30 Jun 2017 Has the Gravy Train in Texas Ended? Significant Changes Coming to Patent Lawsuits
In a unanimous ruling, the United States Supreme Court made important changes to where patent suits will be filed in the future. The case, TC Heartland LLC v. Kraft Foods Group Brands LLC, was a patent dispute concerning water flavor packets. Kraft brought the suit in Delaware, where it is incorporated, but TC Heartland wanted to litigate in Indiana, where it is headquartered and incorporated.
This case made it to the Supreme Court because of a 25-year-old precedent which allowed for an exceedingly liberal choice of venue. In the past, patent cases could be brought in any location where a product was sold, which often meant that a patent suit could be brought nearly anywhere. To the dismay of many groups in the country, that rule of law created a niche industry for forum shopping. Some jurisdictions in the country began seeing more cases for no reason other than the perceived strength of their jury awards.
A Little Town in Texas
Forum shopping brought more patent cases to the Eastern District of Texas than anywhere else in the country, where nearly no inventions are created and little to no manufacturing takes place. Rapid litigation pace, discovery rules which are tough on defendants, and the perception of large jury awards created a hot spot for litigation in the Eastern District of Texas that hasn’t decreased even in the face of multiple attempts at reform.
The Supreme Court ruling will certainly curb the number of patent suits brought in the Eastern District of Texas. The court’s opinion stated a much stricter standard which limited patent suits to the location where the defendant is incorporated, or where it has regular and established business. The old standard, done away with because of this ruling, basically allowed a patent case to be brought anywhere a product was sold or marketed.
Because of this new ruling, experts are predicting an uptick in patent cases filed in Delaware, already a popular place to file patent suits. This uptick is predictable because more companies (over a million) are incorporated in Delaware than any other state. In fact, Delaware already sees the second highest number of patent suits filed in the country.
Another possible outcome is an increase in the number of patent suits filed in California. California is home to the biggest and best tech companies in the world. This often makes these companies the target of patent litigation. Moving forward, patent suits are more likely to be defended where companies are based. Additionally, Silicon Valley is located in the Northern District of California, a possible venue for future patent litigation. Because of this proximity, as well as the multitude of technology businesses in Northern California, many experts believe the Northern District of California to be particularly competent in resolving high-tech litigation.
Your IP Partners
As technology becomes increasingly integral to our lives, it is important for companies to have a legal team that can advise them on what they need to do to protect their intellectual property. At the Royse Law Firm, our team of IP attorneys can help you in every stage of intellectual property law. Whether that means creating an IP strategy for your business, filing for a patent on a new invention, or going to court and defending existing rights, contact us today to get started.Disclaimer: This blog and website are public sources of general information concerning our firm and its lawyers, as well as the information presented. They are intended, but not promised or guaranteed, to be correct, complete, and up-to-date as of the date posted. This blog and website are not intended to be, and are not, sources of legal opinion or advice. The materials, information, and communications on this blog and website do not apply to any particular person, entity, or situation, and do not apply to you or to your specific situation. You will need to consult with an attorney and/or other appropriate professional about your specific situation. Thank you.