Wednesday, May 24, 2017

The Supreme Court Limits Ability of Patent Trolls to Cherry-Pick Friendly Courts

In the case of TC Heartland v. Kraft, the Supreme Court on May 22 unanimously affirmed prior precedents that patent infringement lawsuits can be brought only where defendants are incorporated or doing business.

The decision reversed a lower court decision.

The appellate court upheld a much broader understanding of corporate residence that would allow patent assertion entities -- often called “patent trolls” -- to continue cherry-picking friendly courts for patent cases against faraway defendants, further increasing pressure to settle cases.

In 2015, 40 percent of patent suits were filed in just one of 94 federal judicial districts: the Eastern District of Texas. That court is known for its friendliness to patent assertion entities, which hold unused patents, often of dubious quality, and employ them primarily as the basis for collecting licensing fees and threatening litigation.

Read the court opinion.

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