Intellectual Property Practice: Well-Positioned in a Post-TC Heartland World

Tuesday, July 11, 2017

As the patent litigation landscape changes, Morgan Lewis continues to stay ahead of evolving client needs.

In one of its most closely watched cases, the US Supreme Court recently issued a ruling that is expected to significantly impact where patent suits can be filed in the United States. In TC Heartland v. Kraft Foods Group Brands LLC, the justices held unanimously that the “residence” of a domestic corporation is the state of its incorporation, overruling previous precedent holding that, for patent venue purposes, a corporation resides anywhere that it has sufficient contacts to subject it to personal jurisdiction.

We recently spoke with Morgan Lewis partner Eric Kraeutler—global leader of the firm’s intellectual property practice and a member of the firm’s litigation practice—about the implications of the TC Heartland decision and how Morgan Lewis is preparing for the expected changes.

How will the decision affect where patent cases are filed? Which jurisdictions are likely to see a rise in patent cases?

Many predict that the TC Heartland case will dramatically change the landscape of US patent litigation. For the last several years, more than 40% of all US patent infringement cases have been filed in the Eastern District of Texas. With the changes to patent venue law, many more cases are expected to be filed in the District of Delaware, where many companies are incorporated; California, where many technology and life science companies are headquartered or have regular and established places of business; and other jurisdictions such as the Northern District of Illinois, the District of New Jersey, and the District of Massachusetts, which are homes to significant US corporations. Some have predicted that as many as 500 additional cases will be filed in the Delaware court alone.

What does this mean for the Eastern District of Texas?

We expect the Eastern District of Texas to remain a very important forum for patent disputes. With its depth of experience and well-established procedures, the Eastern District is likely to remain an attractive forum for patent holders, and the Supreme Court has not closed the doors to all who might seek to file there. In particular, the Supreme Court has not addressed the residence of either foreign corporations or domestic enterprises other than corporations. Furthermore, corporations with regular and established places of business in the Eastern District of Texas that are alleged to have committed acts of infringement in the district will continue to be subject to suit there under a second prong of the patent venue statute that, until now, didn’t get a lot of attention.

What are some of the adjustments that the federal courts have made to prepare for the expected changes?

Anticipating the expected influx of cases to the Delaware court, four judges from the Eastern District of Pennsylvania have been appointed to handle District of Delaware patent cases. Through our Philadelphia office, we are familiar with all of these judges and have litigated patent disputes before some of them.

How can Morgan Lewis help clients in this changing landscape?

As one of the few national law firms with an office in Wilmington, we already are positioned to serve the needs of clients with patent litigation needs in Delaware. Our office managing partner, Colm Connolly, is recognized as one of the top trial lawyers in Delaware and is highly respected among Delaware’s federal judges. Colm will soon be joined in Wilmington by John Gorman, one of the co-leaders of our intellectual property disputes practice. John already has significant Delaware federal court trial experience and will begin working from the Wilmington office in September. The addition of John to the Wilmington office will greatly enhance our ability to serve client needs in Delaware, and we look forward to continuing to build our Delaware team. Many other intellectual property litigation partners and associates already have significant Delaware experience, so we are well-positioned for the expected increase in Delaware patent litigation filings.

We also have strong trial teams with knowledge of the local courts and their patent procedures in California, Chicago, and Boston—where increased filings are expected.

Finally, we expect our Houston-based patent litigation practice to remain active in Texas patent litigation matters and also to become increasingly active in other forums, where their trial skills and knowledge of non-practicing entities and their counsel will bring added value to our clients.