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EFF to Court: Stop Shielding Patent Trolls That Send Baseless Demand Letters

Getting a patent demand letter from a troll can be a scary experience. The letters often include a lot of legal jargon, not to mention a patent that is often impenetrable (at least, not without hiring an expensive lawyer to translate it for you).

But suppose you are concerned that the patent may impact your business. After trying to reach an agreement with the patent owner and failing, you may be told by your lawyer that the next step is to go to court.

Unfortunately, thanks to a 1998 court case, you often can’t go to your local courthouse and get things figured out. Instead, you may be forced to go to a courthouse across the country, in a small corner of a state that you have little to no connection to.

Today, EFF and Public Knowledge filed a friend-of-the-court brief asking the Court of Appeals for the Federal Circuit (the court that hears all patent appeals) to toss out its case law that makes it very difficult for the recipient of a demand letter from an out-of-state patent troll to have the recipient’s local court decide patent rights.

The case that started it all, Red Wing Shoe, held that because courts should particularly promote “settlement” in the patent context, courts, in “fairness” cannot require a patent owner to litigate their patent infringement claim in the alleged infringer’s home court. In legal speak: there is no “personal jurisdiction” in the recipient’s district over a foreign patent owner that sends a demand letter, because it doesn’t comport with fair play and substantial justice.

As we discuss in our amicus brief, this restrictive rule of personal jurisdiction over those sending demand letters has helped lead to the rise of forum shopping by patent owners. Patent owners—in particular those whose sole business is asserting patents—can effectively force any recipient of their demands to sue them only in the Federal court district where they set up shop. This is particularly problematic where, as we have previously discussed on numerous occasions, certain courts have rules that systematically favor patent owners over patent defendants. Our amicus brief also points out that the Red Wing Shoe rule and the basis for it conflict with more recent Supreme Court precedent and modern patent assertion practices.

To be clear, it may very well be that it would be unfair to bring a particular patent holder into another state. But this should be examined on a case-by-case basis, as the Supreme Court has instructed, rather than be dictated by a strict rule. We hope that the Federal Circuit takes this opportunity to revisit its ill-advised Red Wing Shoe decision and to help ensure that those faced with a patent troll demand letter can better get the judicial help they need. 

Update: Two other friend-of-the-court briefs were filed, similarly criticizing the Federal Circuit's Red Wing Shoe rule. One brief was filed on behalf of 34 law professors, the other by six companies

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