U.S. high court ruling deals blow to patent trolls

Intellectual Property

U.S. high court ruling deals blow to patent trolls

The Supreme Court is making it easier for companies to defend themselves against patent infringement lawsuits.

The justices ruled unanimously on Monday that such lawsuits can be filed only in states where defendants are incorporated. The issue is important to many companies that complained about patent owners choosing more favorable courts in other parts of the country to file lawsuits.

The case involved an appeal from TC Heartland, an Indiana-based food sweetener company sued by Kraft Foods in Delaware. Lower courts refused to transfer the case to Indiana.

But the Supreme Court’s ruling will have the biggest impact on federal courts in eastern Texas, where more than 40 percent of patent lawsuits are now filed. Local rules there favor quick trials and juries tend to be more sympathetic to plaintiffs.

The ruling will have a major effect on lawsuits from so-called patent trolls — companies that buy up patents and force businesses to pay license fees or face expensive litigation. Many of those cases now may have a tougher time getting to trial or result in jury verdicts that are less generous.

Companies including eBay, Kickstarter and online crafts site Etsy had urged the high court to restrict where such cases can be filed, saying they have been sued repeatedly in courts hundreds or thousands of miles away from corporate headquarters. Even Texas Attorney General Scott Keller led a coalition of 17 states calling for an end to so-called “forum shopping” in patent cases.

Groups representing inventors and patent owners said new restrictions would place burdens on patent holders and encourage infringing behavior and piracy.

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