Daniel Nazer

  • January 22, 2016
    Guest Post
    by Daniel Nazer, Staff Attorney and Mark Cuban Chair to End Stupid Patents, Electronic Frontier Foundation
     
    *This post is part of the ACSblog Symposium on Patent Law Reform.
     
    If you got sued for patent infringement in 2015, chances are pretty good that you were sued in the Eastern District of Texas. An astonishing 2,514 patent lawsuits – or 44 percent of the national total – were filed there this year. Over 1,500 of these cases were filed before a single judge: Judge Rodney Gilstrap. While patent suits have clustered in Eastern Texas for nearly a decade, this year saw an unprecedented concentration. This extreme forum shopping raises important questions about procedural fairness and due process.
     
    Why are so many patent cases filed in the Eastern District of Texas? It’s not for the barbecue. And it’s not because the remote, largely rural district is a technology hub. Rather, it’s because local rules and practices make the district attractive to patent plaintiffs. More specifically, local practices make the district very attractive to companies – known as patent trolls – whose sole business model is to buy patents and sue.
     
    For example, the Eastern District of Texas judges that most frequently hear patent cases have standing orders requiring parties to submit letter briefs asking permission to file for summary judgment. This makes it harder for defendants to avoid a costly trial. A recent study found that judges in the district granted only 18 percent of motions for summary judgment on the basis of patent invalidity. (In contrast, the grant rate nationwide was 31 percent.) Considering that this study did not include cases where the defendant wasn’t even permitted to file for summary judgment in the first place, it follows that the true grant rate in the Eastern District of Texas is even lower.
     
    In addition to the inconvenience of litigating in a distant forum, local rules make discovery more expensive. The local discovery order in patent cases requires parties to automatically begin producing documents before the other side even requests them. This practice ‒ which, in EFF’s view, is not consistent with the Federal Rules ‒ particularly burdens patent defendants. That is because unlike shell company patent trolls, operating companies need to search and produce a huge volume of documents. These burdensome discovery practices create pressure to settle weak cases and thus attract trolls to the district.