US Supreme Court ruling may shrink tide of frivolous patent lawsuits against Apple [u]
The U.S. Supreme Court on Monday issued a critical decision that could reduce the number of patent lawsuits tech companies like Apple face on a yearly basis. [Updated with correction on case limits]
In an 8-0 ruling, the court sided with drink flavoring company TC Heartland against Kraft Heinz, arguing that patent infringement suits can only be filed in the jurisdiction where the target company is incorporated or where "the defendant has committed acts of infringement and has a regular and established place of business." The ruling overturns a 2016 decision by the U.S. Court of Appeals for the Federal Circuit, which said that lawsuits should be possible anywhere a defendant's products are on the market.
So-called patent trolls -- holding firms that don't sell a tangible product -- will often file lawsuits against businesses like Apple through a single federal district in east Texas known to favorable to plaintiffs in patent cases. This is despite many of the defendants being based in California, and many of the plaintiffs having little to no presence in the Eastern District.
Even bigger plaintiffs will sometimes choose the Eastern District, an example being Nokia, which is still engaged in a global legal battle with Apple.
Over 40 percent of all patent suits reportedly pass through the Eastern District, 90 percent of that number originating from patent trolls.
The Supreme Court ruling is unlikely to affect the likes of Nokia, but may deter smaller patent holders with frivolous claims. A risk is that federal courts in California could become clogged with patent cases, slowing down an already strained system.
In an 8-0 ruling, the court sided with drink flavoring company TC Heartland against Kraft Heinz, arguing that patent infringement suits can only be filed in the jurisdiction where the target company is incorporated or where "the defendant has committed acts of infringement and has a regular and established place of business." The ruling overturns a 2016 decision by the U.S. Court of Appeals for the Federal Circuit, which said that lawsuits should be possible anywhere a defendant's products are on the market.
So-called patent trolls -- holding firms that don't sell a tangible product -- will often file lawsuits against businesses like Apple through a single federal district in east Texas known to favorable to plaintiffs in patent cases. This is despite many of the defendants being based in California, and many of the plaintiffs having little to no presence in the Eastern District.
Even bigger plaintiffs will sometimes choose the Eastern District, an example being Nokia, which is still engaged in a global legal battle with Apple.
Over 40 percent of all patent suits reportedly pass through the Eastern District, 90 percent of that number originating from patent trolls.
The Supreme Court ruling is unlikely to affect the likes of Nokia, but may deter smaller patent holders with frivolous claims. A risk is that federal courts in California could become clogged with patent cases, slowing down an already strained system.
Comments
This decision does not mean that patent infringement actions can only be brought where the target company is incorporated. It means that when the defendant is a corporation the residence prong of 28 USC §1400(b) only refers to where a company is incorporated. 28 USC §1400(b) also allows patent infringement actions to be brought "where the defendant has committed acts of infringement and has a regular and established place of business."
So such actions can be brought either where a company is incorporated or where it has a regular and established place of business and has committed acts of infringement.
Thanks for the clarification. The defendant in this case is some dinky firm without a national presence, but that's not going to help Apple. Bummer.
I would suggest less of derrogatory comments especially about far more healthy state as Texas - where Californians seem to migrate - and watch what happens in places with a lot of problems like California.
Now if you reasonable picked on then that would be only one town in Texas that jursdiction seems to abuse weak USPTO. And I am saying weak because I was educated in European laws that are not allwoing for certain types of abuse (part of mandatory education on patents and licences in most of engineeing colleges and universities overseas - so no lawyer tries to give engineer BS and we can patent on our own in proper way).
Watch it. I know someone very well who works in patent law and worked in the Eastern District.
It's not the office, it's the law that's the problem.
Anyway, good post relying on a knowledgeable source. Thanks.
PatentlyO came to the same conclusion well before SCOTUS even issued this ruling. I guess it was generally expected.
Perhaps Apple could stop selling products in that district, then trolls would have no standing there? 😏
Supreme Court Justices agree with one another quite often. Around half of the Court's merit decisions are unanimous.