The Federal Circuit rejected the patent venue test recently established by Judge Rodney Gilstrap of the Eastern District of Texas, the judge who has been reported to preside over about one quarter of all patent infringement cases in America. The three judge panel held that Judge Gilstrap abused his discretion and applied an incorrect legal standard in Raytheon Co. v. Cray Inc. when he refused to transfer the patent suit after applying his own four-factor test and determined defendant Cray maintained “a regular and established place of business” in the district where only one of its employees worked from home. As a result of its findings, the Federal Circuit ordered the case to be transferred.
For declaratory judgment (DJ) actions concerning patents, whether a patent owner’s conduct is sufficient for there to be a real and immediate controversy is the usual jurisdictional hurdle. In BASF Plant Science, LP v. Nuseed Americas Inc., a District of Delaware court recently examined a different issue–who must be named as a defendant to support DJ jurisdiction when there is an exclusive patent licensee.
The Supreme Court held in Matal v. Tam that the Lanham Act’s provision forbidding the registration of disparaging trademarks is unconstitutional in violation of the First Amendment. The Court explained that “[s]peech may not be banned on the ground that it expresses ideas that offend.”
On May 22, the U.S. Supreme Court issued an important and long-awaited Opinion in TC Heartland LLC v. Kraft Foods Group Brands LLC, a case that centered on where a patent infringement suit can be filed. In a resounding 8-0 decision, the Supreme Court put an abrupt end to the decades-old practice of forum shopping in patent cases.
For almost 30 years, patent venue law allowed patent owners to file infringement suits in federal judicial districts in which the accused infringer is subject to the district court’s personal jurisdiction. This flexibility opened the doors to a patent owner’s home court and to distant courts that are perceived to be friendly to patent owners. Observers believe that this flexibility was being abused, especially by non-practicing entities or “patent trolls.” Non-practicing entities generate revenue by licensing and enforcing their patents as opposed to making or selling their own products.
If you’ve filed for patents in any industry – be it biotech, high tech, manufacturing, or another sector altogether – you’ve likely been faced with a decision on whether to file a “continuation” application at the US Patent and Trademark Office (USPTO). In simple terms, a “continuation” application is a new patent application allowing one to pursue additional claims based upon the same description and priority date(s) as a pending “parent” application. Continuation applications are a flexible tool, useful for furthering numerous business objectives.
On March 27, 2017, the U.S. Supreme Court heard oral argument in TC Heartland v. Kraft, a case that centers on where patent infringement lawsuits can be filed.
- If the Supreme Court sides with TC Heartland, patent infringement hotbeds like the Eastern District of Texas would likely see a drastic reduction in filings because cases would be limited to the state of incorporation of the defendant, or where the defendant has committed acts of infringement and has a regular and established place of business.
- Because many corporations select Delaware as their state of incorporation, a ruling in favor of TC Heartland would likely cause a sharp increase in patent infringement filings in that district.
- Switching the heavy patent infringement case load from the Eastern District of Texas to the District of Delaware will not solve TC Heartland’s concern about one judicial district handling a disproportionate majority of patent infringement cases.
- If the Supreme Court sides with Kraft Foods, the status quo will be maintained and patent owners will have flexibility in selecting venue for infringement actions.
Q: Why is the technology industry following TC Heartland v. Kraft so closely?
Paul Cronin: The Supreme Court recently agreed to take up TC Heartland, a case that will address the issue of where patent infringement lawsuits can be filed. The tech industry wants the Supreme Court to end the practice of “forum shopping,” or filing lawsuits in venues that are historically favorable to patent owners. The technology industry wants the law changed so patent infringement lawsuits must be filed in the accused infringer’s state of incorporation or where its headquarters is located. If this change occurs, “home court” advantage will shift from the patent owner to the accused infringer. Software, smart phones, and other technology companies have been among the hardest hit in terms of fighting patent litigation. The industry is looking to shut down the patent-friendly venues by forcing patent owners to file suit in the home district of the accused infringer.
Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.