US Supreme Court ruling may shrink tide of frivolous patent lawsuits against Apple [u]

Posted:
in General Discussion edited May 2017
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.
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Comments

  • Reply 1 of 26
    AppleInsider said:

    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.
    I don't see how you reached this conclusion (that it's unlikely to affect "the likes of Nokia").  The ruling isn't about "trolls' versus non-trolls.  The plaintiff in this case (Kraft Heinz) is decidedly not a patent troll.  This seems like a very straightforward (and major) ruling that if you want to sue Apple, for example, sue them in California where they are incorporated rather some cherry picked jurisdiction where they happen to do business.
    ronnSpamSandwich
  • Reply 2 of 26
    carnegiecarnegie Posts: 955member
    AppleInsider said:

    ...

    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 jursidiction where the target company is incorporated, according to Reuters. 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.

    ...

    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.
    edited May 2017 randominternetpersonanton zuykov
  • Reply 3 of 26
    mystigomystigo Posts: 140member
    What are those troglodytes in East Texas gonna do now? They can only hear law suits on dirt sifting and meth labs now. Yee haw!
    anantksundarambaconstangwatto_cobra
  • Reply 4 of 26
    carnegie said:
    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.
  • Reply 5 of 26
    repressthisrepressthis Posts: 496member
    Hopefully now Marshall Texas will be wiped off the map. I don't sincerely mean that, but what a strange place full of stranger law "professionals." Happy to hear their local industry of corruption is now dead. Thanks SC
    randominternetpersonjbdragonbaconstangwatto_cobra
  • Reply 6 of 26
    mystigo said:
    What are those troglodytes in East Texas gonna do now? They can only hear law suits on dirt sifting and meth labs now. Yee haw!
    Really? You know them so well? You sound a bit as troglodyte who has basic lack of knowlege of states. Go and travel there. I did... and I am originally from Europe... living in NYC area just to stop your other foolish comments that may attack me. Yep I traveled also to California trecently (yes my friend works in Apple as well and we have quite a a lot IT expereince in the US especially in finance).

    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).
    damn_its_hot
  • Reply 7 of 26
    carnegiecarnegie Posts: 955member
    carnegie said:
    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.
    You're welcome.
  • Reply 8 of 26
    sdw2001sdw2001 Posts: 17,673member
    Hopefully now Marshall Texas will be wiped off the map. I don't sincerely mean that, but what a strange place full of stranger law "professionals." Happy to hear their local industry of corruption is now dead. Thanks SC

    Watch it.  I know someone very well who works in patent law and worked in the Eastern District.  :)  
    edited May 2017
  • Reply 9 of 26
    sdw2001sdw2001 Posts: 17,673member

    mystigo said:
    What are those troglodytes in East Texas gonna do now? They can only hear law suits on dirt sifting and meth labs now. Yee haw!
    Really? You know them so well? You sound a bit as troglodyte who has basic lack of knowlege of states. Go and travel there. I did... and I am originally from Europe... living in NYC area just to stop your other foolish comments that may attack me. Yep I traveled also to California trecently (yes my friend works in Apple as well and we have quite a a lot IT expereince in the US especially in finance).

    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).

    It's not the office, it's the law that's the problem.  
  • Reply 10 of 26
    sdw2001sdw2001 Posts: 17,673member
    As I mentioned, I know someone (very well) who is involved in this.  The person worked with the Eastern District and now works in D.C.  I can't really say more than that, except that [they] have a full and complete understanding of the ruling.  For those in patent law, this is, in fact, expected to vastly reduce patent trolling.  I know this because I talked to someone with better qualifications on the topic other than maybe 5 people on the planet (not exaggerating).   
    randominternetpersonnetmage
  • Reply 11 of 26
    dysamoriadysamoria Posts: 3,430member
    Typo: "...known to favorable to plaintiffs in patent cases."
  • Reply 12 of 26
    gatorguygatorguy Posts: 23,174member
    sdw2001 said:
    As I mentioned, I know someone (very well) who is involved in this.  The person worked with the Eastern District and now works in D.C.  I can't really say more than that, except that [they] have a full and complete understanding of the ruling.  For those in patent law, this is, in fact, expected to vastly reduce patent trolling.  I know this because I talked to someone with better qualifications on the topic other than maybe 5 people on the planet (not exaggerating).   
    I would have thought you must be referring to T.John except I don't think he's in DC. 

    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. 
  • Reply 13 of 26
    jdgazjdgaz Posts: 381member
    There is hope for the USA. An 8-0 decision. Who says we cant get people to agree on things.
    repressthis
  • Reply 14 of 26
    I would love to know the story about how one Federal judicial district earned this (deserved) reputation as being friendly to patent plaintiffs.  Did it start with one influential judge?  But how did it persist for this long?  The President appoints all these judges, why didn't someone in the White House at some point step in to tilt the balance (by appointing new judges of a different bent to fill openings)? 
    stourquepscooter63
  • Reply 15 of 26
    arlorarlor Posts: 528member
    Is there an Apple Store or other Apple presence in the East District, that would hit the second prong of the test?
  • Reply 16 of 26
    SpamSandwichSpamSandwich Posts: 33,408member
    AppleInsider said:

    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.
    I don't see how you reached this conclusion (that it's unlikely to affect "the likes of Nokia").  The ruling isn't about "trolls' versus non-trolls.  The plaintiff in this case (Kraft Heinz) is decidedly not a patent troll.  This seems like a very straightforward (and major) ruling that if you want to sue Apple, for example, sue them in California where they are incorporated rather some cherry picked jurisdiction where they happen to do business.
    I think the Eastern District of Texas is usually chosen because it's ofttimes favorable to those filing suit.
  • Reply 17 of 26
    carnegiecarnegie Posts: 955member
    arlor said:
    Is there an Apple Store or other Apple presence in the East District, that would hit the second prong of the test?
    Apple's website indicates that there's one in Plano, Texas, which is in the Eastern District of Texas.
  • Reply 18 of 26
    robin huberrobin huber Posts: 3,478member
    Will this effect suits that have already been filed in Texas?

    Perhaps Apple could stop selling products in that district, then trolls would have no standing there? 😏
    repressthisanton zuykov
  • Reply 19 of 26
    carnegiecarnegie Posts: 955member

    jdgaz said:
    There is hope for the USA. An 8-0 decision. Who says we cant get people to agree on things.
    Supreme Court Justices agree with one another quite often. Around half of the Court's merit decisions are unanimous.
    repressthisnetmagepscooter63anton zuykov
  • Reply 20 of 26
    MplsPMplsP Posts: 3,268member
    Definitely good news, although not for Marshall, TX. From what I understand, legal 'tourism' generated by all the patent suits is quite the industry there. Patent trolls are kind of like pornography. Everyone knows them when they see them, but writing laws to combat them is easier said than done. Hopefully this will help.
    repressthisnetmageanton zuykov
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