As the law stands now, patent owners have almost complete control over which federal district to file a case in. That’s a major problem. It lets patent owners exploit significant differences between courts, an advantage that the alleged infringers in patent suits don’t have. It effectively leads to outcomes being determined not by the merits of a case, but rather by the cost of litigation. Just last week, the Federal Circuit declined to fix this problem, leaving it up to Congress or the Supreme Court to act.
We recently wrote about a bill in Congress that would address the problem. The VENUE Act (S. 2733) won’t fix the patent system, but it will take away one of the patent trolls’ most valuable weapons: favorable judges with lopsided rules. Since then, the bill has gained a lot of public support. Thousands of you have written your senators urging them to pass the bill. The bill has earned the support of numerous technology companies (PDF), many of which know the cost of dealing with patent trolls firsthand.
This week, EFF joined a diverse group of civil society organizations sending a letter to Congress supporting the VENUE Act. Although these groups represent a range of perspectives, we all recognize that the current system of determining venue for patent cases is unfair.
The patent system currently suffers from a pervasive venue-shopping problem that unfairly distorts legal outcomes by allowing plaintiffs to select friendly judges in advance. According to the Mercatus Center and George Mason University, nearly half of all patent cases are filed in the U.S. District Court for the Eastern District of Texas. That’s more than 70 times the average number of patent cases heard in other federal judicial districts. According to a January 2016 report, filings in that district have “accelerated,” especially among repeat patent asserters who threaten business after business with patent lawsuits.
The incredible popularity of one district as venue for one type of lawsuit raises legitimate questions of fairness to the parties who are hauled into court there. Respected academics have identified evidence that procedures in the Eastern District of Texas unnecessarily favor plaintiffs and impose significant, unnecessary costs on companies and individuals accused of infringement, however questionable the patents and demands may be. Indeed, Kimberly A. Moore—a judge on the Federal Circuit court responsible for all patent appeals—once wrote that pervasive venue shopping in patent cases represents a failure of “the promise of equal, consistent and uniform application of justice,” besides creating “economic inefficiency in the legal system.”
These inequities cost innovative companies time, money and other resources fighting legal battles—resources that could otherwise go into creating better, more innovative, more competitive products and services. They further represent a failure to give patent litigants a fair trial, denying them access to justice and trapping them in a forum intentionally selected for its favorableness to the other side.
While we hope to see the VENUE Act pass, we shouldn’t consider it a substitute for more comprehensive patent reform. After it passes, we’ll still insist that Congress address the many ways in which patent owners can use the patent system to bully innovators.
That said, venue reform shouldn’t be put on hold until a more comprehensive patent reform bill becomes politically convenient. We can’t keep waiting while idiosyncratic, unfair procedural rules put innovators at a disadvantage. It’s time to pass the VENUE Act.
Tell the Senate to end venue abuse in patent lawsuits.
