Intellectual Property Section

This section provides a resource for lawyers who practice in intellectual property or have an interest in building an intellectual property practice. The practice areas of trademark, copyright, trade secret and patent law fall within this section.

Chair
Bahou Law PLLC
424 Church Street, Suite 2000
Nashville, TN 37219
Twitter: @ajbahou
LinkedIn: ajbahou/
(615)712-6580
Immediate Past Chair
Merchant & Gould, P.C.
9717 Cogdill Road, Suite 101
Knoxville, TN 37932
(865)380-5977
Vice-Chair
Butler Snow LLP
P.O. Box 171443
Memphis, TN 38187
(901)680-7333

Rock Band The Turtles Loses Royalty Case

The Florida Supreme Court ruled yesterday that Florida law doesn’t protect performers seeking compensation for recordings made before 1972, the ABA Journal reports. The ruling came in the case of members of the band The Turtles, who sued SiriusXM radio over royalties. Flo & Eddie Inc., which controls the music rights for the band, lost a similar lawsuit in New York as well.
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Changes in the Propriety of “Venue” in a Patent Infringement Suit

Recently, the United States Supreme Court issued a decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 16-341, US S. Ct. This decision heralds a major change in the propriety of “venue” in a patent infringement suit brought against a US company in a US district court for infringement of a US patent.
 
The patent venue statute reads as follows:
 
 28 U.S.C. § 1400. Patents and copyrights, mask works, and designs
(a) Civil actions, suits, or proceedings arising under any Act of Congress relating to copyrights or exclusive rights in mask works or designs may be instituted in the district in which the defendant or his agent resides or may be found.
(b) Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.
 
The Supreme Court held in TC Heartland that for purposes of §1400(b) (venue in patent infringement actions), a domestic corporation will now be deemed to “reside” ONLY in its state of incorporation. This, in effect, overturns the prevailing interpretation of §§ 1391 & 1400(b), read together, that venue would be proper in any judicial district in which a defendant accused of patent infringement is also subject to personal jurisdiction. The Supreme Court has now determined this interpretation of §§ 1391 and 1400(b) contravenes its decision some 60 years ago in In Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222, 226 (1957) that, for purposes of §1400(b), a domestic corporation “resides” only in its State of incorporation.   
 
In light of TC Heartland, a domestic corporation may now only properly be sued for patent infringement in a judicial district (i) in its state of incorporation or (ii) where the domestic corporation has both (a) committed acts of infringement and (b) has a regular and established place of business. The bottom line is that, in the wake of TC Heartland, many of the new patent infringement suits are likely to be brought in states like Delaware, Nevada, and other states where companies have historically favored chartering their business or, of course, in states where such companies have regular and established places of business and have allegedly committed acts of infringement. On the other hand, states like New York, New Jersey, Illinois, California, and Texas are likely to see a significant drop in the filing of new patent infringement actions.
 
Many new questions are likely to be raised by TC Heartland, which undoubtedly represents a major change in how future patent infringement suits will be brought, including, for example, the impact of TC Heartland on pending or recently filed cases, its applicability to patent declaratory judgment actions, and the like. It is also not known whether Congress will be pressured to act to, in effect, overrule TC Heartland by appropriate legislative amendment to the general and/or patent venue statutes. One approach some are taking as a result of TC Heartland is to sue customers who sell or resell products alleged to infringe patents and/or products made by processes/methods alleged to infringe US patents. This is likely to spark considerably more adjudication over the little-known, but potentially very powerful, “customer suit” exception. The customer suit exception allows a “supplier” or manufacturer entity (the so-called “real party in interest”) to commence a DJ action in the supplier/manufacturer's home state of incorporation or any other state where the suit could properly have been brought, and then intervene and have the case brought against its customer moved to the court where the DJ action is pending, assuming the plaintiff is subject to the jurisdiction of the court in which the DJ action has been filed.
 
Mark Graham, The Graham Law Firm PLLC
 
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