East Texas Court Patent Complaints Continue to Tumble

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By Malathi Nayak

The U.S. District Court for the Eastern District of Texas in July continued to slip from its longstanding place as the top venue for patent infringement complaints, less than two months after a U.S. Supreme Court ruling limiting where patent owners can file.

A ruling from U.S. District Judge Rodney Gilstrap that took a broad view of where a company has a “regular and established” place of business failed to halt the decline. Complaints filed in the Eastern District dropped to 32, down 43 percent from June and 83 percent from the same period a year ago, Bloomberg Law data show.

Gilstrap June 23 denied computer maker Cray Inc.’s motion to transfer a lawsuit filed against it to another district, even though the company only has one work-at-home salesperson in the district. His ruling followed the May 22 Supreme Court decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC that curbed plaintiffs’ channeling of cases to courts with patentee-friendly reputations, such as the Eastern Texas court.

Seattle-based Cray, a supercomputer manufacturer, petitioned the nation’s patent appeals court, the U.S. Court of Appeals for the Federal Circuit, to overturn Gilstrap’s ruling that Cray must defend itself in the Eastern District against the infringement lawsuit brought by Waltham-Mass.-based defense contractor Raytheon Co.

Plaintiffs may have held back from filing complaints in the district because they are awaiting the outcome of Cray’s petition, Michael Risch, professor of law at Villanova University’s Charles Widger School of Law, said.

“There is a lot of uncertainty after the filing of the mandamus petition,” Risch said.

The patent venue statute specifies that a company can be sued in the district where it “resides,” or where it committed an infringing act and has a “regular and established place of business.” In TC Heartland, the high court restricted the first path by limiting “resides” to where the defendant is incorporated—not just where they make a sale.

TC Heartland Shake Out

The U.S. District Court for the District of Delaware held its rank as top venue for patent complaints for a second month in a row, receiving 68 complaints, more than double a year ago but up by only two from June. Delaware was widely expected by attorneys and academics to see a jump in filings because many companies incorporate there.

The U.S. Court for the Central District of California saw patent complaints increase by more than a third to 46 in July, compared with June. The California court saw a similar increase from the same time last year.

Overall, patent complaints filed in federal district courts totaled 312 in July, down 24 percent from the same period a year ago.

Patent-holding companies Voit Technologies LLC, Sportbrain Holdings LLC Inc, and Kaldren LLC—none of whom filed in Delaware or Texas—were July’s top three filers of patent lawsuits.

Patent challengers filed 135 inter partes review petitions contesting the validity of patents in July at the Patent and Trademark Office’s Patent Trial and Appeal Board, dropping from 195 IPR petitions filed in June. Cisco Systems Inc. topped the list of IPR filers, with nine petitions challenging telecommunications technology developers Oyster Optics LLC and Fatpipe Networks Private Ltd.'s patents on fiber optic and virtual private network technology.

Trademark and Copyright Filings Drop

July copyright infringement filings totaled 257, down 29 percent from a year ago and a decline of 13 percent from June.

Hollywood movie company Voltage Pictures’ Venice PI LLC unit was the top copyright filer, with 37 complaints filed in 13 district courts, including Hawaii and New York. It claimed illegal downloads of its “Once Upon a Time in Venice” film starring Bruce Willis, released in mid-June.

Millennium Films, which accelerated litigation in 2016 against online piracy of its movies, was another top copyright filer, with 17 complaints related to downloads of action films “Mechanic: Resurrection” and “Boyka: Undisputed.”

Trademark complaints totaled 239 in July, falling 9 percent from June and dipping slightly, around 2 percent, from the same period a year ago.

Counterfeit enforcement dominated docket activity. Sream Inc., the U.S. licensee of Roor, a German maker of water pipes for smoking, was among the top filers of trademark suits in July, alongside consumer goods manufacturer Noco Co. and auto maker Bayerische Motoren Werke AG.

To contact the reporter on this story: Malathi Nayak in Washington at mnayak@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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