The Supreme Court ruled unanimously Monday that patent lawsuits must be filed by companies on the defendant's turf, a decision expected to protect U.S. automakers from predatory patent litigation.
The patent case, TC Heartland LLC v. Kraft Foods Group Brands, focused on where plaintiffs in an intellectual property or patent infringement dispute can file a lawsuit. The Supreme Court's decision will greatly reduce the patent infringement cases debated in the Eastern District of Texas federal court, where the vast majority of these suits are fought, according to Joseph Barber, an intellectual property attorney for Howard & Howard in Royal Oak, Mich.
Until this lawsuit, plaintiff were allowed to file a patent infringement suit in any district where the defendant does business, regardless of where a company was based, as long as there was infringing activity within the Eastern District a case could be argued there.
Between plaintiff-friendly juries and a Texas law requiring the use of a local lawyer in proceedings, moving patent cases out of the Texas federal court could end up saving automakers tens of millions in legal expenses. The process, known as "forum shopping," in which plaintiff's file suits in a court setting that is more likely to side with them, is used often in these patent cases.
"People who had no connection to Texas were being dragged down to Texas just because it was a favorable venue for plaintiffs," Barber said.
James Cleland, an attorney with Brinks Gilson & Lione in Ann Arbor, Mich., said federal district courts have seen a steady rise in patent litigation over the past few years, but the load of those kinds of cases in Eastern District of Texas has grown 29 percent in five years.
"When one single judge in the Eastern District of Texas hears over 25 percent of our entire nation's patent cases, it certainly raises eyebrows," Cleland said.