Well it looks like the East Texas District Court that was seeing 25% of the countries patent litigation may be seeing a big drop off in business with this court decision.
The U.S. Supreme Court on Monday tightened rules for where patent lawsuits can be filed in a decision that may make it harder for so-called patent “trolls” to launch sometimes dodgy patent cases in friendly courts, a major irritant for high-tech giants like Apple and Alphabet‘s Google.
The justices sided 8-0 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.
This may achieve much needed reform of our patent system without changing any law, just procedure. One of the big problems with the system was the ability of litigants to pick their venues for judges friendly to their position. This made the Eastern District of Texas the number one court in terms of patent lawsuit volume.
The Eastern District of Texas is still number one for patent cases. Last year, there were just over 6,000 patent suits filed in federal courts around the country. One in four of those cases (24.54% to be exact) were filed in the Eastern District of Texas. But why do patent plaintiffs, especially trolls, see it as such a favorable forum? Partly, the district’s relatively rapid litigation timetable can put pressure on defendants to settle. But other local practices in the Eastern District also favor patentees. And, in our view, they do so in a way that is inconsistent with the governing Federal Rules, and work to mask the consistent refusal by the courts in the Eastern District to end meritless cases before trial.
This decision ends the ability of litigation based companies to continuously operate in a friendly court, and with judges they know well. It should go a long way towards balancing out the patent system.