I know this is not a copyright question, but I hope you can shed light on something that’s been bothering me for some time. Why, in this great and broad country of ours, has it seemed like every other patent case is being decided in an obscure town in East Texas called Marshall? How is that fair to companies that have nothing much to do with Texas, let alone that one small town?
Malus Domestica McIntosh
In recent years, 45% of all patent cases have, indeed, been brought in the United States District Court for the Eastern District of Texas in Marshall, Texas. Big companies like Apple, Microsoft and others have been dragged into court in a small Texas town. Because that court has special rules for patent cases, and judges and juries there have become known as being favorable to patent owners, many lawyers engaged in “forum shopping”, choosing to bring their complaints there. They were able to do that because back in 1990, the Court of Appeals for the Federal Circuit (CAFC) decided that Congress changed the law controlling where patent suits could be started. The CAFC had to do some pretty fancy legal footwork to get that result…
On May 22, 2017, the Supreme Court decided TC Heartland LLC v. Kraft Food Brands Grp. LLC, 581 U.S. ___ (2017), and reversed the CAFC’s long-standing practice permitting venue over domestic corporations to be wherever a court had personal jurisdiction. Now, “[a]s applied to domestic corporations, ‘reside[nce]’ in §1400(b) refers only to the state of incorporation.” The Supreme Court told the CAFC that neither a 1988 amendment nor a subsequent 2011 amendment to §1391(c) changed the meaning of § 1400(b). In a somewhat dubious statement, they said that Congress, “ordinarily provides a relatively clear indication of its intent” when it wants to alter the meaning of a law. The Court found that the current version of §1391, “does not contain any indication that Congress intended to alter the meaning of §1400(b) as interpreted by Fourco.”
What does all this mean? For starters, it means that lawyers can avoid wearing those pointy boots and big hats down there in Marshall. Most corporations are not incorporated in Texas, and few actually have established places of business in East Texas. For the law firms that opened offices there, it means that they’re about to get longer vacations. On the other hand, our friends in the First State who practice in the District of Delaware may be about to see an increase in business. Given how many corporations are established there, it’s pretty safe to say that they will be going to Wilmington some time very soon.
Have a question about intellectual property law? The attorneys at LW&H eat, sleep and breathe this stuff. Give them a call. You’ll be glad that you did.
Until next month,