It’s Time for the Federal Circuit to Shut Down The Eastern District of Texas

One of the biggest reasons the Eastern District of Texas hears so many patent cases (at last check, almost half of all cases filed this year were filed in the Eastern District) is because of a Federal Circuit case from 1990—VE Holding—that radically expanded the places patent owners could sue for infringement.

Today, EFF, Public Knowledge, and Engine Advocacy asked the Federal Circuit to consider our amicus brief in a case called In re TC Heartland that seeks to see VE Holding relegated to a footnote in history. As we explain in our proposed amicus brief, VE Holding has allowed patent owners to sue in practically any district in the country, no matter how tenuous the connection to the alleged infringement. In turn, this has given rise to “forum selling,” a phenomenon described in a recent paper [PDF] by the same name.

“Forum selling” is what we see in the Eastern District of Texas. Namely, judges there have adopted rules that tend to favor patent owners. As we’ve noted on several occasions, the Eastern District rules allow patent owners with dubious claims and weak patents to more easily leverage the cost of litigation in order to get settlements they don’t deserve. 

This is causing significant harm to those who are on the receiving end of a frivolous lawsuit. Oftentimes it is cheaper to settle even a frivolous case than to fight in hopes you may be able to recover some of your attorneys’ fees at the end. This is unfortunately especially true in the Eastern District. It was recently reported that in the four years that Judge Gilstrap has been on the bench, he has never granted a fees motion (as the article points out, he’s currently considering at least one now, but it hasn’t been ruled on yet).  Given that Judge Gilstrap currently has over 1000 patent cases in front of him (per a recent search of data from Docket Navigator), that statistic is remarkable.

We hope the Federal Circuit takes the opportunity In re TC Heartland presents to reexamine its law. The judicial system should strive to see patent cases decided on their merits, not based on the costs imposed by procedural rules in distant and inconvenient forums.