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.
