One of the best weapons a patent troll has in extorting an undeserved settlement is the cost of litigation. If a defendant knows that a case will drag on for several months, or even years, and will require her to spend significant resources to prevail, she is more likely to give in to pressure from a patent troll.
Recently, the Eastern District of Texas made that weapon even sharper.
Last year, the Supreme Court decided Alice v. CLS Bank, making clear that abstract ideas implemented on a generic computer are not patentable. Many defendants have been filing “motions to dismiss” claims of patent infringement, based on the Alice decision. Oftentimes, these motions come early in the case, and work to quickly and efficiently invalidate a patent that never should have issued. Since Alice, this strategy has been quite successful, with defendants winning more than 50% of the motions to dismiss filed in 2015.
But certain judges in the Eastern District of Texas now require parties to ask permission to file these motions early in the case, and must show “good cause” for that permission. This is despite a clear procedural right for a defendant to file such motions, and case law from the Federal Circuit that recognized such motions as proper.
The law does not allow a judge to make rules inconsistent with the Federal Rules. But the judges have now imposed this requirement, and when approximately 25% of all patent cases are filed in the Eastern District of Texas, this is a big deal.
We’ve written about this issue before. The Eastern District of Texas already requires parties to ask permission to file summary judgment, contrary to the Federal Rules that grant parties the right to file. As we previously explained, we don’t think the judges in the Eastern District of Texas can impose this requirement.
The Eastern District of Texas also limits the procedural rights of parties by requiring the parties to turn over any “relevant” information to the other side without being asked for it. The Federal Rules require courts to take into account the burden and expense of turning materials over, in light of how relevant it actually is. The Eastern District turns this on its head by forcing disclosure of it all, no matter what the cost, how much is at stake, or just how important it actually is.
These sort of rules unfairly hurt defendants. They increase costs, prolong litigation, and help patent trolls to use those consequences to extort undeserved money from defendants. It is not a coincidence that patent trolls are choosing to file in the Eastern District of Texas, to the economic benefit of the region. We urge the Eastern District of Texas to bring its courts back into line with the Federal Rules.