Ghost Town – How the Eastern District of Texas May Shutter Up Its Patent Litigation Docket
Almost 30% of patent infringement lawsuits from 2014 were filed in one district – the Eastern District of Texas (EDTX) – with 20% of the total cases going to District Judge Rodney Gilstrap. Known for its plaintiff-friendly jury pool and large awards to Non-Practicing Entities, the EDTX has encouraged litigants from throughout the country to seek venue there on the most attenuated of grounds. With recent moves in the United States House of Representatives, however, change may be on the horizon. The House Judiciary Committee voted 24-8 to move the marked-up Innovation Act to the floor, with the final version including Congressman (and Committee Chairman) Bob Goodlatte’s (R-VA) “Manager’s Amendment.” This amendment, strongly debated prior to its voice vote passage, places limitations on venue for patent infringement and declaratory judgment actions. Domestic plaintiffs in these types of actions would only have proper venue in the following districts:
(1) where the defendant has its principal place of business or is incorporated;
(2) where the defendant has committed an act of infringement of a patent in suit and has a regular and established physical facility;
(3) where the defendant has agreed or consented to be sued;
(4) where the invention claimed in a patent in suit was conceived or actually reduced to practice;
(5) where significant research and development of an invention claimed in a patent in suit occurred at a regular and established physical facility;
(6) where a party has a regular and established physical facility that such party controls and operates and has:
(A) engaged in management of significant research and development of an invention claimed in a patent in suit;
(B) manufactured a product that embodies an invention claimed in a patent in suit; or
(C) implemented a manufacturing process that embodies an invention claimed in a patent in suit.
If eventually signed, this law would substantially curtail the ability to maintain suit in the EDTX, undercutting plaintiffs’ ability to argue for venue on the mere presence of an entity office. Note, however, that the Senate Judiciary Committee version of the bill does not include this language, so look for interesting debate both on the floor and in conference.
Sources: http://www.law360.com/articles/667339/house-bill-would-shut-down-eastern-texas-patent-docket https://www.congress.gov/bill/114th-congress/house-bill/9 http://judiciary.house.gov/index.cfm/hearings?Id=2848E2C2-F705-4A03-800C-64930626A395&Statement_id=CF3D1F76-9219-4E6C-9B28-692BD6206E21 http://judiciary.house.gov/_cache/files/57d3eba8-347d-439b-adb8-b384210312eb/goodla-028-xml---managers-substitute---june-9-2015.pdf
For more information on this topic, please visit our Patent Litigation service page, which is part of our IP Litigation practice.
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