The Power of One on Patent Case

The Power of One on Patent Case

It’s been a busy spring and summer for patent news. In May, we posted about the Supreme Court’s ruling that patent infringement cases must be filed where the defendant is incorporated. And in June, we posted when SCOTUS agreed to review a lower court’s ruling that upheld the U.S. Patent and Trademark Office’s process. Now, there’s more patent news to share: the possibility that a single salesman could determine venue in a patent case in, where else, the Eastern District of Texas. Shall we?

Ars Technica’s latest thorough report is on the well-known “patent hotspot” and whether it will be able to keep a patent case because one salesman who conducts business for a company out of his home in the Eastern District.

The background: The company Raytheon filed a patent lawsuit in East Texas in 2015 alleging that Cray Inc., a supercomputer manufacturer based in Seattle, had infringed on four Raytheon patents. Cray then filed a motion to dismiss based on the venue, which it felt was inappropriate. But in April, the also well-known hot-spot judge, US District Judge Rodney Gilstrap, denied the request because Cray sold a supercomputer to a company in Austin, outside the Eastern District.

In May things were looking up for Cray given the Supreme Court’s venue ruling. It was fleeting, however. Judge Gilstrap found that Cray would stay in district because the company had one salesperson that worked out of his home in the same district, i.e., a “regular and established” business.

In response, Cray has filed a petition with the U.S. Court of Appeals for the Federal Circuit to force Judge Gilstrap to transfer the case. If Cray is unsuccessful, then it’s full steam ahead to trial — three to be exact— with jury selection beginning on August 31.

As expected, and as Ars points out, either decision will affect the tech sector. If the petition is successful and the case is transferred out of the Eastern District, then the TC Heartland decision will prevent non-practicing entities from flocking to their preferred venue. If it’s not successful, then the decision’s impact will have been weakened, by a “single salesman” no less.

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