Patent trolls have had it pretty sweet so far, but no more. The U.S. Supreme Court issued a new ruling for patent litigation, dealing a hard blow to trolls.
So far, a three-decade old legal standard made things easy for patent trolls by allowing patent holders to file lawsuits in nearly any jurisdiction in the United States.
An east Texas federal district, for instance, has been among the favorite venues for patent trolls. In fact, a whopping 30 percent of all patent cases from the past few years have been in Texas.
U.S. Supreme Court Limits Patent Trolls
The term patent trolls refers to individuals or companies that hold patents with one sole or main purpose in mind: sue other companies to obtain financial awards. Since so far they've been able to file suit in nearly any jurisdiction, patent trolls had little holding them back from trying to obtain large sums of money from other companies.
With the latest ruling from the U.S. Supreme Court, patent trolls just lost their advantage of filing patent infringement lawsuits in places where they typically favor the plaintiff.
Where To File Patent Litigation
The U.S. Supreme Court unanimously decided [PDF] that patent holders can only sue companies for patent infringement where they reside, or where they have an established and regular place of business. This essentially means that the days when patent trolls could file suit virtually anywhere are over. This deals a heavy blow to companies that hold patents just for this purpose.
Following this major ruling, many patent infringement cases will likely unfold in California and Massachusetts, which serve as massive tech hubs, as well as Delaware, which is home for many companies.
Apple, Google, Microsoft, Samsung and other heavyweight technology companies are often tangled in patent disputes, but this ruling is not for them specifically. In fact, the U.S. Supreme Court issued this ruling in a case completely unrelated to technology companies. The case was between food and beverage company Kraft Heinz Co. and beverage flavoring firm TC Heartland LLC.
Big Win For Technology Companies
Nevertheless, the decision to limit where patent trolls can bring patent infringement lawsuits will be a big win for technology companies as well. Tech firms have been particularly loud in requesting a change in legislation to curb patent litigation, including by limiting where they can be filed, but recent Congress efforts were not that successful.
As the Wall Street Journal points out, companies will not only be able to defend themselves better on their home turf, but the patent infringement cases would also take longer to process, which could further discourage patent trolls.
At the same time, limiting patent infringement lawsuits to where the defendant company resides or has its established place of business would likely make it harder for trolls to score hefty settlements from the businesses they sue, and easier for the cases to get dismissed.
This could lead to a great change in how successful patent trolls manage to be in their endeavors, and how companies are able to defend themselves in patent litigations.
