Supreme Court Ruling Should Spell the End of Apple's Patent Troll Battles in East Texas [Updated]

[MacRumors]

The Supreme Court of the United States today decided that U.S. companies may only face patent infringement lawsuits in the jurisdiction in which they are incorporated, which in Apple's case would be California.

The decision is significant for Apple, as the iPhone maker faces several patent infringement lawsuits in a single district court in Eastern Texas that is considered friendly to patent holding entities, or so-called "patent trolls."

That very court in Tyler, Texas has, for example, ordered Apple to pay $532.9 million to patent licensing firm Smartflash LLC in 2015, and $22.1 million to Acacia Research last September for infringing upon patents it acquired from Nokia.

By limiting where patent infringement lawsuits can be filed, the Supreme Court's decision means that Apple will likely be able to battle patent infringement lawsuits in Northern California, and finally put East Texas behind it.

The Supreme Court's decision today relates to a Delaware-based lawsuit between Heartland Food Products Group and The Kraft Heinz Company, but it extends to all domestic companies across the United States.

Update: The appears to be considerable confusion throughout media coverage of this ruling. The ruling narrowly limited a company's "residence" to the place of incorporation, but patent lawsuits may still be filed anywhere "the defendant has committed acts of infringement and has a regular and established place of business." As a result, it appears patent lawsuits can still be filed against Apple in many jurisdictions, including the Eastern District of Texas.

Article Link: Supreme Court Ruling Should Spell the End of Apple's Patent Troll Battles in East Texas [Updated]

 

[cmaier]

By limiting where patent infringement lawsuits can be filed, the Supreme Court's decision means that Apple will likely be able to battle patent infringement lawsuits in Northern California, and finally put East Texas behind it.

Apple can be sued in Delaware, where it is incorporated, or anywhere else it has a regular place of business and is alleged to infringe. That would include East Texas if it has any offices or stores there.

So not just Northern California.

The fight was what "resides" means:

28 USC 1400(b):
Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

"Resides" now means "where the corporate defendant is incorporated" (e.g. Delaware). The part after the "or" hasn't changed.

Updated: ok, looks like they are incorporated in northern california, but that doesn't change the rest of my point. They can be sued LOTS of places, including possibly eastern texas.

 

[topgunn]

Looks like Judge Troll will be taking a pay cut.

 

[napabar]

HUUUUUUUUUUUUGE!

 

[doctrsnoop]

My understanding of this district is that quite the industry has sprouted up trying to curry the favor of the folks of the town.

 

[slprescott]

Apple can be sued in Delaware, where it is incorporated, or anywhere else it has a regular place of business and is alleged to infringe. That would include East Texas if it has any offices or stores there.

Tomorrow's news:
"Apple announces plans to close all stores in east Texas."

 

[t76turbo]

This sounds like a very good change...

 

[cmaier]

My understanding of this district is that quite the industry has sprouted up trying to curry the favor of the folks of the town.

One time I went to Tyler, Texas, and Samsung was throwing some sort of party for the locals in the square in front of the federal courthouse.

 

[slimothy]

Apple can be sued in Delaware, where it is incorporated, or anywhere else it has a regular place of business and is alleged to infringe. That would include East Texas if it has any offices or stores there.

So not just Northern California.

The fight was what "resides" means:

28 USC 1400(b):
Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

"Resides" now means "where the corporate defendant is incorporated" (e.g. Delaware). The part after the "or" hasn't changed.

Looks like MacRumors might want to update their article..... actually delete it, since this defeats the whole purpose of MR post lol.

 

[69Mustang]

This is a definite step in the right direction. I wonder if it means the other two favorite "lawsuit districts" will see an uptick in activity. NorCal and Delaware are the other two districts I'm referencing.

Edit: cmaier added the other culprits as well. We gotta start somewhere.

 

[cmaier]

This is a definite step in the right direction. I wonder if it means the other two favorite "lawsuit districts" will see an uptick in activity. NorCal and Delaware are the other two districts.

E.D.Va. and E.D.Tex should see volume go way down. NDCal, CDCal, Delaware, and possible ND.Ill should go up.

 

[dmdev]

As an app developer, and a patent inventor, I welcome this change.

 

[AppleMad98004]

Technically they can be sued in any jurisdiction where they do business. So if there is an Apple store, say in Oregon, they are doing business there and could be sued in Oregon state.

 

[Whimseh]

A crappy little town in Texas ordered them to pay money?? LMAO! I wouldn't pay a dime!

(Ex-Texan, I'm allowed to say these things)

 

[WildCowboy]

Apple can be sued in Delaware, where it is incorporated, or anywhere else it has a regular place of business and is alleged to infringe. That would include East Texas if it has any offices or stores there.

So not just Northern California.

The fight was what "resides" means:

28 USC 1400(b):
Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

"Resides" now means "where the corporate defendant is incorporated" (e.g. Delaware). The part after the "or" hasn't changed.

Looking into this right now, but what I can say is that Apple is indeed incorporated in California, not Delaware.

Wall Street Journal is also saying that "claims of patent infringement must be brought in the state where a corporate defendant is incorporated."

 

[wizard]

This is one poor article.

In any event i dont see Apple gaining much benefit here. Most of their lost cases have been pretty clear cut cases of infringment. They would not win in most jurisdictions.

 

[cmaier]

This is a definite step in the right direction. I wonder if it means the other two favorite "lawsuit districts" will see an uptick in activity. NorCal and Delaware are the other two districts I'm referencing.

Edit: cmaier added the other culprits as well. We gotta start somewhere.

The good news (if you aren't a patent plaintiff) is that E.D.Tex. is notoriously friendly to the patent-holders. The way the procedures are set up make it hard to defend a lawsuit there, the juries tend to find infringement, and tend to award huge dollar figures. N.D.Cal, for example, tends to be favorable to defendants.

 

[tennisproha]

As an app developer, and a patent inventor, I welcome this change.

You invented the patent itself?

Cool story bro.

 

[cmaier]

Looking into this right now, but what I can say is that Apple is indeed incorporated in California, not Delaware.

Wall Street Journal is also saying that "claims of patent infringement must be brought in the state where a corporate defendant is incorporated."

This article says Apple is incorporated in Delaware? http://www.nytimes.com/2012/07/01/business/how-delaware-thrives-as-a-corporate-tax-haven.html

The language the WSJ uses is unfortunate, because it ignores that they are referring to the part of the thing before the "or."

 

[Carnegie]

Looking into this right now, but what I can say is that Apple is indeed incorporated in California, not Delaware.

Wall Street Journal is also saying that "claims of patent infringement must be brought in the state where a corporate defendant is incorporated."

Cmaeir is correct with regard to what this decision means. I started to post to make substantially the same point but saw that they had already made it.

The patent venue statute provides two possibilities for where an action may be brought. This decision only relates to the first one, the one based on the defendant's residence.

 

[macsba]

Yes!

 

[Gasu E.]

Apple can be sued in Delaware, where it is incorporated, or anywhere else it has a regular place of business and is alleged to infringe. That would include East Texas if it has any offices or stores there.

But, the exact wording is "...or where the defendant has committed acts of infringement AND has a regular and established place of business. " To use a store to meet that requirement would mean that the infringement would have had to take place at the store. Since the only things that transpire at the store are sales and service, if those were infringing acts, than any business that sold and serviced the offending product would be equally liable. That means Best Buy could be sued for patent infringement on the same basis as Apple.

It would seem to me that infringing acts required to qualify a non-HQ site would only entail acts to incorporate the offending technology, such as manufacturing and design.

 

[cmaier]

Looking into this right now, but what I can say is that Apple is indeed incorporated in California, not Delaware.

Wall Street Journal is also saying that "claims of patent infringement must be brought in the state where a corporate defendant is incorporated."

The case is clearly referring to the "resides" prong.
"Held: as applied to domestic corporations, "residence" in 1400(b) refers only to the State of incorporation."

 

[Gasu E.]

Cmaeir is correct with regard to what this decision means. I started to post to make substantially the same point but saw that they had already made it.

The patent venue statute provides two possibilities for where an action may be brought. This decision only relates to the first one, the one based on the defendant's residence.

What is the "act of infringement" at an Apple store?

 

[Munky]

Tomorrow's news:
"Apple announces plans to close all stores in east Texas."

I was just in tyler this weekend. there is no Apple store there. That place is awful.