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Supreme Court may kick patent trolls out of East Texas

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Supreme Court may kick patent trolls out of East Texas
Statistically, 40 percent of all patent lawsuits in the United States are heard in one single court, the Federal Court for the Eastern District of Texas.This court has reputation for being plaintiff-friendly , which is understandable : judges and attorneys often are bound by kinship ties and even former judges go to work for private law firms that specialize in patent law after retiring. It’s a real core business in East Texas, a kind of local mafia, so to speak.
It is amazing that in a "bastion of world democracy" it is possible in principle for one single judge in a small town to handle 25% of all patent litigation in the country – more than all the judges in California, Florida and New York combined! But it is the it was. in recent years. Now the East Texas anomaly has been touched upon before the U.S. Supreme Court in an unrelated case. The court is deciding whether to limit the geography of where a defendant in a patent case can be brought, Writes "The New York Times.
According to 2015 statistics, patent trolls are filing 90% of all patent lawsuits in the U.S. IT-related lawsuits. In doing so, highly questionable patents of extremely broad scope are used. For example, digital workflow patent offering companies a perpetual license at a rate of $1, 000 for each employee who uses a scanner in their office. There have been similar patent lawsuits Against the owners of WiFi hotspots. And corporate SSL users
Most defendants prefer not to enter into litigation so as not to waste time and enormous sums on paying lawyers – it is easier to pay a retainer, buy a "license to use technology" and forget about it like a bad dream. Only some particularly principled companies like Newegg and Kaspersky Labs. give back to trolls by defeating them in court and getting their patents revoked. After defeating a patent troll in 2013, Kaspersky Lab said it was the only one of 35 companies that didn’t cut a deal with the trolls and fought to the end in court. "We won the trial against a very powerful multi-level troll system, " said Eugene Kaspersky. Then he showed that patent trolls can and should be fought.
Patent trolls literally terrorize technology companies. They have accepted it as a necessary evil and often take the path of least resistance: they prefer to pay a modest amount of royalties just to avoid dealing with them. The East Texas court has become an integral part of these machinations. Clearly, the situation is not normal and needs to be changed.
The Supreme Court’s decision in the case now pending could play an important role if the court prohibits frivolous subpoenas of companies from other states to try the case in another jurisdiction. While this process has nothing to do with patent trolls, it will affect them directly. It’s all about geography.
The case went all the way to the court of highest instance TC Heartland v. Kraft Foods Group Brands, No. 16-341 Let’s explain the point. Heartland is headquartered in Indiana. Kraft is incorporated in Delaware, but does its main business in Illinois. Now, Heartland was selling its products in the category Water Enhancers. (with low-calorie sweeteners) including in Delaware, shipping them there under contract. As a result, Kraft sued Heartland for infringement of Kraft’s patents on similar products. The trick is that Kraft filed suit in federal district court in Delaware. Heartland responded that the claims should be denied because it is not incorporated in Delaware, has no office there, and does not intend to do business there in the future.
According to U.S. Court of Appeals for the Federal Circuit precedent of 1990 , in patent cases, the defendant’s domicile extends to several jurisdictions. But that precedent conflicts with the Supreme Court’s decision in Fourco Glass Co. v. Transmirra Products Corp. in 1957 which determined that the case should be heard only in the defendant’s jurisdiction.
Apparently, in this case, Heartland’s lawyers are trying to overturn the jurisdictional exception made for defendants in patent cases. If that exception is overturned, then lawsuits against technology companies will be handled as they should be – in California, where most of those companies are located. That’s where the presence of all defendants, witnesses and experts in such cases is made as easy as possible. The patent trolls will have to forget about their little "patent ghetto" in East Texas. By the way, now during the Heartland and Kraft litigation, the argument about bias in East Texas has just been made. A number of technology and internet companies supported claim Heartland and sent supporting materials to the Supreme Court outlining their argument against patent trolls.
True, there are other IT companies that have come out in favor of keeping the existing rules to have patent cases heard in courts that specialize specifically in such cases. Pharmaceutical companies, too. have spoken out that they are more comfortable trying all the small violators in one court.
Yesterday, one of the judges of the Supreme Court, Elena Kagan expressed surprise at about the fact that the U.S. Court for the Federal Circuit for the past 30 years has ignored a 1957 Supreme Court decision that makes it clear that the defendant should be tried in its jurisdiction and nowhere else. That decision has not been respected in patent cases since 1990. Apparently, now the Supreme Court is ready to finally put things in order.
If that happens, East Texas will have to find a new specialty for the many law firms that operate there.
The litigation continues. Plaintiff’s attorneys believe that such an important decision should be referred to Congress.

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