Richard Lloyd

As anyone involved in the US patent reform debate will tell you, new legislation is stalled in the Congress. It’s not completely out of the question that a bill will make it all the way to the President’s desk during 2016, but in an election year and with a very tricky Supreme Court nomination to consider (or not as the case may be), it hardly features high up on most legislators’ to-do lists.

But as Congress waits, the Court of Appeals for the Federal Circuit (CAFC) is set to tackle one of the most controversial aspects of patent infringement cases in the US - the thorny topic of venue shopping. Almost all sides of the reform debate can agree that it is not healthy in any legal system for a disproportionately large number of cases in any field to be heard by just one court and for one judge to hear so many. Last year, according to Lex Machina, 2,540 patent cases were filed in the Eastern District of Texas - 43.6% of the total suits brought in the US. Of those, 1,686 were filed with Judge Rodney Gilstrap. Regardless of Judge Gilstrap’s judicial skills, that lack of plurality does not paint the US patent system in a good light. 

The CAFC case - In Re: TC Heartland LLC – which will be heard later this week, will challenge the flexibility that patent plaintiffs have enjoyed for the last 25 years in picking where they file a lawsuit. Should the Federal Circuit judges look to tighten up that flexibility the ramifications for the US patent system will be considerable; and the courts will have addressed another key tenet of patent reform.

That would follow the Supreme Court addressing fee-shifting in the Octane and Highmark cases in 2014 and the Judicial Conference changes to the standards for pleading in patent cases last December. When you also consider that America’s highest court is due to address the use of broadest reasonable interpretation by the Patent Trial and Appeal Board (PTAB) in post-issuance reviews, then the case for the kind of broad package of reforms proposed in the Innovation Act must surely become harder to make. As with the America Invents Act, the courts can play a vital role in steering legislators towards consensus in a bitterly divided reform debate.

However, Congress is not completely out of the picture. Senators Flake and Gardner are this week expected to introduce the “Venue equity and non-uniformity elimination act of 2016”.  As with the TC Heartland case that bill would also restrict a patent owner’s options on choosing in which district to bring an infringement suit.

Of course, if the CAFC or Congress does severely stymie patent plaintiffs’ ability to bring cases in East Texas we might finally see whether patent owners flocked there not because the courts gave them such an easy hearing, but because it’s the only place in which they have been able to get a fair hearing.