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US Top Court Considers Changing Where Patent Cases May Be Filed (reuters.com) 55

The U.S. Supreme Court on Monday grappled over whether to upend a quarter-century of practice and limit where patent-infringement lawsuits can be filed. From a report on Reuters: The U.S. Supreme Court struggled over whether to upend nearly 30 years of law governing patent lawsuits that critics say allows often-baseless litigants to sue in friendly courts, giving them the upper hand over high-technology companies such as Apple and Alphabet Google. The justices heard an hour of arguments in an appeal by beverage flavoring company TC Heartland LLC to have a patent infringement suit brought against it by food and beverage company Kraft Heinz moved from federal court in Delaware, where it was filed, to Heartland's home base in Indiana. TC Heartland is challenging a lower court ruling denying a transfer to Indiana. Even though the case did not involve a lawsuit filed in Texas, the arguments involved the peculiar fact that the bulk of patent litigation in the United States is occurring in a single, rural region of East Texas, far from the centers of technology and innovation in the United States. Critics have said the federal court there has rulings and procedures favoring entities that generate revenue by suing over patents instead of making products, sometimes called "patent trolls." The outcome of the TC Heartland case could be profoundly felt in the East Texas courts. The justices could curtail where patent lawsuits may be launched, limiting them to where a defendant company is incorporated and potentially making it harder to get to trial or score lucrative jury verdicts.
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US Top Court Considers Changing Where Patent Cases May Be Filed

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  • FINALLY!! (Score:5, Insightful)

    by rkhalloran ( 136467 ) on Monday March 27, 2017 @02:26PM (#54120879) Homepage
    About time they weighed in on "venue-shopping" by trolls. Either of the defendant or plaintiff's headquarters' locations.
    • by tomhath ( 637240 )
      Expect to see a few corporate headquarters relocated to East Texas
      • Expect to see a few corporate headquarters relocated to East Texas

        Except don't nobody want to go to East Texas.

        • So what? You only need to have an office big enough to hold 1 lawyer. Should be a nice office space boon for East Texas.

          • Re: (Score:2, Insightful)

            by Anonymous Coward

            There are already shell companies operating out of offices in East Texas. Limiting venues is a step in the right direction, but more work needs to be done. How about limits on who can profit from the litigation? That would render shell companies useless. Invalidating NDAs over patent demands? All those Microsoft threatened before Barnes & Noble would have appreciated that. Reversing settlements if the patents-in-suit are invalidated? US companies still lay off workers or go under if their arrangement wi

            • I'd love for some percentage for settlements to go to USPTO. That might be hard to pull off through legislation, but it could help tremendously in funding this service of a patent system through those who benefit the most from it.

        • It's more pleasant than West Texas.

          • It's more pleasant than West Texas.

            Yes, it is. And the food is better.

            South Texas is the best, though.

            • Dining in Tyler is pretty limited to outright bad, especially after Jake's closed. Jake's, a fantastic place, catered to lawyers, oil money, big money, and medical feeding off the old.

              Tyler is a great place if Hitler ever returns.
              • Come down to Houston. I'll buy you some barbecue that will make you weep with joy.

              • We used to spend time up around Crockett, the air was quite a bit easier to breathe than in Houston, at least in the 2004-2005 summers. Paradise it is not, but there's something to be said for clean breathable air.

      • Re:FINALLY!! (Score:4, Interesting)

        by whoever57 ( 658626 ) on Monday March 27, 2017 @02:44PM (#54121025) Journal

        Expect to see a few corporate headquarters relocated to East Texas

        The patent trolls already did. Tyler, TX has buildings "occupied" by lots of companies, except that there is never anyone in the office.

        • Expect to see a few corporate headquarters relocated to East Texas

          The patent trolls already did. Tyler, TX has buildings "occupied" by lots of companies, except that there is never anyone in the office.

          Also it has more "offices" that the building has rooms, or square meters.

      • Or Hawaii. Make defense expensive.

      • by pr0t0 ( 216378 )

        They already do this. Some news organization did an expose on it. They went through a building that was simply corridors full of one-room offices, a company nameplate on the door, and no one ever went in or out.

        • by tlhIngan ( 30335 )

          They already do this. Some news organization did an expose on it. They went through a building that was simply corridors full of one-room offices, a company nameplate on the door, and no one ever went in or out.

          And there were lots of those buildings too - all one-room offices all dark because no one was there. But the office was there to show presence. It was really quite a depressing scene - all around the courthouse are dozens of office buildings which are fully occupied, but whose population was zero as

        • Re:FINALLY!! (Score:4, Informative)

          by RubberDogBone ( 851604 ) on Monday March 27, 2017 @04:59PM (#54122095)

          They already do this. Some news organization did an expose on it. They went through a building that was simply corridors full of one-room offices, a company nameplate on the door, and no one ever went in or out.

          There may have been news reports but one of the best investigations was from Austin Mayer, developer of the flight sim X-Plane, who was being sued by one of these worthless companies.

          Austin went to East Texas, dug around those empty hallways, and produced a scathing report: http://www.thepatentscam.com/ [thepatentscam.com]

          It's brilliant.

      • by Altrag ( 195300 )

        Frankly don't know why they aren't already in East Texas.. its not like patent trolls have a lot of equipment or manpower to relocate.

        Though I imagine they probably locate wherever taxes are cheapest at the moment and perhaps East Texas doesn't have that particular benefit.

        • by TWX ( 665546 )

          The point in patent-trolling is to make money without doing any real work, to support one's self in a luxury lifestyle.

          East Texas does not sound like the kind of place that patent trolls would want to live in. They use that particular federal jurisdiction only because it's convenient to their goals.

    • About time they weighed in on "venue-shopping" by trolls. Either of the defendant or plaintiff's headquarters' locations.

      Even that has problems, as the patent trolls will simply all incorporate in the Eastern District of Texas and keep a one man shop open there. I think like many other such cases, it needs to be limited to the location of the Defendant or a plan in which a contract or agreement has been signed.

    • This will fail... they'll just file a subsidiary law firm in the favorable jurisdiction and then file from their new HQ. The only truly viable solution is to reform IP law, and that is an undertaking that no politician will go near.... unless its to give their backers even more control.

    • Judge shopping is not restricted to just Patents. The courts need a complete overhaul, as the 9th Circuit Court (Lawyers call it the 9th Circus) proves.

    • by Anonymous Coward

      You guys clearly don't understand this case. It's about where the defendant can be sued- so you're going to incorporate in Texas just in case you infringe a patent someday? I don't imagine there's a single general counsel anywhere that would think that's worth giving up Delaware corporate law.

    • Venue shopping is one of the central tricks in the lawyers' bag of "you need me to represent you."

      That they have let venue shopping be so egregiously abused for so long is a testament to the glacial nature of supreme court justice. We can elect a whole new house of Representatives every 2 years, the entire legislative and executive branches every 6, but Judges for life are in no hurry.

  • by JDAustin ( 468180 ) on Monday March 27, 2017 @02:30PM (#54120909)

    We have dedicated courts specifically for Bankruptcy and Immigration. We need a dedicated court for both Patent and Malpractice issues.

    • We effectively have that, you just dislike their methodology. The Texas court in question handles so many patent cases, that it is the defacto dedicated court.

      But they got that way by illegally intentionally favoring a specific point of view, favoring patent holders no matter how ridiculous the patent or complaint. One major factor is their strong belief in jury trials, which slows things down, and raises trial costs significantly, and increases the risk of a ridiculous over the top jury award. All of th

      • by Altrag ( 195300 )

        There's a huge difference between being the "de facto" standard due to rubberstamping in favor of the plaintiff (who usually gets to decide where they file their complains,) and being explicitly designed with the intent of treating cases fairly ie: not favoring the plaintiff by default.

        • by russotto ( 537200 ) on Monday March 27, 2017 @03:24PM (#54121377) Journal

          There's a huge difference between being the "de facto" standard due to rubberstamping in favor of the plaintiff (who usually gets to decide where they file their complains,) and being explicitly designed with the intent of treating cases fairly ie: not favoring the plaintiff by default.

          Unfortunately, not really. Patent appeals are by design handled exclusively by the Court of Appeals for the Federal Circuit.... which results in them favoring a very expansive version of patent law even when SCOTUS tells them to cool it.

          • by Altrag ( 195300 )

            I'm not entirely sure I draw the line from A to B here. Why does that result in favoring expansive patent law? Just so that they have something to do with their time? Seems like SCOTUS or whoever should be smacking them around a lot harder if they're continually making judgements based on how bored they are (or whatever you think is causing the favoritism) rather than the actual merits of each case.

    • We have dedicated courts specifically for Bankruptcy and Immigration. We need a dedicated court for both Patent and Malpractice issues.

      We have dedicated courts for Patents, that's a good bit of the problem. Congress created it to take the load off SCOTUS (who use to be the sole arbiter of patents cases); since then NPE's have arisen and it's become a nightmare for everyone.

  • It's obvious that patent cases should be heard in the 9th Circuit.

    Or at least San Antonio.

  • ... for quite some time that it wasn't a good idea to ride on a stagecoach through Texas.

  • A quarter century sounds like a lot because it uses the big word 'century' but it's only 25 years, which really isn't very long in legal terms. The supreme court frequently makes decisions on cases that are a century.
    • by amiga3D ( 567632 ) on Monday March 27, 2017 @03:14PM (#54121291)

      In the tech industry it's an incredible length of time. 25 years ago Intel introduced the 80486DX2, the same year Commodore Business Machines launched the Amiga 1200 computer. I now emulate an Amiga 1200 at full speed on a Raspberry Pi 3, a 35 dollar throwaway computer board. 25 years in the tech industry sees companies rise and fall and products come out, go obsolete and their replacement go obsolete, etc....

      • by JoeMerchant ( 803320 ) on Monday March 27, 2017 @04:15PM (#54121751)

        25 years saw this nation move from a British Colony, through a war of independence and a provisional government, into one based on the present Constitution, move its capital from Philadelphia to a dedicated federal district, and double its population from ~2.5 million to more than 5 million.

        Doesn't matter when you live, a lot happens in 25 years, or relatively little, depending on what you focus on.

    • by Altrag ( 195300 )

      25 years is also more than 10% of the entire history of US law. That's not insignificant.

  • by dinfinity ( 2300094 ) on Monday March 27, 2017 @03:10PM (#54121249)

    "US Top Court"

    Because "supreme" just doesn't quite cut it.

    • "US Top Court"

      Because "supreme" just doesn't quite cut it.

      Supreme like Hawaii are just Pizza adjectives.

    • Yeah. But then you get situations such as Australia, where the High Court is above Supreme Courts.

  • I would take all of the judges, as they finish their case loads, and completely disperse them randomly to all the federal court districts.

    The idea is a patent troll wouldn't be able to venue shop as their favorite judge may be in the heart of Silicon Valley, right alongside other judges that frown upon this revenue seeking business model.

    To the patent troll, this puts the randomness back into Russian Roulette, by having at least one chamber loaded.
  • A.If you claim a patent. And do not implement it. You must give up your patent. B. Patents cannot be vague or wide sweeping. They must be focused and targeted on a single item.
  • What else do you call them? That's what they are...

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