Texas Judge Recognizes Four-Factor Test for for Determining Regular and Established Place of Business

In the wake of TC Heartland and the tightening venue restrictions placed on patent suits, U.S. District Judge Rodney Gilstrap of the Eastern District of Texas created a four-factor test for venue stating that the lack of a physical place of business will not be dispositive despite Heartland requiring a “regular and established place of business.”

Judge Gilstrap’s test focuses on finding substitutes for the presence of a physical place of business in an effort both to keep pace with how modern businesses typically operate, and likely, to maintain the Eastern District of Texas’s status in patent litigation.

The court will look at: (1) whether the business maintains any physical presence such as a “store, warehouse, property, inventory, infrastructure, or people” in the district; (2) the extent the business represents it maintains a presence in the district; (3) the extent the business derives benefit, such as sales revenue, from the district; and (4) the extent the business interacts with “potential customers, consumers, users, or entities within a district” such as through “customer support, ongoing contractual relationships, or targeted marketing efforts.”

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Source: DocketReport