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25 February 2019Patents

Apple closes stores in Texas jurisdiction popular with NPEs

Apple has confirmed that it will close two of its stores in the Eastern District of Texas, a move which reportedly will better protect the company against patent litigation.

On Friday, February 22, the technology company said it will close its Apple Stonebriar and Willow Blend stores, both located in the Eastern District of Texas jurisdiction.

In a statement, Apple said that it will be opening a new store in a Dallas shopping mall in April this year. As a result, it has decided to consolidate its stores and close Stonebriar and Willow Blend.

Although the new store will not be very far from the Stonebriar and Willow Blend stores, it will be located within the jurisdiction of the US District Court for the Northern District of Texas.

While Apple did not say the closures were part of a move to better protect itself from patent litigation, the Eastern District of Texas has gained notoriety as a hotbed for patent suits.

Jonathan Markham, a partner at Beck Greener in London, said the move "certainly appears to be intended to shield Apple from the risk of patent lawsuits being brought in the Eastern District of Texas".

According to a 2011  report by IP lawyers Jay Chung and Andrei Iancu, the proportion of patent cases going to trial in the Eastern District of Texas at the time was among the highest in the country.

The report said that Judge John Ward, who had the most patent cases among the judges in Texas, had expressed a preference to deny summary judgment and let the jury decide cases.

Markham said the jurisidicton has been notorious "as a fast and patentee-friendly place to bring cases".

But, in 2017, the Supreme Court ruled in TC Heartland v Kraft Food that patent holders suing corporations must file complaints in districts where the company is incorporated or has an established place of business. This ruling limited the practice of plaintiffs being able to choose courts which they believed were favourable to them, known as forum shopping.

"By moving its business out of the Eastern District, Apple is essentially forcing patent holders to use a less favourable district to bring lawsuits, effectively increasing Apple’s chances of defending itself against such suits," Markham added.

The two stores are expected to permanently close on Friday, April 12, with the new one to open on April 13.

In its statement, Apple said all employees from the affected stores will be offered positions at the new Dallas store or other Apple location.

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