New Senate Bill Targeting Venue Reform

On March 17, Sens. Jeff Flake (R-AZ), Cory Gardner (R-CO) and Mike Lee (R-UT) introduced a Senate bill (S. 2377, titled “The Venue Equity and Non-Uniformity Elimination Act of 2016,” or the “VENUE Act”) designed to alter the way venue is selected in patent cases. If passed, the VENUE Act would limit the forums where plaintiffs could file patent lawsuits against defendants.

This legislation would abrogate the Federal Circuit’s decision in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990). In VE Holding, the Federal Circuit expanded the range of permissible options for venue over patent cases by interpreting the general statute under 28 U.S.C. § 1391(c), not the special statute under 28 U.S.C. § 1400(b), as the governing statute “[f]or all venue purposes,” including venue in patent cases. The practical effect of VE Holding is that companies offering products or services nationwide are subject to lawsuits in any judicial districts where such products or services are available.

The VENUE Act would amend Section 1400(b) to clarify that Section 1391(c) does not govern venue in patent cases and that Section 1400(b) does. In addition to amending Section 1400(b), the VENUE Act includes provisions that would restrict venue to districts where a defendant resides, where research or development occurred, where manufacturing of the infringing product took place or districts where a defendant has given consent to be sued.

The VENUE Act comes at a time when both the PATENT Act (S. 1137) and the Innovation Act (H.R. 9) are stalled on both sides of Capitol Hill. With the election year well under way, many members of Congress have turned their attention to presidential primaries and congressional campaigns. The venue reform bill appears to be a last-ditch effort by a few senators to achieve some level of patent reform before the 114th Congress concludes in December.

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