Venue in Patent Suits

//Venue in Patent Suits

Venue in Patent Suits

Venue in Patent Suits

RESOLVED, that IPO confirms its support for legislation to limit venue in patent suits in order to curb forum shopping by patent owners and, specifically, IPO supports an amendment to 28 U.S.C. § 1400(b) to limit venue to a judicial district as follows:

A) In a patent infringement action brought by a patent owner against an accused infringing defendant, venue should be limited to a judicial district:

1. where the defendant has its principal place of business or is incorporated, or if the defendant is an individual, where the defendant resides;

2. where the defendant has committed acts of infringement and has a regular and established physical facility where defendant’s acts of infringement have occurred;

3. where technological activities relating to the invention that led to the application for the patent(s)-in-suit – such as inventing, substantial research and development, or manufacturing – have taken place;

4. where a plaintiff or a subsidiary has a regular place of business, not operated primarily for the purpose of creating venue, that is engaged in substantial: (a) management of research and development or manufacturing activities for a product or process related to the patent or patents in dispute; (b) research and development of a product or process related to the patent(s) in dispute; or (c) manufacturing activities of a product or process related to the patent(s) in dispute;

5. where the defendant has agreed or consented to be sued in the instant action; or

6. where, for foreign defendants that do not meet any of the above, venue would be proper according to 28 U.S.C. § 1391(c)(3).

B) Foreign Defendants – Motion to Transfer. In civil actions where venue is established against a foreign defendant, a district court shall transfer the civil action against the foreign defendant, and any related entities, upon motion by such foreign defendant showing that:

1. it is the parent of, subsidiary of, or shares at least 50% common ownership with a United States resident entity, and

2. such United States entity (a) has a substantial presence in the United States, and (b) has imported, made, used, sold, or offered for sale the same accused product or process that forms the basis of the claim asserted against the foreign defendant, as long as the United States entity did not perform such acts primarily for the purpose of creating venue.

Upon such a showing by the foreign defendant, the court shall transfer the civil action to any district or division where venue would be proper as to any United States resident entity satisfying (B)(1) and B(2) and the foreign defendant, including a district or division where related litigation is currently pending.

The foreign defendant must file its motion to transfer before answering or otherwise moving against the complaint, and the district court shall rule on a motion for a temporary restraining order if the plaintiff files such a motion before the motion to transfer.

C) Effect of Retail Sales. For the purposes of determining venue, a facility intended primarily for retail sales of consumer products by a retailer will only constitute a regular and established facility with respect to the offer for sale or sale of such consumer products when the plaintiff brings suit in the district where the facility is located and has also brought suit in the same district in the same action against a separate entity responsible for manufacturing or distributing the accused product.

A retailer is an entity (or its affiliate) that generates revenues predominately through the sale to the public of consumer products, but specifically does not include an entity (or its affiliate) that is also (or is separately) responsible for manufacturing, causing the manufacture of, or distributing the accused products, or relevant parts thereof.