Leading a coalition of 17 states, Texas Attorney General Ken Paxton today filed an amicus brief in the U.S. Supreme Court on the question of where patent owners can file claims – a case that may shake-up national patent practice. The attorney general’s brief stresses the harm to Texans from abusive claims of patent infringement, which are a drag on economic growth. The high court has agreed to hear TC Heartland v. Kraft Food Brands Group sometime this year.
In his friend-of-the-court brief, Attorney General Paxton explains that the U.S. Court of Appeals for the Federal Circuit wrongly departed from the Supreme Court’s interpretation of the patent-venue statute by no longer requiring businesses to be sued in the district where they reside (e.g., are incorporated) or where the alleged infringement occurred and the defendant has a place of business. Instead, the Federal Circuit’s case law allows these lawsuits in any judicial district in the nation where personal jurisdiction exists. This expansion of patent venue has contributed to rampant venue shopping for plaintiff-friendly jurisdictions, especially by firms that buy patents in order to use the cost of litigation to force payment of license fees.
The brief centers on the Eastern District of Texas – one of 94 federal judicial districts in the United States – which has attracted anywhere between 25 and 50 percent of all patent infringement lawsuits in recent years. In that district, the average patent damages award is $38 million above the average awarded outside the district. The brief highlights some unusual results of this concentration of patent cases in the Eastern District, such as one technology company’s purchase of a prize bull in a town’s livestock auction or another’s sponsorship of an ice-skating rink.
“The Federal Circuit’s misinterpretation of the patent venue law undermines public confidence in the judicial system and has, as it was once described, turned the Eastern District of Texas into an intellectual property ‘speed trap,’” Attorney General Paxton said. “Patent trolls know full well that the cost of litigating cases there makes it cheaper for many companies to just pay them to go away. That’s why it’s so important for the Supreme Court to reverse the lower court.”
Texas is joined in the amicus brief by Arizona, Colorado, Connecticut, Hawaii, Illinois, Iowa, Maine, Maryland, Michigan, Nebraska, North Carolina, Ohio, South Carolina, Vermont, Virginia, and Wisconsin.
To view a copy of the brief click here: https://www.texasattorneygeneral.gov/files/epress/tsac_16-341_Texas_et_al.pdf