The US Supreme Court on Monday tightened rules for where patent lawsuits can be filed as it ruled that patent infringement suits can be filed only in courts located in the jurisdiction where the targeted company is incorporated.
The decision could make it harder for so-called patent “trolls” to launch patent cases in “friendly” courts, a trend that has become a major nuisance for big tech companies.
The justices sided 8-0 with Indiana-based beverage flavoring company TC Heartland LLC which argued that a unit of Kraft Heinz should not be allowed to sue it in Delaware.
Monday’s ruling overturned a ruling last year by the US Court of Appeals for the Federal Circuit that said patent suits were fair game anywhere a defendant company’s products were sold.
The ruling could now reduce the high volume of patent litigation filed in a single federal court district in East Texas because of its reputation for having juries and rules that side with plaintiffs that bring infringement suits.
Roughly 40% of all patent lawsuits are filed in East Texas, and about 90% of those are brought by “patent trolls” according to a study published in a Stanford Law School journal.
Heartland Food Products Group (Heartland FPG) welcomed the Supreme Court’s decision.
“For decades, U.S. businesses have been unfairly required to defend patent suits in far off locales adding cost, complexity, and risk to the litigation process,” said Ted Gelov, Heartland FPG CEO.
“The Supreme Court’s decision changes that system for the better.”
Heartland general counsel Bill O’Connor said: “Heartland is proud to have contributed to the Supreme Court’s evaluation of this landmark decision.
“This decision will limit venue-shopping in patent litigation and facilitate an equitable litigation landscape in the U.S.”