Law Professors Urge Congress to Take Up Patent Venue Reform

The Eastern District of Texas has been the staging ground for thousands of patent battles every year, and there’s a reason for that.

As it now stands, the majority of U.S. patent cases take place in just a few courts across the country, the aforementioned Texas district being the most popular. That’s because of local procedural rules and practices that attract plaintiffs. But now, a group of 45 law professors is urging the House of Representatives to step in and make a change.

In a letter to Congress, published on PatentlyO, this group of professors explained why plaintiffs are attracted to these courts.

“For example,” they wrote. “The [Eastern District of Texas] requires parties seeking summary judgment in patent cases to first seek permission before filing any summary judgment motion, the effect of which is to delay and deter early resolution of cases.”

And because of these plaintiff-favorable rules, that specific court sees the majority of all patent cases filed in this country.

“As a result of current venue rules, though there are 94 federal judicial districts, a single district is home to nearly half of all patent cases,” the letter read. “Of the 5,819 patent cases filed in 2015, nearly half— 2,541 cases—were filed in the Eastern District of Texas, and 95 percent of those cases were filed by non-practicing entities (NPEs). And the Eastern District of Texas’s percentage of patent cases has been steadily increasing over the last several years, rising from 11 percent in 2008 to 44 percent in 2015. By comparison, the Northern District of California, home of Silicon Valley, saw only 228 patent cases filed in 2015.”

The professors write that this concentration leads to a high decision reversal rate, with only 39 percent of decisions from the Eastern District in 2015 upheld by The United States Court of Appeals for the Federal Circuit.

It’s a huge problem, and reforming it is undoubtedly one of the top priorities for making the U.S. patent system work more effectively. As it stands, non-practicing entities (NPE) know they have a huge advantage in these districts, and bring their action because they know they are likely to receive favorable treatment. The rules encourage litigation, which in turn, makes it far more difficult for companies to focus on their core competency and bring new, innovative products to market.

It remains to be seen whether this group will have any luck getting Congress to act on their behalf, though it is encouraging that Presidential hopeful Hillary Clinton recently endorsed the issue. But finally having venue reform spring to the forefront of the argument is certainly a step in the right direction.