Patent Holders Cannot Choose Plaintiff-Friendly Courts
In a decision that will change the landscape of patent litigation, the Supreme Court unanimously overruled a Federal Circuit decision in place for almost 30 years that allowed patent infringement suits to be filed almost anywhere in the country. Under thepatent statute, a patent infringement action may be brought in the district where thedefendant resides or where the defendant has committed acts of infringement and has aregular and established place of business. Justice Thomas restricted the meaning of“resides” to only the state where it is incorporated. He emphasized that had Congressintended to expand the definition of residence in the patent venue statute beyond the state of incorporation, it would have done so unambiguously.
For many years, patent holders forum shopped to find a venue that was especially friendly to plaintiffs, such as the Eastern District of Texas. More than 30% of patent cases in the last few years have been filed in this rural district even though few companies have no real contacts with it. This is especially true of so-called patent trolls, or firms that hold patents not to make products but for the purpose of asserting them in litigation.
This is a big victory for large tech companies that have been forced to deal withfrivolous patent suits in Texas. Expect to see an increase in these suits in Delaware,where many companies are incorporated, along with California, New York, New Jerseyand Massachusetts, where many have their principle place of business.
TC Heartland LLC v. Kraft Foods Group Brands LLC (S.Ct. May 22, 2017).
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