Carmel-based company wins patent case at US Supreme Court

by Ben Pena May 24, 2017, 5:31
Carmel-based company wins patent case at US Supreme Court

"The consequences of the Supreme Court's action can not be understated", Duston said in a statement. As Idaho's explosive growth continues, its businesses-which are becoming increasingly linked to high technology fields such as computers, semiconductors, software, and Internet technologies-are growing with it, and will be increasingly exposed to the patent infringement disputes that are routinely faced by more established entities in California, Texas, New York, and elsewhere.

In a decision that upends 27 years of law governing patent infringement cases, the justices sided with beverage flavoring company TC Heartland LLC in its legal battle with food and beverage company Kraft Heinz Co. Because of confusion about where the suit belongs, however, the merits of this case have gone untested.

The Supreme Court on Monday unanimously ruled that patent infringement suits can only be filed in the judicial district where the alleged patent infringer is incorporated. "Less than 10 percent of the cases in Marshall are criminal cases, which is very unusual for a district court, and that is why the patent docket started here 23 years ago". "We hold that a domestic corporation "resides" only in its state of incorporation" for the purposes of a patent case venue. TC Heartland petitioned the Federal Circuit for a writ of mandamus to either dismiss or transfer the case, which it denied.

"Under the general venue statute a potential plaintiff would ordinarily have a much larger choice of geographic locations in which to bring a lawsuit", he said.

The case is called TC Heartland v. Kraft Foods.

On Monday, the Supreme Court agreed with Heartland.

"The current version of §1391 does not contain any indication that Congress meant to alter the meaning of §1400 (b) as interpreted in Fourco", he wrote. Thus, in VE Holding Corp. v. Johnson Gas Appliance Co.

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"If anything, the 2011 amendments [to Section 1391] undermine that decision's rationale", the opinion states. "Such companies have often sued in remote federal courts that have a reputation for friendliness to plaintiffs".

A group of 41 companies and seven associations - including Adobe, HP, NetApp, Oracle, Red Hat, and SAP - filed a brief together, stating they are "all too familiar with the effects of forum shopping in patent cases".

The focus may now fall on the second part of the statute concerning where a defendant has a "regular and established place of business" and this leaves some room for uncertainty.

In its ruling, the Supreme Court stated it was upholding one of its earlier patent decision from 1957 known as Fourco.

Under the ruling, businesses only reside in the state in which they were incorporated. The U.S. Supreme Court issued a new ruling for patent litigation, dealing a hard blow to trolls. "This decision is likely to reverse that trend". He said it may lead to a surge in patent cases in DE, where many companies are incorporated due to favorable state law. Indeed, in 2016, an astounding 20 percent of all patent infringement cases pending nationwide were reported to have been assigned to a single judge located in Marshall, Texas: Judge Rodney Gilstrap.

The Texas district has historically tended to favor patent holders, becoming a popular venue for patent lawsuits as a result.

"Today's decision will help return order to patent litigation, end the abusive forum-shopping practices we've seen in recent years, and reduce the ability of patent trolls to extort settlements from actual innovators on the basis of frivolous claims". That case involved Apple's slide-to-unlock, autocorrect and quick links patents.


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