What began as a fight over water flavoring pouches has resulted in the highest court in the land ruling unanimously this week that patent infringement cases must be filed where the defendant is incorporated — “a decision that upends 27 years of law governing patent infringement cases.”
We previously posted a blog featuring an in-depth client alert from Gibson Dunn on the future of the patent litigation landscape being shaped by the Supreme Court’s then-impending review and decisions on two notable patent cases: TC Heartland LLC v. Kraft Food Brands Group LLC and Impression Products, Inc. v. Lexmark International, Inc.
Most notably, the justices’ decision, as a Bloomberg report states, means that “patent trolls” can no longer file their lawsuits in the patent-friendly Eastern District of Texas, where more than one-third of all infringement suits are filed. It also means that the court in Delaware, known as the second-busiest court for patent suits, could see an increase in the number of cases because many businesses are actually incorporated there.
Besides filing location, there are other implications to the Supreme Court’s decision. Again, per Bloomberg, the decision adds to other rulings over the past decade from the Supreme Court and the Federal Circuit that have limited the damages patent owners can reap reduced their power on blocking the use of their inventions and also forced these owners to be more detailed when filing suit.
Mark Whitaker, a patent lawyer with Morrison & Foerster in Washington and president of the American Intellectual Property Law Association, stated to Bloomberg that the court’s decision won’t eliminate arguments on where patent suits should be filed, but that it will “change the conversation.”
“A more nuanced approach needs to be taken. If the patent venue statute is going to mean anything, then there has to be some nexus with the patented activity.”
While the defendant, Kraft, was disappointed by the Supreme Court’s decision, it does not believe it will ultimately affect the outcome of its case. Additionally, an IPWatchdog report not only highlighted Kraft’s earlier opposition to the petition for certiorari, which it had felt was a “poor vehicle” for the high court to “wade into the patent venue dispute,” but also took issue with the court agreeing to hear the case to begin with.
“What is really going on is this case was used by those with an agenda to attempt to make a statement about what is happening in the Eastern District of Texas, in a patent owner friendly district court. That the Supreme Court would take this case and force Kraft to play an unwilling and unjustifiable role in a macabre judicial protest with heavy political overtones is unconscionable.”
The court agreeing to hear the case and its ultimate decision is welcomed, however, by some members of Congress, who also believe there is more legislative work to be done on the matter. Per Bloomberg, House Judiciary Committee Chairman Bob Goodlatte issued a statement after the decision.
“I look forward to continuing discussions with stakeholders on other aspects of abusive patent litigation and how we keep our patent laws up to date to ensure a well-functioning patent system.”
We end on this topic where we began: considering the potential fate for the Eastern District of Texas. An Ars Technica report asserts that the court’s decision “may well signal the demise” of this much-favored venue for patent trolls. Several states, including Texas, filed an amicus brief, stating that they, too, have an interest in protecting their citizens from abusive claims of patent infringement.