A decision handed down by the U.S. Supreme Court Monday concerning patent infringement lawsuits will have a “profound impact” on so-called patent trolls, and changes jurisdictional considerations for federal courts across the country, says an intellectual property expert.
“Patent trolls that are accustomed to more patent-friendly venues may find it more difficult to extort settlements from their victims,” Andrew Williams, a partner in the Chicago-based McDonnell Boehnen Hulbert & Berghoff, told The Cook County Record.
Williams, who specializes in intellectual property law, said the decision could conversely make it more difficult for some companies to assert their rights under a patent.
“It may therefore be more difficult to sue multiple infringers in the same court if they are not incorporated in the same state,” he said. “It may also cause patent owners to lose potential home-court advantage, because any suit now may need to be filed where the accused infringer is located. These results could discourage patent owners from legitimately asserting their patent rights.”
The decision was based on an argument brought forward by Indiana based TC Heartland LLC, a maker of water flavorings, against Kraft Heinz, who had tried to sure Heartland in a Delaware court.
Heartland’s attorneys successfully argued that Delaware, where Kraft is incorporated, was not the proper venue for the suit and that it should have been filed in the state where Heartland is incorporated.
Previously, suits could be brought forward anywhere a business sold its products.
Williams said the old standard meant that anyone pursuing an infringement suit had more latitude in picking a court that was deemed friendlier to their case. The federal court in the Eastern District of Texas was one such venue, where it is estimated that nearly one-third of patent cases are filed.
“The Eastern District of Texas is favored by patent owners because they tend to win more cases in that district, the cases are concluded more quickly, and the infringement awards are thought to be higher than average,” Williams said. “There are still companies that are incorporated in Texas, which could still be sued in this venue, but the large majority of patent-infringement suits going forward will need to be filed elsewhere.”
Williams predicted that the number of patent suits in the Eastern District of Texas will fall, but he said it is still unknown how the ruling might impact the caseload of the federal court of the Northern District of Illinois in Chicago.
“The potentially far-reaching implication of this case is that instead of seeing cases brought by mainly Illinois-based patent owners, the Northern District is likely to see patent owners from around the country suing Illinois corporations here,” he said. “In other words, the Northern District could go from being more offensive-based to a more defensively-based venue.”