June 15, 2017
On May 22, 2017, the U.S. Supreme Court narrowed the scope of proper venue for patent infringement actions for domestic corporations. See TC Heartland LLC v. Kraft Foods Grp. Brands LLC, No. 16-341 (May 22, 2017). The TC Heartland decision reverses the approach to venue previously adopted by the U.S. Court of Appeals for the Federal Circuit, which had held for 27 years that a domestic corporation can be sued for patent infringement anywhere that corporation was subject to personal jurisdiction. The previous approach enabled what has been perceived as rampant forum shopping by patent-infringement plaintiffs, particularly non-practicing entities. The Supreme Court’s decision provides new opportunities for defendants sued in undesirable forums to challenge improper venue. The strategy and considerations will vary depending on the state of the case and other factual matters, as we explore below. And because the application of TC Heartland raises numerous unsettled questions, it will be important for defendants to begin positioning their cases for appeal starting from the filing of a motion to dismiss or to transfer. Plaintiffs, on the other hand, should begin developing facts showing that venue is proper under the TC Heartland approach and should develop their arguments that defendants have waived their venue challenges.
The special venue statute for patent infringement actions, 28 U.S.C. § 1400(b), has two provisions permitting venue: " where the defendant resides, or  where the defendant has committed acts of infringement and has a regular and established place of business."
Since the enactment of that statute, the Supreme Court consistently has interpreted Section 1400(b)’s first provision of proper venue—"where the defendant resides"—as limited to the location where the defendant was incorporated if the defendant is a domestic corporation. E.g., Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 226 (1957).
In 1990, however, based on a modification to the general venue statute that Congress had enacted two years earlier in 28 U.S.C. § 1391(c), the Federal Circuit held that Fourco and its predecessors no longer governed. VE Holding, 917 F.2d at 1579. The Federal Circuit held that the modification to the general venue statute redefined the meaning of "resides" in Section 1400(b) to permit venue in any district where a corporation is subject to personal jurisdiction. Id. at 1580, 1583. This expansive interpretation, which stood for 27 years, allowed for what is widely perceived as forum shopping by plaintiffs in patent-infringement suits.
The Supreme Court overturned this regime in TC Heartland. The Court reaffirmed its earlier holding that a domestic corporation "resides" only in its state of incorporation and thereby abrogated VE Holding. TC Heartland, slip op. at 2, 10. As a result, a domestic corporation may now be sued for patent infringement only in its state of incorporation or where it has committed acts of infringement and has a regular and established place of business.
Because VE Holding had extended venue to the limits of personal jurisdiction, defendants rarely contested the propriety of venue during the 27 years VE Holding governed. The biggest hurdle to challenging venue for many defendants will therefore be convincing the court that they have not waived their venue objections. There are, however, a number of exceptions to the waiver doctrine that may be available, depending on the jurisdiction and the procedural posture of the case.
An objection to improper venue must be "timely and sufficient." 28 U.S.C. § 1406(b). Typically, venue is challenged via a motion to dismiss or transfer for improper venue under Federal Rule of Civil Procedure 12(b)(3). But that objection is waived if it is omitted from the defendant’s first motion to dismiss or answer. Fed. R. Civ. P 12(h)(1). Thus, the best practice is to challenge venue prior to answering a complaint—although including a venue challenge in the initial answer also preserves the issue.
A defendant, however, that did not challenge venue at the outset of the case may be able to resurrect a waived challenge to venue due to the new TC Heartland decision. That is because courts have applied their equitable authority to excuse waiver of a defense that only became "available" after the time for the defendant to raise the argument has passed. Because "[r]egional circuit law governs the question of wavier of a defense," there may be some variation among the circuits in addressing waiver. Ultra-Precision Mfg., Ltd. v. Ford Motor Co., 411 F.3d 1369, 1376 (Fed. Cir. 2005). But courts regularly excuse waiver when the defense previously was "unavailable" because "it was for all practical purposes impossible for the defendants to interpose their respective defenses at the time of the answer." Chatman-Bey v. Thornburgh, 864 F.2d 804, 813 n.9 (D.C. Cir. 1988).
For example, a waivable Rule 12 defense like improper venue is not waived if it became available due to intervening Supreme Court authority (e.g., In re Vivendi Universal, S.A. Sec. Litig., 765 F. Supp. 2d 512, 532 (S.D. N.Y. 2011) (collecting cases from various circuits); see, e.g., Chatman-Bey, 864 F.2d at 813 n.9 (Rule 12 defense not waived "if its legal basis did not exist at the time of the answer or pre-answer motion")), or if the defense is based on facts that were not available to defendant at the time of the purported waiver. E.g., Ambriz v. Coca Cola Co., 2014 WL 296159, at *2 (N.D. Cal. Jan. 27, 2014) (venue defense not waived because plaintiff failed to put the defendant on notice regarding the plaintiff’s true residence and work history).
A plaintiff may contend that a defendant’s venue challenge always was available under Fourco. Courts, however, are likely to forgive a defendant for failing to lodge a defense that was foreclosed by decades of controlling circuit precedent. Even the strictest courts excuse waiver when the argument "would have been directly contrary to controlling precedent in [the] Circuit." Hawknet, Ltd. v. Overseas Shipping Agencies, 590 F.3d 87, 92 (2d Cir. 2009); see also Am. Fidelity Assur. Co. v. Bank of N.Y. Mellon, 810 F.3d 1234, 1242 n.4 (10th Cir. 2016) (waiver exception applies only where "precedent did not allow the defense and [the new rule] did"); Gucci Am., Inc. v. Weixing Li, 768 F.3d 122, 135 (2d Cir. 2014) (not waiver if the argument is contrary to controlling circuit precedent). Because the new Supreme Court decision—TC Heartland—overruled previously controlling circuit precedent foreclosing the argument—VE Holding—courts may be inclined to excuse waiver under Rule 12(h). See Holzsager v. Valley Hosp., 646 F.2d 792, 796 (2d Cir. 1981).
Even if a district court deems the venue objection waived, it might transfer sua sponte or consider a motion to transfer regardless of waiver. Those courts reason that "waiver is not an issue because § 1406 specifically provides that the district court may act to transfer a matter even if a ‘party … does not interpose [a] timely and sufficient objection to venue.’" Wright v. Comm’r of Soc. Sec., 2008 WL 2246043, at *3 (E.D. Mich. May 30, 2008) (quoting 28 U.S.C. § 1406(b)) (alteration in original); see, e.g., Manley v. Engram, 755 F.2d 1463, 1468–71 (11th Cir. 1985) (granting plaintiff’s motion to transfer even though "the defendant expressly assented to venue in his answer"); see also, e.g., Butz v. Schleig, 2009 WL 971410, at *1 n.2 (D.N.J. Apr. 7, 2009) (district court may "transfer under Section 1406(a) where [it] sua sponte raise[s] venue issue"); Weiss v. Credit Suisse First Boston, 2003 WL 115252, at *1 (N.D. Ill. Jan. 10, 2003) (ruling on venue on its own motion); United Fin. Mortg. Corp. v. Bayshores Funding Corp., 245 F. Supp. 2d 884, 896 (N.D. Ill. 2002) ("It is appropriate for this Court to consider a transfer under this section sua sponte."). But as this practice is not uniform or predictable, a party should not count on a court’s forgiveness and should take all steps necessary to present its strongest case for an exception to any potential waiver.
Two common scenarios where venue potentially has been waived are where venue was conceded prior to the Supreme Court’s TC Heartland decision or where venue was unsuccessfully challenged given the prevailing VE Holding standard at the time. Both are analyzed below.
Venue Conceded Prior to TC Heartland. Where venue was not challenged pre-TC Heartland, and the defendant already has answered or filed a motion to dismiss, the defendant normally would be held to have waived a challenge to venue. There are two major avenues for raising a new venue challenge in this circumstance after TC Heartland.
The first avenue is to argue that the improper venue defense was not "available" until after TC Heartland and thus that waiver should thus be excused. To do so requires proving that the venue defense, which was not viable under controlling precedent in VE Holding, is now viable under TC Heartland. This showing may require a defendant to (1) admit that it is subject to personal jurisdiction in the forum (making the venue defense unavailable under VE Holding) and (2) establish that it is not incorporated in the forum state and that it either did not commit acts of infringement or does not have "a regular and established place of business" in the district under Section 1400(b) (making the defense available now under TC Heartland).
In addition and in the alternative, a motion to transfer for convenience under 28 U.S.C. § 1404(a) should be raised. Because a motion to transfer venue under Section 1404(a) is not a "defense" that must be raised in a pre-answer motion or responsive pleading, it is still available even if venue is waived. E.g., Allen v. U.S. Dep’t of Homeland Sec., 514 F. App’x 421, 422 & n.5 (5th Cir. 2013) ("a party may seek a § 1404(a) transfer of venue after filing its first responsive pleading"); Brown v. Federated Capital Corp., 991 F. Supp. 2d 857, 860 (S.D. Tex. 2014) (no waiver under Section 1404(a) even though the defendant did not "plead improper venue in the initial responsive pleading"); Johnson v. United Airlines, Inc., 2013 WL 323404, at *3 (N.D. Ill. Jan. 25, 2013) (a defendant’s waiver of improper venue "does not foreclose it from seeking transfer under § 1404(a)").
Moreover, a combined motion under Sections 1406(a) and 1404(a) is recommended, because courts sometimes have used Section 1404 to transfer from an improper forum even though no venue objection was pleaded. See, e.g., Jones v. Hawk-Sawyer, 2003 WL 145029, at *7–8 (N.D. Tex. Jan. 15, 2003). A party can always argue in the alternative that the court should, at minimum, transfer under Section 1404(a) even if it does not (or could not due to waiver) transfer under Section 1406—although this may meet with some resistance if the judge adopts a formalistic view that Sections 1404 and 1406 address distinct situations.
Venue Previously Challenged Under Pre-TC Heartland Law. In addition to the combined motion discussed above, parties that unsuccessfully challenged venue under the pre-TC Heartland law may also move for reconsideration. For example, on May 12, 2017, just ten days before TC Heartland was decided, one district court denied a motion to dismiss for improper venue under then-"existing law regarding venue in a patent infringement action." Snyders Heart Valve LLC v. St. Jude Med. S.C., Inc., No. 4:16-CV-00812 (E.D. Tex. May 12, 2017) (Dkt. 98). This sort of decision is ripe for challenge on reconsideration.
Various local rules may permit reconsideration or the court may act on its general authority under Rule 54(b) to "revise" its prior ruling "at any time before the entry of a judgment." "[A]n intervening change in controlling law" is a widely accepted ground for reconsideration. Bd. of Trs. of Bay Med. Ctr. v. Humana Military Healthcare Servs., Inc., 447 F.3d 1370, 1377 (Fed. Cir. 2006); accord, e.g., Wannall v. Honeywell Int’l, Inc., 292 F.R.D. 26, 32 (D.D.C. 2013). Thus, if "the governing law [was] altered," the previous decision "applied the old law," and the new law "compel[s] a different result under the facts of the particular case," the court should reconsider and reverse its earlier decision. Dow Chem. Co. v. Nova Chem. Corp. (Can.), 803 F.3d 620, 629 (Fed. Cir. 2015) (reconsidering definiteness ruling after Nautilus).
Moreover, for cases on appeal to the Federal Circuit, if the defendant previously challenged venue in the district court and properly preserved the issue for appeal, then that issue can be addressed by the Federal Circuit under the new TC Heartland standard. See Oplus Techs., Ltd. v. Vizio, Inc., 782 F.3d 1371, 1374 (Fed. Cir. 2015) (vacating denial of fee award and remanding for reconsideration after Octane Fitness). Depending on the current posture of the appeal, it may make sense to raise the issue in an opening brief or as a motion to remand under Federal Rule of Appellate Procedure 27(f).
TC Heartland did not limit venue to just the state of incorporation of the defendant corporation. The second venue provision—"where the defendant has committed acts of infringement and has a regular and established place of business"—is likely to become the central focus of any dispute over venue going forward. Because plaintiffs—who needed to sue where the defendant was subject to personal jurisdiction anyway—had relied on the first provision of Section 1400(b) instead, courts had little occasion to consider the meaning of this provision during the VE Holding era.
Before VE Holding, however, courts held that "regular and established place of business" means more than merely "’doing business’ in a district." E.g., Mastantuono v. Jacobsen Mfg. Co., 184 F. Supp. 178, 180 (S.D.N.Y. 1960). The Federal Circuit, though, held that this provision requires only a "permanent and continuous presence" in the forum, rather than "a fixed physical presence in the sense of a formal office or store." In re Cordis Corp., 769 F.2d 733, 737 (Fed. Cir. 1985). Thus, in Cordis, the court refused to disturb (on mandamus) the assertion of venue in a district where the defendant permanently employed two sales representatives to sell its products but did not have a physical office. Id. at 735–37.
A defendant will now have to show that no act of infringement occurred in the district or that it does not have a regular and established place of business in the forum. This inquiry is likely to be fact-laden and case-dependent. Plaintiffs should seek limited discovery into the defendant’s business to help determine whether such a regular and established place of business exists or whether any acts of infringement occurred in the district. Such discovery will be helpful, because Rule 12(b)(3) permits the court to consider facts outside the pleadings. E.g., Faulkenberg v. CB Tax Franchise Sys., LP, 637 F.3d 801, 809–10 (7th Cir. 2011). For example, in Cordis, the factual record related to venue included the detailed activities of two Cordis sales representatives employed in the district—including that they received salaries, commissions, and expense reimbursements, that they claimed tax deductions for their home offices, that they "act[ed] as technical consultants" in the operating room when Cordis pacemakers were implanted, and that they employed a secretarial service that held itself out to the public as if it were Cordis, among a number of other details. 769 F.2d at 735.
When attacking venue, parties will have the option to move to transfer or to dismiss. "The decision of whether to dismiss or transfer is within the district court’s sound discretion." First of Mich. Corp. v. Bramlet, 141 F.3d 260, 262 (6th Cir. 1998). Under Section 1406(a), transfer is available where it is "in the interest of justice" to transfer instead of dismiss. If "no ‘justice-defeating technicalities’ exist," dismissal is the appropriate remedy. Bockman v. First Am. Mktg. Corp., 459 F. App’x 157, 162 n.11 (3d Cir. 2012) (quoting Goldlawr, Inc. v. Heiman, 369 U.S. 463, 467 (1962)). Relevant criteria include: "(i) whether or not the statute of limitations will bar the plaintiff from re-filing his complaint in another forum; (ii) whether the plaintiff filed his complain[t] in the forum to harass the defendant; and (iii) whether the plaintiff was forum shopping." Montoya v. Fin. Fed. Credit, Inc., 872 F. Supp. 2d 1251, 1281 (D.N.M. 2012) (alteration in original). Courts may also consider whether "the claims are likely to have merit." Trujillo v. Williams, 465 F.3d 1210, 1223 n.16 (10th Cir. 2006). A party seeking dismissal should emphasize these factors. But, in the end, transfer is the usual course. See 15 Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice & Procedure § 3827 & nn.3, 32.50 (4th ed. 2017).
Defendants should file their TC Heartland motions as soon as possible. While a court may excuse a party’s failure to raise a defense due to an intervening change in controlling circuit precedent, litigants should act swiftly once the Supreme Court makes a defense available. An argument that a party did not waive an objection is viable "especially when [a litigant] does raise the objection as soon as [its] cognizability is made apparent." Holzsager, 646 F.2d at 796 (emphasis added); see also In re Vivendi Sec. Litig., 838 F.3d 223, 224 (2d Cir. 2016) ("[T]he intervening authority must have established an argument that was ‘not known to be available’ to the party seeking to excuse waiver at the first opportunity that the party had to raise the argument."); cf. Glater v. Eli Lilly & Co., 712 F.2d 735, 739 (1st Cir. 1983) (applying the same rule with regard to a change in factual predicates and finding the fact that defendant "moved quickly to confirm its suspicions . . . and then raised the defense reinforces our conclusion that it did not waive the defense earlier"). As one example, the Second Circuit recently considered a defendant’s filing a motion asserting a defense within "less than a month" of a change in binding authority relevant to determining whether it had waived this new defense. See Vivendi, 838 F.3d at 264–65.
Even if a defendant moves quickly, however, it may face delays in obtaining a ruling. District courts resistant to TC Heartland may exercise a so-called "pocket veto" by proceeding with substantive phases of litigation while refusing to decide a motion to transfer or dismiss due to improper venue. In addition, even if the motion is granted, it could, in some circumstances, take significant time for the transferor court to actually transfer and the transferee court to schedule the transferred case. A careful evaluation of the district’s timing for addressing motions and procedurally transferring may reveal strategic reasons to seek transfer over dismissal. For example, a party might be more interested in seeking a transfer if the attendant delays give sufficient time for a pending inter partes review proceeding to complete.
It is not yet clear how the district courts will treat the upcoming flood of motions challenging venue. District courts with pending cases may resist attempts to re-raise or re-litigate venue. In these circumstances, parties must look ahead to the appellate end-game, because mandamus review by the Federal Circuit may be needed to compel action by the district court. As a result, counsel should put together not only a persuasive motion challenging venue, but also a motion that is fully positioned to tee up the dispute as a legal, not factual, issue to preserve a de novo standard of review on appeal. To accomplish this, good appellate counsel should be retained to present a fair representation of the facts, while perhaps strategically making those factual concessions necessary to avoid a factual fight.
It is important to develop in the district court a clear legal case that TC Heartland has made viable a previously unavailable venue challenge. The district court’s finding of waiver is reviewed for abuse of discretion. See United States v. Ziegler Bolt & Parts Co., 111 F.3d 878, 883 (Fed. Cir. 1997) (waiver of personal jurisdiction reviewed under the abuse of discretion standard). Presenting the issue as one of law will be important to obtain de novo review in case of an unfavorable ruling from a hostile district court.
If the district court denies the motion to transfer, a defendant should consider seeking mandamus relief before the Federal Circuit. This is, indeed, the procedural course TC Heartland followed. See In re TC Heartland LLC, 821 F.3d 1338, 1340–41 (Fed. Cir. 2016). That case is now back before the Federal Circuit, which will likely decide in the coming months whether venue in that case is in fact improper and, if so, whether it is correctable on mandamus. A defendant should also present its motion to transfer under Section 1404(a) as well as under Section 1406 because mandamus is also available to correct egregious denials of transfer under Section 1404. See In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008).
Appellate counsel with experience filing such mandamus petitions can help place the district court motion in the best posture to present the issue at the Federal Circuit.
There was considerable disagreement and uncertainty among the circuits prior to VE Holding about the meaning of "regular and established place of business." The Federal Circuit held in Cordis that only a "permanent and continuous presence" such as two salesmen in the forum is required for proper venue and rejected the argument that there must also be "a fixed physical presence in the sense of a formal office or store." Cordis Corp., 769 F.2d at 737. But contrary to the Federal Circuit in Cordis, a number of courts held that that a physical sales location or office is required to show a "place of business." See, e.g., Univ. of Ill. Found. v. Channel Master Corp., 382 F.2d 514, 516 (7th Cir. 1967); Warner-Lambert Co. v. C.B. Fleet Co., 583 F. Supp. 519, 522–24 (D.N.J. 1984). This circuit split has been acknowledged in a number of cases. See Johnston v. IVAC Corp., 681 F. Supp. 959, 962–64 (D. Mass. 1987) (noting circuit split and collecting cases); OMI Int’l Corp. v. MacDermid, Inc., 648 F. Supp. 1012, 1015–16 (M.D.N.C. 1986); see also Dual Mfg. & Eng’g, Inc. v. Burris Indus., Inc., 531 F.2d 1382, 1386–88 (7th Cir. 1976).
Exactly how much influence these decades-old decisions will have today remains to be seen, and it is possible that the Federal Circuit’s interpretation of a "regular and established place of business" in Cordis could similarly be overturned or modified by the Supreme Court in light of its precedent. To illustrate, in contrast to Cordis, the Supreme Court previously held pursuant to an older venue statute for patent infringement that a company with a sales representative who solicited orders, forwarded them to the company for execution, received a small salary, commission, and travel expenses, and who received from the company partial rent for his headquarters and stenographer’s wages did not have a "regular and established place of business." W. S. Tyler Co. v. Ludlow-Saylor Wire Co., 236 U.S. 723, 725 (1915). In the context of diversity jurisdiction, the Supreme Court also recently defined a similar term—"principal place of business"—narrowly, as limited the "nerve center" of the corporation. E.g., Hertz Corp. v. Friend, 559 U.S. 77, 92–93 (2010) ("'[P]rincipal place of business’ is best read as referring to the place where a corporation’s officers direct, control, and coordinate the corporation’s activities"—"the place where the corporation maintains its headquarters—provided that the headquarters is the actual center of direction, control, and coordination, i.e., the ‘nerve center’").
In addition, Gibson Dunn has argued and won a number of recent landmark Supreme Court decisions on the due process limits of personal jurisdiction over corporations that are likely to limit the forums where defendant corporations can be sued for patent infringement under Section 1400(b). In Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the Supreme Court held that, when a plaintiff pleads a cause of action that does not arise in the forum state, the Due Process Clause of the Fourteenth Amendment prohibits a state court from exercising personal jurisdiction unless the defendant is "at home" in the state (where the corporation is incorporated or has its principal place of business). Id. at 760; see also Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). In BNSF Railway Co. v. Tyrrell, No. 16-405 (May 30, 2017), the Supreme Court extended that reasoning to hold that even very substantial business operations in the forum do not make the defendant "at home" there if the forum is not the corporation’s place of incorporation or principal place of business. Slip op. at 11. The Court also held more generally that the due process constraint in Daimler "does not vary with the type of claim asserted or business enterprise sued." Id. In that case, the Supreme Court held that the due process constraints in Daimler still limited the exercise of personal jurisdiction, even though the Federal Employers’ Liability Act statute, 45 U.S.C. § 56, broadly authorized venue in any district "in which the defendant shall be doing business at the time of commencing such action." BNSF Railway, slip op. at 5. The same due process limits of personal jurisdiction over corporations are likely to apply and be tested as courts grapple with the scope of proper venue for patent infringement actions under Section 1400(b).
Given the split among the circuits and related contrary Supreme Court precedent, strong appellate counsel with expertise in the intricacies of personal jurisdiction and venue can help craft a strategy from motion through certiorari that not only presents a persuasive motion to transfer or dismiss, but also argues for the most favorable interpretation of a "regular and established place of business" that is consistent with precedent and maximizes the chances of Supreme Court review and reversal.
For plaintiffs, who generally will want to keep their lawsuits in the forum of their choice and avoid the delays attendant to transfer, it will be important to immediately begin preparing a strategy to defeat a potential venue challenge. Plaintiffs can start developing facts showing that the defendant committed acts of infringement and maintains a regular and established place of business in the district, including using targeted discovery. Plaintiffs can also argue waiver. As noted above, it is not clear whether any given court will excuse a defendant’s failure to raise a venue challenge in its first motion to dismiss or answer. If a plaintiff can show that the defendant knew about the pending TC Heartland decision, yet neglected to challenge venue, this may garner sympathy from a court committed to enforcing waiver under Rule 12(h).
A panel of the Federal Circuit recently, over the dissent of Judge Newman, denied a petition for mandamus seeking transfer when the defendants "waived their venue challenge" and attempted to re-raise it "[a]pproximately two weeks before the start of trial." In re Sea Ray Boats, Inc., No. 2017-124 (Fed. Cir. June 9, 2017) (non-precedential), slip op. at 2. Sea Ray Boats suggests that at least certain judges on the Federal Circuit may be weary of granting mandamus to order a transfer that would disrupt trial.
In addition to addressing existing cases, companies should also look toward the future. Companies that are frequently sued for patent infringement should review their activities in patent venues popular to plaintiffs to determine whether it is worthwhile to change any of their activities to avoid a finding that they maintain a "regular and established place of business" in that district. Given the limited number of plaintiff-friendly districts, some companies may find it relatively painless to modify their business activities in these districts. This is especially so where companies’ activities in a district already are limited, as they may be in relatively economically peripheral districts like the Eastern District of Texas.
The District of Delaware is also a forum popular with plaintiffs and also one where many companies are incorporated and thus can find themselves subject to suit under TC Heartland. Indeed, a recent study suggests that many plaintiffs will choose to file their cases in Delaware after the decision. See Colleen Chien & Michael Risch, Recalibrating Patent Venue 35 (Santa Clara Univ. Legal Studies Research Paper No. 10-1, 2016), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2834130. Nonetheless, even Delaware corporations may still be able to employ creative strategies to avoid litigating in Delaware, including by filing early declaratory judgment actions in preferable forums. While these strategies will be subject to new challenges, such as litigation over exceptions to the first-to-file rule, experienced patent appellate counsel can help navigate such issues.
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While the full impact of the Supreme Court’s decision in TC Heartland remains to be seen as parties litigate over what it means to have a regular and established place of business, parties in previously proper, but now improper, venues should move quickly to transfer or dismiss. The window is open. It may not remain open for long.
 Gibson Dunn wrote an amicus brief in TC Heartland, on behalf of the Software & Information Industry Association (the "SIIA"), advocating the view the Court ultimately adopted: that "resides" in the special patent venue statute means a domestic corporation’s state of incorporation only. Gibson Dunn also had previously written an amicus brief on behalf of Dell Inc. and the SIIA, asking the Court to grant certiorari and review the issue.
 Declaratory judgment actions, however, are governed by the general venue statute. See VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1583 (Fed. Cir. 1990).
 There are several other considerations that could alter the analysis below, such as where a party has proceeded materially into a litigation or engaged in settlement negotiations.
 Plaintiffs may favor Delaware less after TC Heartland, however. The influx of new cases, combined with the vacancy of two of the court’s four full-time judgeships, may impair the district’s ability to issue quick decisions. That court recently announced it will use visiting judges to plug the gap. See Tom McParland, Stark Enlists Visiting Judges Ahead of Expected ‘TC Heartland’-Caused Wave, Del. Law Weekly, May 26, 2017. This measure is unlikely to permanently alleviate the overcrowded docket, however, and plaintiffs may be more wary of suing in Delaware if judge assignments are less predictable.
The following Gibson Dunn lawyers assisted in the preparation of this alert: Mark Perry, Blaine Evanson, Jason Lo, Blair Silver, Alex Harris, and Matthew O’Sullivan.
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