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The Supreme Court Is Cracking Down on Patent Trolls (fortune.com)
The Supreme Court on Monday limited the ability of patent holders to bring infringement lawsuits in courts that have plaintiff friendly reputations, a notable decision that could provide a boost to companies that defend against patent claims. The high court, in an opinion by Justice Clarence Thomas, ruled unanimously that a lower court has been following an incorrect legal standard for almost 30 years that made it possible for patent holders to sue companies in almost any U.S. jurisdiction. From a report: The justices sided 8-0 (PDF) with beverage flavoring company TC Heartland in its legal battle with food and beverage company Kraft Heinz, ruling that patent infringement suits can be filed only in courts located in the jurisdiction where the targeted company is incorporated. Justice Neil Gorsuch did not participate in the decision. The decision overturned a ruling last year by the U.S. Court of Appeals for the Federal Circuit, a Washington-based patent court, that said patent suits are fair game anywhere a defendant company's products are sold.
>> patent infringement suits can be filed only in courts located in the jurisdiction where the targeted company is incorporated
I see a bunch of high-fiving going on in the Delaware legal community (because that's where a lot if not most of targeted companies will be incorporated). Also a lot of high-fiving in corporate legal departments, who asked their companies to (re)incorporate in Delaware to take advantage of its corporate-friendly laws.
The decision overturned a ruling last year by the U.S. Court of Appeals for the Federal Circuit, a Washington-based patent court, that said patent suits are fair game anywhere a defendant company's products are sold.
Are they going to actually hand down a ruling that overturns prior decisions of the lower court?
I believe the answer is yes.
The whole east Texas crap has been the bane of the tech industry for decades.
I was involved in two patent cases (providing research rather than expert witness); both were in East Texas.
One was the Novell/Red Hat case on user interfaces, and the other was on the infamous OpenMarket patents.
One we won (the Novell/Red Hat), and the other lost (the Open Market patents, finally thrown out years later due to the efforts of New Egg.
I will note that the Novell/Red litigation was helped by the judge coming in from out of district (from the appeals court). So venue clearly mattered greatly. Don't under estimate it.
The Open Market patents were about as an egregious violation of the patent system as I can imagine. The first of the three (the original one) described the method OpenMarket used for its early shopping cart system based on URL hacking. It was obsolete the day cookies were invented (which have their own set of terrible privacy problems, something we weren't thinking about much in the early 1990's; sigh). So nobody infringed it; by the time of its issuance it was moot, as cookies made it much easier; whether there was prior art isn't clear to me, but probably; I just never found a smoking gun. The second and third patent, continued over a decade, ended up covering about half of computer science and should never have been issued due to prior art.
Thankfully, the CEO of NewEgg fought in a later case and eventually won, but not after many companies lost and were held up.
So venue matters, and fixing the patent system to not issue trash sweeping patents matter both.
How can the Supreme Court "crack down" on something that is a legal, precedented activity? Are they going to actually hand down a ruling that overturns prior decisions of the lower court? (And, yes, East Texas is about as low as it gets in this field.)
Er? The summary says that the lower court has been following the wrong standard for 30 years. And if you clicked on the link, SCOTUS specifically overturned 2 lower courts. I know it's to much to RTFA and the 13 page decision, but did you even look at the summary?
What does the decision mean? In the case of East Texas, lawsuits must be filed in the state and jurisdiction of the defendant, not where the plaintiff wants to sue. So it will make it harder for patent trolls to file now in East Texas where is it lawsuit friendly if their targets are not in that court's jurisdiction.
Held: As applied to domestic corporations, “reside[nce]” in 1400(b) refers only to the State of incorporation. The amendments to 1391 did not modify the meaning of 1400(b) as interpreted by Fourco.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Delaware is already a sizeable patent district -- e.g., most pharmaceutical patent cases are filed there, and they had ~10% of all cases filed last year.
Problem is they're not staffed for this kind of additional volume -- they only had three judges to start with, and then Judge Robinson took senior status this spring. With this sort of flood now looming, it's not clear who's going to want to sign up to replace her.
That'd be nice, but that's not what this case was about; the question they were asked to rule on was "is it really okay for them to sue us in Delaware even though we're incorporated in Indiana?" and they said "no, actually, not so much."
Give it time. Once there's a few contradictory rulings between districts they'll get to start in on bullshit patents (but even then, I expect the most likely approach is going to be "given what we've seen come out of PTO, the court should no longer just blindly assume that the examiner actually did their job with regard to obviousness and/or prior art", which should go a long way to leveling the field between the owner of a junk patent and the defendant).