Goodbye Home Field Advantage?
Supreme Court’s ruling on where patent cases can be filed means an East Texas federal court is no longer an easy venue for plaintiffs.
In sports, the team playing on its home field often has the advantage. The same can be said with respect to litigation. Any patent infringement attorney worth his/her salt spends much time carefully considering the available options before choosing the optimal place to bring a particular piece of patent litigation. Such deliberation takes place in order to obtain the legal equivalent of a home field.
But in TC Heartland v. Kraft Foods, the U.S. Supreme Court transformed the dynamics of patent litigation. No longer can domestic companies be sued in a venue simply because of certain “minimum contacts.” Rather, a company accused of patent infringement must be sued in the judicial district in which it is incorporated, or the district where it has a regular and established place of business, provided it’s accused of committing acts of infringement there. East Texas looks to suffer the brunt of this decision.
If statistics are an indicator, the home field for plaintiffs filing patent litigation has been in East Texas, and, in particular, the small town of Marshall.
Researchers studying patent filings found that between 2014 and mid 2016 a Marshall judge was assigned over 3,000 new patent suits.
Astoundingly, this number was more than the patent total of all district courts in the states of California, Florida and New York combined. In 2015, over 40 percent of all patent cases filed nationwide landed in the federal courts for the Eastern District of Texas.
Even within the State of Texas, that the Eastern District would be considered so popular is remarkable. Houston, San Antonio, Dallas, Austin, Fort Worth and El Paso are, by population, respectively the 4th, 7th, 9th, 11th, 16th and 20th largest cities in the United States. Further, East Texas is not home of the high-tech industry. In fact, one study concluded that less than 2 percent of the patent cases filed there involved technology that was invented there.
Many reasons have been posited over the years as to the allure of the Eastern District to patent plaintiffs. These include such factors as the experience of the judiciary, speed with which cases can be brought to trial, sympathetic juries, and other, even less tangible explanations.
Though cases will, no doubt, continue to be filed in East Texas, it can be expected that more cases will be filed in other districts and in other states.
The new hotbed? Delaware. Delaware is home to more than half of the U.S.’ largest public corporations. ln the six-month period following the TC Heartland decision, Delaware witnessed a sharp increase in new patent filings.
Conversely, during this same period, the Eastern District of Texas’ patent filings declined dramatically. So much so, in fact, Delaware appears to be well on its way to becoming the district with the most patent cases pending.
Is it time to say “goodbye home field advantage or, rather, is another venue and another party merely greeting the advantage at the door? Time will tell.
Brian K. Yost, a guest columnist for FW Inc., is a shareholder in the Decker Jones law firm in Fort Worth. He has more than 25 years of legal experience and is a registered patent lawyer by the U.S. Patent and Trademark Office.
This article originally ran in FW Inc. in January of 2018.