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Patent Glory Days Limited for East Texas

East Texas has a long-standing reputation as a “patent hotspot.” Judges in the Eastern District of Texas are familiar with patents as they have ruled over numerous cases. Likewise, many potential jurors also have some type of experience with patents. In 1999, the amount of patent cases in East Texas was less than 100, but by 2007, this number skyrocketed to 369. By 2011, East Texas was recognized as a favorable patent location.

Patent holders favor the Eastern District of Texas because of the benefits and advantages that it offers for plaintiffs. To begin with, the discovery process happens fairly quickly and the judges in the district are less susceptible than judges in other districts to summary judgment motions. In addition, there are methods which permit the first parts of a suit to advance predictably without a lot of court involvement.

A high-profile case is putting East Texas at risk of losing its long-established dominance. This Monday, the Supreme Court will hear oral arguments in a case regarding where patent suits can be filed, specifically Section 1400(b) of the U.S. Code. This statute states that patent suits can 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.”

Kraft Foods Group Brands brought suit against TC Heartland LLC in the District of Delaware, alleging infringement of its concentrated liquid dispenser patents. After TC Heartland unsuccessfully moved the case to the Southern District of Indiana, it filed a petition for a writ of certiorari with the Supreme Court. TC Heartland asserts that this statute is allowing patent holders to forum-shop, leading to inequitable results. TC Heartland contends that patent suits should only be allowed be to be filed where a company is incorporated, citing Fourco Glass Co. v. Transmirra Products Corp.

However, if this were to happen, a large number of patent plaintiffs would be forced out of Texas and into Delaware, where numerous companies are incorporated. While a number of people think that limiting where patent suits can be filed would create impediments for nonpracticing entities and reduce the number of lawsuits, others believe that it would have little impact.

For more information, see Law360.



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