Thanks to Dan and everyone for making me feel welcome here at the Lounge. As Dan said in his welcome post, my primary areas of interest include intellectual property, creativity, innovation and related technology topics.
One topic that's caught my eye over the summer is the aftermath of the U.S. Supreme Court's TC Heartland v. Kraft Foods, decided in May 2017. This decision considered the construction of the words “where the defendant resides” in 28 U.S.C. § 1400(b), which governs venue in patent cases and reads in relevant part:
Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.
Prior to the Court's decision, research by Brian Love and James Yoon, more than a third of patent suits filed from 2014 to 2007 were brought in the Eastern District of Texas. Unlike Silicon Valley or other tech-heavy areas of the country where patent cases might more naturally be filed, the Eastern District of Texas was a curious place for plaintiffs to file. According to The New York Times "In recent years, a single judge based in Marshall Texas oversaw about a quarter of all patent cases nationwide, more than the number handled by all federal judges in California, Florida and New York combined." The reasons that patent owners appeared to prefer this district are myriad, including a number of procedural advantages.
This circumstance was facilitated by a construction of the patent venue statute which allowed suit to be filed where ever the defendant engaged in infringement, which was reversed by the Court's TC Heartland. In essence, TC Heartland held that a defendant "resides" only in its state of incorporation. Thus under the relevant venue statute, defendants can be sued for patent infringement where the entity is incorporated or where the defendant has committed acts of infringement and has a regular and established place of business.
According to data gathered from Lex Machina, during the three month period before TC Heartland was decided, most patent filings were filed in the Eastern District of Texas:
During the three months since, the District of Delaware has pulled ahead as a popular filing district, likely because so many corporate entities are incorporated in that state. In addition, the Northern District of California has emerged as a top-five contender, perhaps because accused infringers may be based in Silicon Valley and thus have an "established place of business there."
Still, there are a significant number of new suits that continue to be filed in the Eastern District of Texas. I'll speculate about some possible reasons for that circumstance in an upcoming post early next week.
Interesting post. Looking forward to your follow-up(s)
Posted by: Mike Hutter | September 10, 2017 at 08:26 PM
I had a case before EDTx as the TC Heartland decision was pending - it was interesting, the court came down very hard on the troll - and we had the very strong impression that EDTx was trying to show that it was 'reformed' and not ludicrously pro-plaintiff.
Posted by: [M][a][c][K] | September 11, 2017 at 05:02 AM