The federal Eastern District of Texas is a haven for patent trolls
The U.S. District Court for the Eastern District of Texas is the federal judicial district that covers 43 counties in eastern Texas. It is known as a friendly venue for patent litigation. As a result, it ranks as one of the most popular judicial districts for patent lawsuits - and patent troll lawsuits are frequently filed there.
According to Lex Machina, a legal analytics company, the Eastern District of Texas had 1,495 new patent cases in 2013, up 20 percent from 2012. That makes it the district with the most new patent cases in 2013. The second most popular is the District of Delaware, which had 1,336 new patent filings. Many businesses are registered in Delaware. Coming in third was the Central District of California, with 399 new filings.
Why is eastern Texas a popular venue for patent filings? The 2013 Patent Litigation Study by PriceWaterhouseCooper LLC sheds some light. According to the study, eastern Texas is among a handful of jurisdictions that are considered favorable to plaintiffs in patent litigation. Compared with other districts, they have shorter waits for trial (sometimes called "rocket dockets"), higher success rates and greater awards for damages.
In fact, the Eastern District leads the nation in the total amount of compensatory damages awarded in patent litigation cases. Compensatory damages, which compensate a wronged party for losses suffered, are challenging to obtain in patent litigation cases. Texas Lawyer, citing Lex Machina, reported that the Eastern District of Texas awarded $5 billion in 84 cases over 14 years of legal filings. Nationally, just $13 billion in compensatory damages were awarded in patent infringement cases.
Because of these factors, the district is popular with patent trolls, which are entities that hold or enforce patent rights so that they can collect license fees, but they do not actually manufacture or provide services based on those patents. They're also called nonpracticing entities.
The U.S. Supreme Court has recently issued two opinions that are helpful in defending against patent trolls. (In July, we blogged about Alice Corp. v. CLS Bank International.) Our law firm has been effective in defending clients against patent trolls based upon these Supreme Court holdings and other court decisions.
We represent clients in patent litigation matters throughout Texas and the United States, including the Eastern District. To learn more, see our page on intellectual property litigation.