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posted by martyb on Wednesday May 24 2017, @10:38AM   Printer-friendly
from the patent-friendly-jurisdictions dept.

The Register reports

The US Supreme Court has issued a ruling that could block patent-holding firms from seeking out friendly courts to hear their infringement claims.

An 8-0 ruling by the nation's top court in the TC Heartland v Kraft Foods [PDF] case held that a company can be sued only in the state where it is incorporated, rather than in any district where the company happens to do business.

The unanimous decision (newcomer Neil Gorsuch did not take part in the hearing) will place stricter limitations on where patent infringement suits can take place, and will bar plaintiffs from seeking out friendly judges more likely to side with patent holders.

TechDirt adds

Another Supreme Court case on patents, and another complete smackdown of the Court of Appeals for the Federal Circuit (CAFC), the court that is supposed to be the "expert" on patent cases. [...] As you've probably heard, for years now patent trolls and other aggressive patent litigants have been filing their cases in East Texas, as it's become a jurisdiction that is ridiculous friendly to patent holders. The towns of Marshall and Tyler, Texas have practically built up industries around the fact that they are "patent friendly" jurisdictions. In the past few years, a second favored jurisdiction has popped up: Delaware, after a few academic studies showed that the courts there may have been even more friendly than East Texas. The TC Heartland case was about a case filed in Delaware, and raised the issue of whether or not this kind of patent forum shopping was okay.

CAFC, in its usual CAFC manner, said "sure, that's great, we love jurisdiction shopping and have since our 1990 ruling in VE Holding v. Johnson Gas". This was kind of ironic, as one of the key justifications given for setting up CAFC in the first place was to put an end to jurisdiction shopping in patent cases.


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  • (Score: 2, Informative) by Anonymous Coward on Wednesday May 24 2017, @12:17PM (5 children)

    by Anonymous Coward on Wednesday May 24 2017, @12:17PM (#514761)

    You must file suit against a company in the juirisidction they are incorporated in, not just one they do business in.

    However, if you are a company incorporated outside the US, don't have any offices in the US, and don't employ anyone in the US but you do business with anyone inside the US over the internet and break a US law then we are going to kidnap the officers of your company and drag them here to stand trial.

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  • (Score: 2) by hemocyanin on Wednesday May 24 2017, @02:12PM

    by hemocyanin (186) on Wednesday May 24 2017, @02:12PM (#514813) Journal

    I haven't looked at the rule but I'd be shocked if there isn't an "or" in there along the lines of "District where incorporated or in $defaultDistrict if not incorporated in the US."

  • (Score: 0) by Anonymous Coward on Wednesday May 24 2017, @03:59PM (2 children)

    by Anonymous Coward on Wednesday May 24 2017, @03:59PM (#514877)

    You must file suit against a company in the juirisidction they are incorporated in, not just one they do business in.

    You are not a lawyer.

    To be clear, I am also not a lawyer. However, I have taken some classes in law, and typically you can bring suit against somebody in either the jurisdiction they in incorporated or their "primary place of business." In most regular law, you can file suit against a company in any place they do business, as the government claims jurisdiction due to this presence. (e.g. This is why each state in the US can claim sales tax against each store, rather than Walmart saying, "go away California we don't need to respect your laws, we're a legal entity of Delaware.")

    The SCOTUS actually is breaking with traditional laws and saying that patent litigation is different.

    If you don't believe me, because I am not a lawyer, you can see the official Supreme Court blog entry at: http://www.scotusblog.com/2017/05/opinion-analysis-justices-rein-federal-circuits-lax-rules-patent-venue/#more-255977 [scotusblog.com]

    I'm not an expert, but based on a superficial reading it seems like this is bad legal justification leading to a good result. We'll see if it really is a bad legal justification, and if so then if it will come back and bite us later.

    • (Score: 3, Informative) by bob_super on Wednesday May 24 2017, @04:28PM (1 child)

      by bob_super (1357) on Wednesday May 24 2017, @04:28PM (#514908)

      SCOTUS is pointing out that there are two standards in law, and that the stricter one should be used when filing patent lawsuits, not the looser one, as had been the case since a prior non-SCOTUS decision.
      The fundamental rationale is that you're not taking Grandma to Delaware when she gets beaten up by a drunk store employee, but you have the burden of going to the right place for an abstract case about IP, rather than shop around for a friendly judge.

      In other news, there was much rejoicing in any place not called East Texas.

      • (Score: 2) by Hawkwind on Thursday May 25 2017, @04:13AM

        by Hawkwind (3531) on Thursday May 25 2017, @04:13AM (#515277)

        Thanks, now this decision makes sense. From the decision:

        1897, Congress enacted a patent specific venue statute. This new statute (§1400(b)’s predecessor) permitted suit in the district of which the defendant was an “inhabitant” or in which the defendant both maintained a “regular and established place of business” and committed an act of infringement. 29 Stat. 695. A corporation at that time was understood to “inhabit” only the State of incorporation.

  • (Score: 0) by Anonymous Coward on Wednesday May 24 2017, @11:05PM

    by Anonymous Coward on Wednesday May 24 2017, @11:05PM (#515179)

    Yeah I think Kim Dotcom is a doosh but what they did to him is terrible