The Eastern District of Texas, which in 2011 appeared to be losing its luster as the preferred U.S. district court venue for patent suits, regained its prominence in 2012, usurping the District of Delaware for the No. 1 spot, according to a new analysis by Perkins Coie partner James Pistorino.
EDTX saw 1,266 new patent cases filed in 2012 — more than triple the 418 suits it saw in 2011. At least some of this tremendous rise is attributable to changes brought about by the America Invents Act, the patent reform legislation that took effect in September 2011.
The number of patent suits filed in the District of Delaware also rose significantly, as did the total number of patent cases filed in all U.S. district courts in 2012, Pistorino’s research shows. A partner in Perkins Coie’s patent litigation practice, he has tracked patent cases for the past few years.
The Eastern District of Texas’s resurgence to the No. 1 spot is notable because some patent attorneys had wondered whether it was falling out of favor. The district, which includes federal courts in the cities of Beaumont, Marshall and Tyler, has been a favored venue for several years in part because of its reputation as a “rocket docket” and also because it’s perceived as a place where juries favor plaintiffs. In addition, plaintiffs’ attorneys liked being able to predict with some accuracy which judges would get a case because only a few of the district’s judges are assigned to patent suits, Pistorino says.
But EDTX dropped to second place in 2011. According to Pistorino, this may have been a blip, attributable in part to the retirement of Judge T. John Ward, who is credited with getting cases in the Eastern District to move quickly. Ward retired in October 2011 after 12 years on the bench. His seat was filled in December 2011 by Judge James Rodney Gilstrap.
The resurgence of EDTX may have occurred at least in part because some of the uncertainties that arose with the implementation of the America Invents Act have been assuaged. New joinder rules were a cause for concern among plaintiffs’ attorneys, for example, because they require that a plaintiff that asserts a patent against multiple defendants must now file separate suits against each defendant.
EDTX judges have been innovative in their responses to the joinder rules. They’ve allowed cases brought by a single plaintiff against multiple defendants to be consolidated for claim-construction and discovery purposes, even though the defendants will have to be tried separately, says Douglas Cawley, a partner in McKool Smith in Dallas. “Generally speaking, some of the judges in the Eastern District of Texas have shown a willingness to craft pretrial procedures to efficiently manage multiple cases involving the same patent,” he said.
The District of Delaware may have temporarily usurped the Eastern District of Texas because attorneys were confident they would not be subject to a change of venue there if the company involved in the litigation was incorporated in Delaware. But in 2011 the U.S. Court of Appeals for the Federal Circuit ruled that being incorporated in Delaware is not enough to ensure a lawsuit will remain there. “The burden of uncertainty is now with Delaware,” Cawley says. Still, Delaware remains a popular venue. The number of patent suits filed in the district more than doubled, increasing from 484 cases in 2011 to 995 in 2012.
The increase wasn’t just limited to Delaware and Texas — a total of 5,574 patent cases were filed in district courts nationwide in 2012, more than one-and-one-half times the 3,660 filed in 2011, according to Pistorino’s research. (This does not include false-marking cases, which concern alleged use of expired patent numbers.) New filings in the Northern District of California rose from 225 to 258 during this time period, and in the Central District of California from 324 to 514. The District of New Jersey was one of the few venues to see a drop, from 180 to 157.
The higher numbers are not unexpected and are attributable again to the new joinder rules in the America Invents Act. Nonpracticing entities (NPEs, also known as patent trolls) had been asserting patents with abandon against multiple defendants. But the new law forces them to bring multiple cases even when asserting the same patent. “The number of cases therefore goes up,” Pistorino says.
The statistics show one unexpected drop — the total number of defendants in all new suits in all districts nationwide actually declined 15.4 percent, from 14,201 in 2011 to 12,013 in 2012. This may be because NPEs are choosing not to sue marginal defendants because of the greater cost associated with the new joinder rules, Pistorino says. “It’s hard to say conclusively why the number of defendants declined,” he adds. “But it could be that the AIA may be accomplishing some of what it set out to do.”