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US Top Court Considers Changing Where Patent Cases May Be Filed (reuters.com)

The U.S. Supreme Court on Monday grappled over whether to upend a quarter-century of practice and limit where patent-infringement lawsuits can be filed. From a report on Reuters: The U.S. Supreme Court struggled over whether to upend nearly 30 years of law governing patent lawsuits that critics say allows often-baseless litigants to sue in friendly courts, giving them the upper hand over high-technology companies such as Apple and Alphabet Google. The justices heard an hour of arguments in an appeal by beverage flavoring company TC Heartland LLC to have a patent infringement suit brought against it by food and beverage company Kraft Heinz moved from federal court in Delaware, where it was filed, to Heartland's home base in Indiana. TC Heartland is challenging a lower court ruling denying a transfer to Indiana. Even though the case did not involve a lawsuit filed in Texas, the arguments involved the peculiar fact that the bulk of patent litigation in the United States is occurring in a single, rural region of East Texas, far from the centers of technology and innovation in the United States. Critics have said the federal court there has rulings and procedures favoring entities that generate revenue by suing over patents instead of making products, sometimes called "patent trolls." The outcome of the TC Heartland case could be profoundly felt in the East Texas courts. The justices could curtail where patent lawsuits may be launched, limiting them to where a defendant company is incorporated and potentially making it harder to get to trial or score lucrative jury verdicts.

55 comments

  1. FINALLY!! by rkhalloran · · Score: 5, Insightful

    About time they weighed in on "venue-shopping" by trolls. Either of the defendant or plaintiff's headquarters' locations.

    1. Re:FINALLY!! by Anonymous Coward · · Score: 0

      The plaintiff will relocate to Delaware :/

    2. Re:FINALLY!! by tomhath · · Score: 1

      Expect to see a few corporate headquarters relocated to East Texas

    3. Re:FINALLY!! by Mia+Yuuki · · Score: 2

      About time they weighed in on "venue-shopping" by trolls. Either of the defendant or plaintiff's headquarters' locations.

      Even that has problems, as the patent trolls will simply all incorporate in the Eastern District of Texas and keep a one man shop open there. I think like many other such cases, it needs to be limited to the location of the Defendant or a plan in which a contract or agreement has been signed.

    4. Re:FINALLY!! by Anonymous Coward · · Score: 0

      Well obviously not the plaintiff's or they'll all move to East Texas

    5. Re:FINALLY!! by PopeRatzo · · Score: 1

      Expect to see a few corporate headquarters relocated to East Texas

      Except don't nobody want to go to East Texas.

      --
      You are welcome on my lawn.
    6. Re:FINALLY!! by whoever57 · · Score: 3, Interesting

      Expect to see a few corporate headquarters relocated to East Texas

      The patent trolls already did. Tyler, TX has buildings "occupied" by lots of companies, except that there is never anyone in the office.

      --
      The real "Libtards" are the Libertarians!
    7. Re:FINALLY!! by omnichad · · Score: 1

      Or Hawaii. Make defense expensive.

    8. Re:FINALLY!! by pr0t0 · · Score: 2

      They already do this. Some news organization did an expose on it. They went through a building that was simply corridors full of one-room offices, a company nameplate on the door, and no one ever went in or out.

      --
      I'm sorry, but your opinion seems to be wrong.
    9. Re:FINALLY!! by ninthbit · · Score: 1

      This will fail... they'll just file a subsidiary law firm in the favorable jurisdiction and then file from their new HQ. The only truly viable solution is to reform IP law, and that is an undertaking that no politician will go near.... unless its to give their backers even more control.

    10. Re:FINALLY!! by OrangeTide · · Score: 1

      So what? You only need to have an office big enough to hold 1 lawyer. Should be a nice office space boon for East Texas.

      --
      “Common sense is not so common.” — Voltaire
    11. Re:FINALLY!! by Altrag · · Score: 1

      Frankly don't know why they aren't already in East Texas.. its not like patent trolls have a lot of equipment or manpower to relocate.

      Though I imagine they probably locate wherever taxes are cheapest at the moment and perhaps East Texas doesn't have that particular benefit.

    12. Re:FINALLY!! by Anonymous Coward · · Score: 1

      You guys clearly don't understand this case. It's about where the defendant can be sued- so you're going to incorporate in Texas just in case you infringe a patent someday? I don't imagine there's a single general counsel anywhere that would think that's worth giving up Delaware corporate law.

    13. Re:FINALLY!! by Anonymous Coward · · Score: 2, Insightful

      There are already shell companies operating out of offices in East Texas. Limiting venues is a step in the right direction, but more work needs to be done. How about limits on who can profit from the litigation? That would render shell companies useless. Invalidating NDAs over patent demands? All those Microsoft threatened before Barnes & Noble would have appreciated that. Reversing settlements if the patents-in-suit are invalidated? US companies still lay off workers or go under if their arrangement with a troll outlives the patents. More clarity at the federal level for when courts need to wait for USPTO re-examination? The first Apple v. Samsung case would have been a bit different. Actually funding the USPTO for a change? Think of how many stupid patents would get rejected if they could spend more man hours looking for prior art. Sweeping acts to invalidate existing software patents? They're just waiting to be invalidated anyway, grab the bull by the horns.

    14. Re:FINALLY!! by tlhIngan · · Score: 1

      They already do this. Some news organization did an expose on it. They went through a building that was simply corridors full of one-room offices, a company nameplate on the door, and no one ever went in or out.

      And there were lots of those buildings too - all one-room offices all dark because no one was there. But the office was there to show presence. It was really quite a depressing scene - all around the courthouse are dozens of office buildings which are fully occupied, but whose population was zero as there was no one actually in there.

      You sorta wonder why they bother running air conditioning or lights.

    15. Re:FINALLY!! by OrangeTide · · Score: 2

      I'd love for some percentage for settlements to go to USPTO. That might be hard to pull off through legislation, but it could help tremendously in funding this service of a patent system through those who benefit the most from it.

      --
      “Common sense is not so common.” — Voltaire
    16. Re:FINALLY!! by Carewolf · · Score: 1

      Expect to see a few corporate headquarters relocated to East Texas

      The patent trolls already did. Tyler, TX has buildings "occupied" by lots of companies, except that there is never anyone in the office.

      Also it has more "offices" that the building has rooms, or square meters.

    17. Re:FINALLY!! by JoeMerchant · · Score: 1

      Venue shopping is one of the central tricks in the lawyers' bag of "you need me to represent you."

      That they have let venue shopping be so egregiously abused for so long is a testament to the glacial nature of supreme court justice. We can elect a whole new house of Representatives every 2 years, the entire legislative and executive branches every 6, but Judges for life are in no hurry.

    18. Re:FINALLY!! by JoeMerchant · · Score: 1

      It's more pleasant than West Texas.

    19. Re:FINALLY!! by RubberDogBone · · Score: 3, Informative

      They already do this. Some news organization did an expose on it. They went through a building that was simply corridors full of one-room offices, a company nameplate on the door, and no one ever went in or out.

      There may have been news reports but one of the best investigations was from Austin Mayer, developer of the flight sim X-Plane, who was being sued by one of these worthless companies.

      Austin went to East Texas, dug around those empty hallways, and produced a scathing report: http://www.thepatentscam.com/

      It's brilliant.

      --
      Sig for hire.
    20. Re:FINALLY!! by PopeRatzo · · Score: 1

      It's more pleasant than West Texas.

      Yes, it is. And the food is better.

      South Texas is the best, though.

      --
      You are welcome on my lawn.
    21. Re:FINALLY!! by superwiz · · Score: 1

      The summary says they are asking to limit the venue to the defendant's location.

      --
      Any guest worker system is indistinguishable from indentured servitude.
    22. Re:FINALLY!! by TWX · · Score: 1

      The point in patent-trolling is to make money without doing any real work, to support one's self in a luxury lifestyle.

      East Texas does not sound like the kind of place that patent trolls would want to live in. They use that particular federal jurisdiction only because it's convenient to their goals.

      --
      Do not look into laser with remaining eye.
    23. Re:FINALLY!! by harvey+the+nerd · · Score: 1

      Dining in Tyler is pretty limited to outright bad, especially after Jake's closed. Jake's, a fantastic place, catered to lawyers, oil money, big money, and medical feeding off the old.

      Tyler is a great place if Hitler ever returns.

    24. Re:FINALLY!! by PopeRatzo · · Score: 1

      Come down to Houston. I'll buy you some barbecue that will make you weep with joy.

      --
      You are welcome on my lawn.
    25. Re:FINALLY!! by JoeMerchant · · Score: 1

      There are so many barbecue places in Houston, some of them just make you weep - no joy included.

    26. Re:FINALLY!! by JoeMerchant · · Score: 1

      We used to spend time up around Crockett, the air was quite a bit easier to breathe than in Houston, at least in the 2004-2005 summers. Paradise it is not, but there's something to be said for clean breathable air.

    27. Re:FINALLY!! by Anonymous Coward · · Score: 0

      Won't matter. They're asking to require the court in the defendants location to be the venue. It wouldn't matter if the trolls set up shop in East Texas or not.

  2. Dedicated patent courts. by JDAustin · · Score: 2

    We have dedicated courts specifically for Bankruptcy and Immigration. We need a dedicated court for both Patent and Malpractice issues.

    1. Re:Dedicated patent courts. by gurps_npc · · Score: 2

      We effectively have that, you just dislike their methodology. The Texas court in question handles so many patent cases, that it is the defacto dedicated court.

      But they got that way by illegally intentionally favoring a specific point of view, favoring patent holders no matter how ridiculous the patent or complaint. One major factor is their strong belief in jury trials, which slows things down, and raises trial costs significantly, and increases the risk of a ridiculous over the top jury award. All of these factors encourage people to settle.

      --
      excitingthingstodo.blogspot.com
    2. Re:Dedicated patent courts. by Altrag · · Score: 1

      There's a huge difference between being the "de facto" standard due to rubberstamping in favor of the plaintiff (who usually gets to decide where they file their complains,) and being explicitly designed with the intent of treating cases fairly ie: not favoring the plaintiff by default.

    3. Re:Dedicated patent courts. by Anonymous Coward · · Score: 0

      illegally intentionally favoring a specific point of view

      How odd that the Fifth Circuit has never come down on them then.

      One major factor is their strong belief in jury trials, which slows things down

      Jury trials are available in civil cases at the request of EITHER party, so it doesn't really matter what the Texas court thinks. Are you saying that when both parties waive jury trial, the court still refuses to have it heard by a judge? Also, jury trials do not slow things down in any meaningful way- did it add 5 hours to the trial time because you had to march them in and out? Did they deliberate an entire extra day longer than you imagine a judge would have? That is frankly peanuts in comparison to how long patent cases take even in the very efficient Eastern District of Texas.

      raises trial costs significantly

      In what way? If you think the cost of a jury-rather-than-bench trial has anything but the most remote effect on total costs when compared to everything that happens before trial, you're delusional.

      You obviously forgot the traditional IANAL in your post.

    4. Re:Dedicated patent courts. by russotto · · Score: 3, Informative

      There's a huge difference between being the "de facto" standard due to rubberstamping in favor of the plaintiff (who usually gets to decide where they file their complains,) and being explicitly designed with the intent of treating cases fairly ie: not favoring the plaintiff by default.

      Unfortunately, not really. Patent appeals are by design handled exclusively by the Court of Appeals for the Federal Circuit.... which results in them favoring a very expansive version of patent law even when SCOTUS tells them to cool it.

    5. Re:Dedicated patent courts. by TemporalBeing · · Score: 1

      We have dedicated courts specifically for Bankruptcy and Immigration. We need a dedicated court for both Patent and Malpractice issues.

      We have dedicated courts for Patents, that's a good bit of the problem. Congress created it to take the load off SCOTUS (who use to be the sole arbiter of patents cases); since then NPE's have arisen and it's become a nightmare for everyone.

      --
      Truth is like the sun. You can shut it out for a time, but it ain't goin' away. - Elvis Presley (source: imdb.com)
    6. Re:Dedicated patent courts. by Altrag · · Score: 1

      I'm not entirely sure I draw the line from A to B here. Why does that result in favoring expansive patent law? Just so that they have something to do with their time? Seems like SCOTUS or whoever should be smacking them around a lot harder if they're continually making judgements based on how bored they are (or whatever you think is causing the favoritism) rather than the actual merits of each case.

  3. Patent cases should obviously be in the 9th by WillAffleckUW · · Score: 1

    It's obvious that patent cases should be heard in the 9th Circuit.

    Or at least San Antonio.

    --
    -- Tigger warning: This post may contain tiggers! --
  4. We've known ... by PPH · · Score: 1

    ... for quite some time that it wasn't a good idea to ride on a stagecoach through Texas.

    --
    Have gnu, will travel.
  5. A quarter century by phantomfive · · Score: 1

    A quarter century sounds like a lot because it uses the big word 'century' but it's only 25 years, which really isn't very long in legal terms. The supreme court frequently makes decisions on cases that are a century.

    --
    "First they came for the slanderers and i said nothing."
    1. Re:A quarter century by amiga3D · · Score: 3, Insightful

      In the tech industry it's an incredible length of time. 25 years ago Intel introduced the 80486DX2, the same year Commodore Business Machines launched the Amiga 1200 computer. I now emulate an Amiga 1200 at full speed on a Raspberry Pi 3, a 35 dollar throwaway computer board. 25 years in the tech industry sees companies rise and fall and products come out, go obsolete and their replacement go obsolete, etc....

    2. Re:A quarter century by Altrag · · Score: 2

      25 years is also more than 10% of the entire history of US law. That's not insignificant.

    3. Re:A quarter century by JoeMerchant · · Score: 3, Insightful

      25 years saw this nation move from a British Colony, through a war of independence and a provisional government, into one based on the present Constitution, move its capital from Philadelphia to a dedicated federal district, and double its population from ~2.5 million to more than 5 million.

      Doesn't matter when you live, a lot happens in 25 years, or relatively little, depending on what you focus on.

  6. So All the Cases Move to Delaware? by Anonymous Coward · · Score: 0

    If they want to make the patent cases be heard where the DEFENDANT (not the troll/plaintiff) is incorporated, that will greatly expand the number of cases heard in Delaware. Nearly every large US corporation, regardless of where their actual HQ is, is incorporated in Delaware.

  7. Misstated issues by Anonymous Coward · · Score: 0

    So, first, this isn't just "upend(ing) a quarter-century of practice," it's flat-out placing those accused of patent infringement in a far better position than any company accused of anything else. In general, venue is congruent to jurisdiction, meaning if the corporation has minimum contacts in a judicial district, they can be sued there. I'm not sure why, say, Walmart could be sued for any federal question anywhere in the United States, unless they were being sued for patent infringement at which point you could only sue them in Delaware or wherever they're incorporated.

    Second, very legitimate patent infringement lawsuits are filed in the Eastern District of Texas all the time. Just because the tech world obsesses over "patent trolls" and views intellectual property in a very negative light doesn't make that district "favor" any particular entity. If my firm were larger and we had the sort of clients that could afford significant travel bills, I swear we'd file everything there, because the court knows what it's doing. They have far more experience with patent law in that district than anywhere else in the United States. The rulings don't "favor," they are informed. The procedures don't "favor," they keep the docket moving. We filed a suit literally 6 years ago in the midwest and we're still a year from trial- the Eastern District of Texas would have gotten this case resolved years ago.

  8. It's a start by s.petry · · Score: 1

    Judge shopping is not restricted to just Patents. The courts need a complete overhaul, as the 9th Circuit Court (Lawyers call it the 9th Circus) proves.

    --

    -The wise argue that there are few absolutes, the fool argues that there are no probabilities.

    1. Re:It's a start by Anonymous Coward · · Score: 0

      Don't worry, Donald Trump has promised to rid us of "so-called" judges.

      We'll be liberated once everything is run through the offices of the CEO of TrumpCorp.

  9. Adjectives by dinfinity · · Score: 2

    "US Top Court"

    Because "supreme" just doesn't quite cut it.

    1. Re:Adjectives by Carewolf · · Score: 1

      "US Top Court"

      Because "supreme" just doesn't quite cut it.

      Supreme like Hawaii are just Pizza adjectives.

    2. Re:Adjectives by Harlequin80 · · Score: 1

      Yeah. But then you get situations such as Australia, where the High Court is above Supreme Courts.

    3. Re:Adjectives by Anonymous Coward · · Score: 0

      Yeah. But then you get situations such as Australia, where the High Court is above Supreme Courts.

      What are they smoking?

  10. Randomize the judges by apenzott · · Score: 1

    I would take all of the judges, as they finish their case loads, and completely disperse them randomly to all the federal court districts.

    The idea is a patent troll wouldn't be able to venue shop as their favorite judge may be in the heart of Silicon Valley, right alongside other judges that frown upon this revenue seeking business model.

    To the patent troll, this puts the randomness back into Russian Roulette, by having at least one chamber loaded.

    --
    The Roman Rule: The one who says it cannot be done shall not interrupt the one who is doing it.
  11. What about the time to vert and pick the jury? by Joe_Dragon · · Score: 1

    What about the time to vert and pick the jury?

  12. For 40 years by Anonymous Coward · · Score: 0

    ... nearly 30 years of law governing patent lawsuits ...

    For 40 years, judges have argued, it doesn't matter which court is used, it doesn't matter which lawyer is used; the verdict you get, is the verdict you deserve. Add to that, attorneys don't have to be honest with juries and the result is the systemic abuse that one sees in US court cases. Ruling for specialization might be a start to undoing the bias.

  13. Patent Trolls and what the law should be by Neuronwelder · · Score: 1

    A.If you claim a patent. And do not implement it. You must give up your patent. B. Patents cannot be vague or wide sweeping. They must be focused and targeted on a single item.

  14. sometimes called "patent trolls." by almostadnsguy · · Score: 1

    What else do you call them? That's what they are...

  15. About time. This is an by Anonymous Coward · · Score: 0

    opporitune moment to consider that:
    1) the patent laws are federal, and local courts are not necessarily knowlegeable...
    2) the patent office is near-complete in its coverage of patent cases, with all of the information and experts handy,
    3) and is in Washington, DC... not Wet Spring, Alaska.
    THUS: there should be a specific court, in the capital, specifically for patent claims.
    With technology, and political/judicial oversight, the problem of 'favorable judges' ( The Honorable Billy-Bob, my cousins father-in-law.... )

    This would solve the problem, or should solve the problem, or might solve the problem,

    And what about FDA cases, too ?