What is “A Regular and Established Place of Business”?: A Case Compendium
Since the TC Heartland decision in which the Supreme Court ruled that the “residence” prong in the patent venue statute, 28 U.S.C. § 1400(b), refers only to the state of incorporation and not the definition conferred in the general venue statute, § 1391, parties and courts have focused attention on interpreting the alternative basis for venue under the statute: “where the defendant has committed acts of infringement and has a regular and established place of business.” TC Heartland v. Kraft Foods Group Brands, 137 S. Ct. 1514, 1516 (2017). Of particular interest is how courts have ruled on what constitutes “a regular and established place of business.”
In September 2017, the Federal Circuit clarified that a “regular and established place of business” must meet three general requirements: “(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.” In re Cray, 871 F.3d 1355, 1360 (Fed. Cir. 2017). First, there must be a “physical place,” i.e., a “physical, geographical location in the district from which the business of the defendant is carried out.” Id. at 1362. The Court defined a physical place as a “building or part of a building set apart for any purpose.” Id. Second, the place must be “regular” and “established.” Id. The Court explained that sporadic or transient business activity within the district does not satisfy this requirement. Id. at 1362-1363. Third, the regular and established place of business “must be a place of the defendant, not solely a place of the defendant’s employee.” Id. at 1363. In other words, the defendant “must establish or ratify the place of business” to meet this third requirement. Id. For example, “whether the defendant owns or leases the place” or “conditioned employment on an employee’s continued residence in the district or the storing of materials at the place in the district” would be relevant to this third requirement. Id. compendium.
Since In re Cray, there have been numerous cases where courts have applied the requirements outlined by the Federal Circuit. See here for a collection of those cases showing the basis offered for venue in the particular district and whether venue was deemed appropriate or not.
Gibbons will continue to monitor cases addressing the venue statute for further developments.