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TC Heartland Leads to Retroactive Venue Challenges

By George Khoury, Esq. on November 17, 2017 | Last updated on March 21, 2019

The Circuit Court of Appeals for the Federal Circuit explained in the recent In Re: Micron Technology opinion that the huge SCOTUS TC Heartland decision effectively changed the law on venue in patent cases. That change is causing ripple effects for cases in active litigation, and the ripples might take some time to work their way out of the system.

Essentially, SCOTUS ruled in TC Heartland to limit patent infringement venue to the location of the infringement or the infringer's principal place of business. Because of that ruling, scores of patent cases became eligible for dismissal on grounds of improper venue. But there's a catch, and the Federal Circuit has made it a little easier for those on the receiving end of an infringement case.

What's the Catch?

Improper venue can only be raised on a rule 12 motion, which, once it gets filed, if it doesn't include a challenge to the venue, that argument is considered waived. To that end, the Federal Circuit was asked to decide if that catch could justify an exception to the Rule 12 motion use it or lose it procedure. Fortunately for patent defendants, the Federal Circuit just ruled that that waiver of the challenge to venue doesn't apply to a TC Heartland based challenge to venue, though the court advised lower courts to consider how far along a case is before dismissing based on venue.

As such, defendants that would have ordinarily been considered to have waived their right to file a motion to dismiss based on improper venue in patent infringement actions could have that waiver un-waived. In short, the court reasoned that in cases where the motion to dismiss was heard before TC Heartland was decided, that the venue argument could not have been waived because it was not available.

Couldn't Use It? Can't Lose It!

Normally, the "use it or lose it" rule applies to most procedural defenses, including improper venue. If you don't bring it up in a rule 12 motion, and the pleadings get settled, you probably won't be able to bring it back up, except on appeal, maybe.

Though normally courts tend to avoid making rules that could open the floodgates of litigation, the floodgates opened by the Federal Circuit due to In Re: Micron are anticipated to lead to a deluge of dismissals.

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