Yesterday, the U.S. Supreme Court issued an 8-0 decision in TC Heartland LLC v. Kraft Foods Group Brands LLC that should put an end to “patent trolls” filing lawsuits in “friendly” venues of their choosing.
Patent trolls are individuals and companies that profit from suing over patents, instead of using their patents to make products. Trolls consistently file lawsuits in the most plaintiff/troll-friendly courts they can find, such as the rural Eastern District of Texas. The Supreme Court’s decision could save the companies targeted by patent trolls millions of dollars per year in fees spent litigating patent disputes in jurisdictions that are far away from where those companies are headquartered or incorporated.
In rendering its decision, the Supreme Court construed the word “resides” in 28 U.S.C. § 1400(b), the venue statute for patent lawsuits, to require plaintiffs to file patent claims in the state where the defendant is incorporated. Before Kraft, patent trolls were able to file lawsuits wherever the defendant could be subject to personal jurisdiction, which effectively allowed trolls to subject companies to the jurisdiction of courts in states where they merely sold a minimal number of products.
Now that patent trolls are required to sue companies in less friendly jurisdictions, oftentimes where the companies are located and their employees live, they may think twice before filing a lawsuit.