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Why patent trolls go to East Texas, explained

Motions to kill abstract patents have 71% win rate nationwide, 27% in ED Tex.

Recent changes to patent law have made it easier to beat patent trolls, but it hasn't made the patent hotspot of East Texas any quieter. In fact, it's been in the news more. Massive numbers of patent troll suits continue to be filed there, and the judge who hears most of them has erected barriers to defendants seeking to have their cases disposed of early.

Numbers published yesterday by the Electronic Frontier Foundation show just how bad the problem has gotten. In a "deep dive" blog post making the argument for venue reform, EFF lawyer Daniel Nazer notes that 1,387 cases were filed in E.D. Texas in the first half of 2015. That's 44.4 percent of all patent cases in the nation, and the filings in East Texas are mostly by so-called "patent trolls," which have no business other than licensing patents.

The attraction of East Texas is a combination of factors, which includes not just the perception of large jury awards for plaintiffs but things like discovery rules that are tough on defendants. One big factor is the reluctance of judges to grant summary judgment awards—and that's especially important after last year's landmark Alice v. CLS Bank case, which has resulted in more than 200 judicial orders kicking out "do it on a computer"-style patents.

Nazer's post publishes data from Docket Navigator that shows how the Eastern District of Texas judges often reach different conclusions when patents are challenged under Alice. Here are the results for patents challenged under 35 USC § 101, the law banning overly abstract patents, so far this year:

  • Nationwide: 71% granted or partially granted; 29% denied (76 decisions)
  • Northern District of California: 82% granted or partially granted; 18% denied (11 decisions)
  • District of Delaware: 90% granted or partially granted; 10% denied (10 decisions)
  • Eastern District of Texas: 27% granted; 73% denied (11 decisions)

"While each challenged patent claim is different, the overall trend suggests judges in the Eastern District of Texas are applying Alice in a way that is far more favorable to patent owners," Nazer writes. The Eastern District also delays rulings on motions to transfer, causing legal bills to run up on "an expensive case in a remote forum, while the judge sits on the motion."

The House Judiciary Committee has amended the patent reform bill currently under debate to add changes that would tighten up venue rules. But with Congress on break for the summer without having the Innovation Act, it's not clear whether any reforms will pass.

 

Channel Ars Technica