FL
Foley & Lardner
More
Foley & Lardner LLP looks beyond the law to focus on the constantly evolving demands facing our clients and their industries. With over 1,100 lawyers in 24 offices across the United States, Mexico, Europe and Asia, Foley approaches client service by first understanding our clients’ priorities, objectives and challenges. We work hard to understand our clients’ issues and forge long-term relationships with them to help achieve successful outcomes and solve their legal issues through practical business advice and cutting-edge legal insight. Our clients view us as trusted business advisors because we understand that great legal service is only valuable if it is relevant, practical and beneficial to their businesses.
With redomestication being a topic of discussion for some companies, Texas has become a destination highly considered for reincorporation due to the new Texas Business Court and legislative reforms like SB 29, SB 1057, and SB 2337.
United States
Intellectual Property
To print this article, all you need is to be registered or login on Mondaq.com.
Article Insights
Foley & Lardner are most popular:
within Coronavirus (COVID-19), Cannabis & Hemp and Insolvency/Bankruptcy/Re-Structuring topic(s)
With redomestication being a topic of discussion for some
companies, Texas has become a destination highly considered for
reincorporation due to the new Texas Business Court and legislative
reforms like SB 29, SB 1057, and
SB 2337. However, for companies deciding to move
their corporate charter to Texas, the choice of where to place
operations within Texas has significant implications for federal
patent litigation.
The Legal Framework: TC Heartland and In re
BigCommerce
Under 28 U.S.C. § 1400(b), a patent infringement action can
only be brought where a defendant “resides” or where it
has a “regular and established place of business” and has
committed acts of infringement.
As we know from TC Heartland LLC v. Kraft Foods
Group Brands (2017) a corporation “resides”
in its state of incorporation. The Federal Circuit’s decision
in In re BigCommerce (2018) clarified
that for states with multiple federal districts, like Texas, a
corporation does not reside in every district. Instead, it resides
only in the single judicial district containing
its:
Principal place of business (PPB);
or
Registered office (if there is no
PPB in the state).
Strategic Patent-Related Considerations for
Redomestication
Companies must include patent venue planning into their broader
Texas entry strategy.
A. Identify Your “Nerve Center”
– If your company already has a primary headquarters or major
operations center in Texas, that “nerve center” likely
dictates your residence for patent venue. In this scenario, your
flexibility to “choose” a district is limited; the
district encompassing that facility becomes your default venue for
patent suits. Of course, this would already be the case even if you
do not reincorporate in Texas.
B. Strategic Selection of Registered Agent
– If you are reincorporating in Texas but maintain your core
operations elsewhere, the location of your registered agent takes
on heightened importance. The district where that agent is
located—whether the Northern (Dallas),
Southern (Houston), Western
(Austin), or Eastern (Sherman/Marshall)
districts—can determine where you “reside” for
patent purposes. Do not default to a location without evaluating
the specific judicial characteristics of that district,
including:
Judicial Expertise:
Judge-specific patent experience and local rules.
Caseload Trends:
Historical patent volumes and time-to-trial.
Defense
Favorability: Perceived leanings of the bench and
potential jury pools.
C. Holistic Planning – The Eastern
District of Texas—a traditionally popular venue for patent
plaintiffs—will not automatically be available for suits
against you simply because you are a “Texas corporation”.
If you have significant IP that may need to be enforced, a presence
in the Eastern District may be preferrable. To maintain this
protection, ensure your corporate footprint and registered agent
location align with your litigation risk profile, tax objectives,
and talent needs.
Key Takeaways
Texas incorporation does not open
every Texas district to patent venue. You generally reside in only
one.
If you have no Texas PPB, your
registered agent’s address is your “residence” for
venue purposes.
Coordinate early. Ensure your
governance and corporate teams consult with IP counsel to align
your Texas “residence” with your overall legal
strategy.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.