The Supreme Court’s recent ruling on TC Heartland v. Kraft Foods tightened up patent venue rules: in essence, companies can only be sued for patent infringement in the state in which they are incorporated. The Eastern District of Texas was notoriously known as a favorite venue for patent troll litigation.
The new ruling is already being put to the test. A recent article from Ars Technica, focuses on a case between Raytheon and Cray Inc.. Raytheon filed a patent lawsuit in East Texas; Cray filed a motion for dismissal but was ruled against by US District Judge Rodney Gilstrap. Judge Gilstrap outlined a four-factor “totality of the circumstances” test to determine whether or not venue is improper: 1. Physical presence (retail store, inventory, warehouse, etc.); 2. Representation of presence in the district (through advertising, external or internal, etc.); 3. Extent that the defendant derives benefit from the district (not limited to revenue); and 4. Targeted interactions with the district (marketing, customer service, etc.).
So even with the new rules, Judge Gilstrap won’t let Cray out of the district. “Cray’s only tie to the district was a single salesperson, who worked out of his home in the Eastern District. In the judge’s view, though, that was enough to find that Cray had “regular and established” business in the Eastern District and would have to face trial,” as reported in Ars Technica.
You can read the rest of the article here.