Lex Machina: Delaware the new favourite for patent filing
“Delaware is the leading court for patent litigation in the year since the TC Heartland decision,” according to new research.
Legal analytics firm Lex Machina released its new data in a blog post on Friday, May 18.
Last year the US Supreme Court was asked whether 28 USC section 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by 28 USC section 1391(c), in TC Heartland v Kraft Foods.
Section 1400(b) provides that patent infringement actions “may be brought in the judicial district where the defendant resides”. Section 1391(c) deems that, where applicable, a corporate entity to reside in multiple judicial districts.
In the 8-0 ruling delivered in June 2017, the Supreme Court tightened the rules on where a patent lawsuit can be filed in a decision. It concluded that” a domestic corporation ‘resides’ only in its state of incorporation for purposes of the patent venue statute”.
One year after the decision, Lex Machina said, “there is a significant shift in where patent cases are being filed” with “many more” cases in the US District Court for the District of Delaware, but a “significant drop” in the Eastern District of Texas.
In the year before the TC Heartland decision, 36% of US patent cases were filed in the Eastern District of Texas and 12% in Delaware.
Since the decision, Delaware has received 23% of the filings, and just 13% of patent filings in the US were filed in the Eastern District of Texas, where cases filed by high volume plaintiffs were “heavily concentrated”, Lex Machina said.
The analytics firm said litigants filing more than ten cases in a year are classified as high-volume plaintiffs. The Harvard Business Review said the Eastern District of Texas had a reputation as a “patent trolling venue” before the TC Heartland decision.
Figures released by Lex Machina last year showed that the decision immediately resulted in “significantly” fewer cases being filed in Texas.
In the year before the TC Heartland verdict, 60% of filings by high-volume plaintiffs were made in the Eastern District of Texas and just 10% in Delaware.
In the last year, 26% of patent cases filed by high-volume plaintiffs were made in Delaware and just 19% were made in the Eastern District of Texas, representing a significant decrease.
Lex Machina’s research also indicated that high-volume plaintiffs are filing fewer cases across the country, rather than “clustering almost exclusively in the Texas courts”.
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