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US Supreme Court to hear case that may ruin Lone Star patent trolls
Memories of East Texas venue shopping
The legal case of TC Heartland v Kraft Foods may appear to have very little to do with technology, but it could make life a lot harder for patent trolls – thanks to a US Supreme Court decision on Thursday.
The case between the two was brought by Kraft over its Mio Water Enhancer, a mixture of salt and flavorings for those who find regular water too dull. TC Heartland makes a similar product and Kraft contended that some of its intellectual property has been used to make the rival product.
Kraft wanted the case heard in Delaware, a state which has little to do with either company but is a notoriously patent-friendly venue. TC Heartland wants the venue to be in its home state, and has appealed an earlier ruling on the matter.
On Wednesday the Supremes granted certiorari [PDF] to the case, meaning it is on the schedule to be considered. If they rule in TC Heartland's favor, it will eliminate the practice of venue shopping, where companies bring cases in districts where some judges are more favorable and they think they have a better chance of winning.
In 1957 the Supremes ruled that a case could only be filed in the defendant's place of incorporation but a 1990 US Court of Appeals for the Federal Circuit decided that cases could be brought wherever the parties do business, which in practice means anywhere in America for anything but the smallest of companies.
TC Heartland want the original ruling reapplied – as do a whole host of firms who have filed supporting briefs. If the Supreme Court rules in its favor it would be bad news for the Delaware courts, and catastrophic for the Eastern District of Texas, which last year hosted nearly half of all patent disputes.
The Texan district hears relatively few criminal cases, due to its sparse population, but it does handle an enormous amount of civil law cases. As such, lawsuits can be heard very quickly and patent trolls have got wise to this. It helps that the district is well known for being especially friendly to IP owners.
"When patent owners can drag defendants into court in far-flung corners of the country it can cause significant harm, especially for those who are on the receiving end of a frivolous lawsuit," said Vera Ranieri, staff attorney for the EFF.
"Patent owners can pick a forum that is less inclined to grant fees, keep costs down, or stay cases. As a result, oftentimes it is cheaper to settle even a frivolous case than to fight. We’re glad to see that the Supreme Court has agreed to hear this important case that could significantly curtail some of the worst actors in the patent game." ®