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EFF to Supreme Court: Patent Holders Shouldn’t Be Allowed to Cherry Pick the Courts

February 6, 2017

EFF to Supreme Court: Patent Holders Shouldn’t Be Allowed to Cherry Pick the Courts

Supreme Court Must End Texas’ Grip on Patent Cases, Restore Fairness in Court Selection

Washington, D.C.—The Electronic Frontier Foundation (EFF) urged the Supreme Court to overturn a court decision that tilted the scales in favor of patent trolls by making it easier for them to venue shop and file lawsuits in certain courts.

Venue shopping, also called forum shopping, is an insidious practice whereby parties to a lawsuit look for courts with procedures favorable to their cases. Unfortunately, some courts have engaged in an even more insidious practice known as forum selling by actively encouraging patent lawsuits in their districts. For example, a court might adopt plaintiff-friendly procedures and policies that undermine the rights of defendants.

One such court is the Eastern District of Texas, a rural area with almost no manufacturing, research, or technology facilities, where more than one-third of all patent cases in the country were filed last year. That proportion is no accident: patent litigants flock to Texas because the court has put in place a host of procedures that make it difficult for defendants to terminate meritless cases early, while also speeding up the time it takes for cases to go to trial.

Those procedures drive up litigation costs for defendants, which in turn puts more pressure on them to settle cases even if they believe they should win. Such pressure is especially beneficial to patent trolls—companies that don’t make any products but buy up patents, many of questionable validity, in order to file often frivolous infringement lawsuits to extract settlements.

This kind of venue shopping in patent cases was made possible by a 1990 court decision that upended decades-old rules that required patent cases be filed in locations that were fair and convenient to the person being involuntarily brought into court—such as the location of the defendant’s primary place of business. In a filing today in the lawsuit TC Heartland v. Kraft Foods, EFF asked the Supreme Court to overturn the 1990 decision and bring back basic fairness to patent litigation. Kraft Foods, based in Illinois, sued Indiana-based TC Heartland for patent infringement in Delaware, where the defendant has no offices or contracts.

“The Supreme Court can fix a rampant problem in patent law and make the process more fair and balanced. As it stands, many defendants can be hauled into court in any corner of the country, regardless of whether the location has anything to do with either party,” said EFF Staff Attorney Vera Ranieri. “Forum shopping harms all defendants, but it’s especially burdensome for small companies or individuals with limited means to travel to distant places or fight costly lawsuits.”

“Patent owners aren’t the only ones taking advantage of a bad court decision. Forum selling by courts is a black stain on the judicial system. Our courts shouldn’t be tilting the scales so that forum, as opposed to merits, ends up deciding the outcome of a case,” said Ranieri. “Venue shopping and selling drives up the costs of innovation for inventors and erodes trust in our courts. The Supreme Court can and should fix this problem.”

For the brief:
https://www.eff.org/document/tc-heartland-v-kraft-eff-brief

For more on this case:
https://www.eff.org/cases/tc-heartland-v-kraft-foods

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