TC Heartland v. Kraft Foods is a U.S. Supreme Court case that effectively asked the court to decide whether patent owners could sue in practically any corner of the country. The law as interpreted by the Court of Appeals for the Federal Circuit, and under review by the Supreme Court, allowed patent owners to pick and choose between federal courts. This often led to patent owners opting for courts perceived to have rules and procedures favorable to their position. As a result, in 2015 almost 45% of all cases were filed in the Eastern District of Texas, a relatively rural part of the country that has no major technology industry.
In TC Heartland v. Kraft Foods, the U.S. Supreme Court ruled that patent owners can sue corporate defendants only in districts where the defendant is incorporated or has committed acts of infringement and has a regular and established place of business. This means that patent trolls can no longer drag companies to distant and inconvenient forums that favor patent owners but have little connection to the dispute.
When patent owners can drag defendants into court in far-flung corners of the country it can cause significant harm, especially for those who are on the receiving end of a frivolous lawsuit. Patent owners can pick a forum that is less inclined to grant fees, keep costs down, or stay cases. As a result, oftentimes it is cheaper to settle even a frivolous case than to fight. The Supreme Court decision curtailed some of the worst actors in the patent game.
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