L. 88-234, Dec.
23, 1963, 77 Stat. 473; Pub. L. 89~714, §§ 1, 2, Nov. 2,
1966, 80 Stat. 1111; Pub. L. 94-574, § 3, Oct. 21,
1976, 90 Stat. 2721; Pub. L. 94-583, § 5, Oct. 21,
1976, 90 Stat. 2897; Pub. L. 100~702, title X, §
1013(a), Nov. 19, 1988, 102 Stat. 4669; Pub. L. 101-—
650, title ITI, § 311, Dec. 1, 1990, 104 Stat. 5114; Pub.
L. 102—198, § 3, Dec. 9, 1991, 105 Stat. 1623; Pub. L.
102-572, title V, § 504, Oct. 29, 1992, 106 Stat. 4513;
Pub. L. 104-34, § 1, Oct. 3, 1995, 109 Stat. 293; Pub.
L. 107-273, div. C, title I, § 11020(bX(2), Nov. 2, 2002,
116 Stat. 1827; Pub. L. 112-63, title II, § 202, Dec. 7,
2011, 125 Stat. 763.)
§ 1400. Patents and copyrights, mask works,
and designs.
(a) Civil actions, suits, or proceedings arising
under any Act of Congress relating to copyrights or
exclusive rights in mask works or designs may be
15a
instituted in the district in which the defendant or
his agent resides or may be found.
(b) Any civil action for patent infringement may
be brought in the judicial district where the
defendant resides, or where the defendant has
committed acts of infringement and has a regular
and established place of business.
(June 25, 1948, ch. 646. 62 Stat. 936; Pub. L. 100-702,
title X, § 1020(a(5), Nov. 19, 1988, 102 Stat. 4671;
Pub. L. 105-304, title V, §503(c)(1), (2), Oct. 28, 1998,
112 Stat. 2917; Pub. L. 106-44, §2(a), Aug. 5, 1999,
113 Stat. 223.)
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.