The Supreme Court ruled unanimously that patent lawsuits must be filed by companies on the defendant's turf, a decision expected to protect U.S. automakers from predatory patent litigation.
The patent case that prompted the ruling, TC Heartland v. Kraft Foods Group Brands, focused on where plaintiffs can file an intellectual property or patent infringement lawsuit. The court's decision will greatly reduce the patent infringement cases heard in the Eastern District of Texas federal court, said Joseph Barber, an intellectual property attorney for Howard & Howard in Royal Oak, Mich.
Before, plaintiffs were allowed to file a patent infringement suit in any district where the defendant does business, regardless of where a company is based. The process known as "forum shopping," in which plaintiffs file suits in a court that is more likely to side with them, is used often in these patent cases.
"People who had no connection to Texas were being dragged down to Texas just because it was a favorable venue for plaintiffs," Barber said, with plaintiff-friendly juries and a Texas law that required the use of a local lawyer. The ruling could end up saving automakers tens of millions in legal costs.
James Cleland, an attorney with Brinks Gilson & Lione in Ann Arbor, Mich., said federal district courts have seen a steady rise in patent litigation over the past few years, but the load in the Eastern District of Texas has grown 29 percent in five years. He added: "When one single judge in the Eastern District of Texas hears over 25 percent of our entire nation's patent cases, it certainly raises eyebrows."