Supreme Court Just Killed Marshall Texas Patent Troll Business

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A patent battle over flavored water may turn into a win for iPhone and Mac maker Apple, and a big loss for patent trolls. Thanks to a U.S. Supreme Court ruling on Monday, patent infringement cases must be filed in the jurisdiction where the offending company is incorporated, which will greatly limit the court choices open to patent trolls.

Supreme Court says patent holders have to file infringement cases where the plaintiff is incorporated

Supreme Court ruling limits where patent infringement lawsuits can be filed

Patent trolls have spent the last 27 years shopping around for sympathetic courts, which led to a booming business in Eastern Texas. Non-practicing patent holders, or patent trolls, have been filing cases in Federal court there for years because odds are much higher they’ll win their cases.

Thanks to the court’s rules and sympathetic juries, patent infringement cases are big business in Marshall, Texas. 40 percent of the patent infringement cases are filed in the town, but that’s about to change, and the trolls can blame Heartland and Kraft.

Kraft filed a patent infringement lawsuit in Delaware against Heartland over water flavorings. Heartland’s request to move the case to Indiana where it’s based was denied despite the fact that it doesn’t have a presence in Delaware, according to Reuters. That eventually took the case to the Supreme Court and today’s ruling.

According to the Supreme Court ruling, patent infringement cases must be filed where the defendant is incorporated.

While Apple makes computers and smartphones instead of juice, the ruling could still have a big impact. The long list of patent trolls the company has tangled with over the years tend to file their cases in Eastern Texas where Apple doesn’t have a presence, and now those cases will have to be filed in Delaware. Apple’s headquarters are in Cupertino, but the company is incorporated in Delaware for tax purposes.

Apple isn’t the only big company to incorporate in Delaware. Google, Coca-Cola, Ford, Facebook, Amazon, Kraft, and thousands of other companies have done the same to take advantage of the state’s tax laws. That’s were patent trolls will have to head now, and the Federal Court in that district isn’t as kind to them.

That also means Marshall’s thriving patent litigation industry is about to dry up, and most of the jobs it created will go away. For Delaware’s Federal District Court, the dockets may start filling up with the cases that otherwise would’ve gone to Texas—assuming the patent trolls think they have a fighting chance.

Regardless, it looks like Marshall, Texas, is about to get a lot quieter and big tech companies like Apple and Google may see fewer frivolous patent lawsuits.

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wab95Jeff Gametgeoduck Recent comment authors

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wab95
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wab95

Jeff:

This is terrible news. What’s a bonafide patent troll supposed to do? Get a real job? Start a legitimate, profit-making business? Where’s your humanity, man?!!

There may still be hope for the trollers. Perhaps Marshall will secede from Texas and petition to have itself declared part of Delaware.

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jhorvatic

Great news for real companies with real products. Long overdue to have this finally done.

geoduck
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geoduck

According to the Supreme Court ruling, patent infringement cases must be filed where the plaintiff is incorporated

Wouldent that be defendant is incorporated? Or am I misreading this.

Either way this is fantastic news.