House Judiciary Chairman Calls Out U.S. Judge in Texas on Venue

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By Malathi Nayak

House Judiciary Chairman Robert W. Goodlatte July 13 blasted a Texas federal district judge’s recent ruling on venue in a patent infringement case as contrary to a U.S. Supreme Court ruling.

The high court’s May 22 ruling in TC Heartland LLC v. Kraft Foods Grp Brands LLC “was expected to lead to a sharp reduction in cases being filed in one particular district in Texas that seems skilled at attracting patent trolls,” Goodlatte (R-Va.) said at a Judiciary subcommittee hearing on the effect of poor-quality patents on U.S. businesses. Goodlatte said U.S. District Judge Rodney Gilstrap of the Eastern District of Texas “has already re-interpreted both the law and the unanimous Supreme Court decision to keep as many patent cases as possible in his district in defiance of the Supreme Court and congressional intent.”Gilstrap June 29 denied computer maker Cray Inc.’s motion to transfer a lawsuit filed against it in the Eastern District of Texas to another district, even though the company doesn’t have an office in the Gilstrap’s district.

House Judiciary Courts, Intellectual Property and the Internet Subcommittee Chairman Darrell Issa (R-Calif.) joined Goodlatte in criticizing Gilstrap’s ruling. The East Texas judge’s ruling “does not serve justice and is, in fact, an act that I find reprehensible,” Issa said.

The lawmakers’ response to Gilstrap’s ruling comes as they weigh the need to propose additional legislation, including patent-venue rules, in the wake of recent Supreme Court decisions on patent litigation.

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,” according to the patent-venue statute. The Supreme Court’s TC Heartland ruling restricted the first path by limiting “resides” to where the defendant is incorporated—not just where they make a sale.

Congress could define what constitutes a ‘regular and established place of business,’ Paul R. Michel, former chief judge of U.S. Court of Appeals for the Federal Circuit, who testified at the hearing, said when asked for recommendations on how to stem venue abuse.

“That would add great clarity and could adjust where cases go,” Michel said.

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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