In re. Cray Inc., Case No. 2017-129 (Fed. Cir. September 21, 2017):

In In re. Cray, the Federal Circuit on a Petition for Writ of Mandamus from the E.D. Tex., held that “the district court misinterpreted the scope and effect of our precedent” on the venue provisions of 28 U.S.C. 1400(b) and thus the failure to transfer the case pursuant to 28 US.C. 1406(a) was an abuse of discretion.  In this decision, following the Supreme Court’s recent TC Heartland decision on patent venue, the Federal Circuit issued its guidance on the proper interpretation of the statutory requirement in 28 U.S.C. 1400(b) of a “regular and established place of business.”  The Court explained that in view of its legislative history behind the patent venue statue, as well as related Supreme Court precedent, section 1400(b) was to be interpreted restrictively.  In this spirit, the Court held that the statutory requirement of a “regular and established place of business” requires: (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.

Applying this framework, the Court found that venue was improper against the defendant, which did not have a physical presence in the E.D. Tex, apart from an employee’s personal home. 

This opinion offers important guidance for determining proper venue in patent cases, and it will be important for litigants to study this decision as well as future applications of this decision by district courts future applications to better understand the newly developing contours of what constitutes proper venue in patent cases.