Texas Welcomes TC Heartland

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Texas Welcomes TC Heartland


What does the Supreme Court opinion in TC Heartland mean for the business of patent litigation in Texas—particularly the Eastern District of Texas? On first read, TC Heartland seemed to herald the end of the kind of forum–shopping that enabled the Eastern District of Texas to land 40% of all newly filed patent cases. The courts have now begun to wrestle with the opinion, and its consequences, with the courts of east Texas indicating a willingness to hold on to their caseload.

What about previously filed cases? Although TC Heartland reversed a controlling Federal Circuit precedent, courts in Texas have concluded that it nonetheless did not represent an intervening change in the law sufficient to overcome a waiver of the venue issue if not raised and preserved properly. That was the conclusion of judges in both the Northern District of Texas (iLife Techs., Inc. v. Nintendo of Am., Inc., 3:13–cv–4987 (N.D. Tex. June 27, 2017)) and Eastern District (Elbit Sys. Land v. Hughes Network Sys. LLC, 2:15–cv–37 (E.D. Tex. June 20, 2017)).  A court in Washington reached the opposite conclusion (Westech Aerosol Corp. v. 3M Co., 3:17–cv–5067 (W.D. Wash. June 21, 2017)).

How much presence is enough? In Raytheon Co. v. Cray, Inc., 2:15–cv–1554 (E.D. Tex.  June 29, 2017), Judge Gilstrap applied a four–part test to decide that the presence of a full–time sales representative in the district established the propriety of venue. The factors he identified: (1) extent of physical presence; (2) extent the defendant represents that it has physical presence; (3) benefits derived by the defendant from its presence; and (4) extent of targeted interactions with others in the district. Whether this test will be adopted by other courts remains to be seen.

A west Texas court, however, determined that an authorization to conduct business in Texas, a listing of Texas distributors, and selling products into Texas did not combine to create sufficient presence to ground venue in that district (LoganTree v. Garmin Int’l, Inc., 5:17–cv–98 (W.D. Tex. June 22, 2017)).

Stay tuned, as they say, for further developments.

Hat tip to the invaluable Docket Navigator for their daily updates on patent case law.

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