In Re: Tc Heartland LLC
821 F.3d 1338
Fed. Cir.2016Background
- Heartland (Indiana LLC) was sued in the District of Delaware by Kraft (Delaware LLC) for patent infringement of liquid water-enhancer products.
- Heartland moved to dismiss for lack of personal jurisdiction and alternatively to dismiss or transfer for improper venue.
- Heartland admitted it shipped accused products into Delaware pursuant to contracts with two national accounts (44,707 cases in 2013; ≈2% of its sales of that product; ≈$331,000 revenue).
- The Magistrate Judge applied Federal Circuit precedent (notably Beverly Hills Fan) to find specific personal jurisdiction based on purposeful shipments into Delaware and recommended denying Heartland’s motions.
- The district court adopted the report and denied Heartland’s motions; Heartland petitioned the Federal Circuit for a writ of mandamus.
- The Federal Circuit denied mandamus, holding Heartland’s venue and jurisdiction arguments are foreclosed by settled precedent (VE Holding and Beverly Hills Fan) and Heartland failed to show a clear and indisputable right to relief.
Issues
| Issue | Plaintiff's Argument (Kraft) | Defendant's Argument (Heartland) | Held |
|---|---|---|---|
| Proper venue under 28 U.S.C. §1400(b) | §1391(c)’s corporate-residence definition applies to patent venue (VE Holding applies) | 2011 amendments to §1391 ("except as otherwise provided by law") resurrect Fourco common-law definition, so Heartland does not "reside" in Delaware | VE Holding still controls; §1391(c) applies to §1400(b); mandamus denied |
| Specific personal jurisdiction (Due Process) | Delaware has specific jurisdiction because Heartland purposefully shipped accused products into Delaware and the claims arise from those shipments | Walden and the principle that each act of infringement is a separate cause of action limit jurisdiction to only those acts occurring in Delaware; Heartland contests purposeful availment for even the Delaware shipments | Beverly Hills Fan controls: purposeful shipments into forum via distribution channel satisfy minimum contacts; jurisdiction is reasonable; mandamus denied |
| Whether Supreme Court’s later decisions (Atlantic Marine, Walden) displaced Federal Circuit precedent | N/A (Kraft relies on existing Federal Circuit law) | Argued Atlantic Marine footnote and Walden undermine VE Holding/Beverly Hills Fan | Court: those Supreme Court statements do not overturn or displace controlling Federal Circuit precedent here |
| Entitlement to mandamus | N/A | Mandamus warranted because district court erred as a matter of law | Petitioner failed to show a clear, indisputable right; extraordinary writ denied |
Key Cases Cited
- Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir.) (stream-of-commerce shipments into forum can supply specific jurisdiction)
- VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir.) (§1391(c) definition of corporate residence applies to §1400(b))
- Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222 (U.S.) (pre-1988 common-law definition of patent venue residence)
- Atlantic Marine Constr. Co. v. U.S. Dist. Court, 134 S. Ct. 568 (U.S.) (distinguishing general and specific venue provisions)
- Walden v. Fiore, 134 S. Ct. 1115 (U.S.) (personal-jurisdiction focus on defendant’s forum contacts)
- Cheney v. U.S. Dist. Court for the Dist. of Columbia, 542 U.S. 367 (U.S.) (standards for issuing writ of mandamus)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (U.S.) (minimum contacts and reasonableness for personal jurisdiction)