“By ignoring venue restrictions, courts like the Eastern District of Texas have turned into havens for patent trolls. Forty percent of all patent-infringement suits were filed there last year. The Supreme Court can put a stop to forum shopping by properly enforcing rules governing patent venue and personal jurisdiction.”
—Richard Samp, WLF Chief Counsel
WASHINGTON, DC—The U.S. Supreme Court this afternoon agreed to review a Federal Circuit decision that construes federal venue statutes so broadly that many nationwide businesses would be subject to suit in virtually any federal district court. The High Court’s order in TC Heartland v. Kraft Foods was a victory for Washington Legal Foundation (WLF), which filed a brief urging the Court to grant review and overturn the decision below. WLF argued that the decision essentially ignored the Supreme Court’s longstanding recognition of strict statutory limits on venue in patent cases. It raises serious due process concerns and encourages rampant forum shopping by “patent trolls,” entities that file numerous, inappropriate patent-infringement cases. The Supreme Court is likely to hear oral arguments in the case in March 2017.
Twenty years ago, the Federal Circuit adopted rules that permit patent owners to file suit in virtually any federal district court in the country. As a result, patent trolls that buy up old patents for the purpose of extorting licensing fees via nuisance lawsuits (rather than using the patented invention) have gravitated to the few districts where they receive a friendly hearing. WLF’s brief argued that rules governing venue and personal jurisdiction generally require a patent owner to file a patent-infringement lawsuit in a State where infringement has occurred and in which the alleged infringer maintains a regular and established place of business. WLF urged the Court to overturn Federal Circuit precedents that have created this forum-shopping problem. Its brief contended those precedents are a relic of an earlier era when federal courts were less willing to enforce constitutional limits on courts’ exercise of jurisdiction over nonresident defendants.
After the Court’s ruling, WLF issued the following statement by Chief Counsel Richard Samp: “By ignoring venue restrictions, courts like the Eastern District of Texas have turned into havens for patent trolls. Forty percent of all patent-infringement suits were filed there last year. The Supreme Court can put a stop to forum shopping by properly enforcing rules governing patent venue and personal jurisdiction in this case.”
WLF is a national, public-interest law firm and policy center that seeks to ensure that excessive or abusive litigation does not trample property rights or otherwise impede economic liberty.