East Texas’ Patent Star Chamber Is Down But Not Out
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When the U.S. Supreme Court handed down the landmark case TC Heartland v. Kraft earlier this year, patent reform advocates breathed a sigh of relief. Here, at last, was the unanimous smackdown that would put an end to venue shopping trolls trying to use any specious excuse they could to get in front of friendly judges. The most infamous of such friendly judges, Rodney Gilstrap of the East Texas District Court, probably figured prominently in that relief, particularly given Gilstrap’s tendency to out and out defy precedent.

The good news is, they were at least partially right. As the World Intellectual Property Review notes, the East Texas District Court’s share of patent cases filed declined by 11 percent since TC Heartland was handed down. Clearly, unanimous rulings intended to curb the power of runaway courts like East Texas do have some effect in remedying the problem.

The bad news, however, is that while the proponents of reform were right to be optimistic, they were only partially right. Lawyers are an ingenious bunch, and as it happens, Gilstrap has struck again in widening the options for plaintiffs still looking to make a killing in his courtroom, eligibility to file be damned. Ars Technica reports on a recent case in which Gilstrap decided that Seattle-based supercomputer maker Cray, Inc. could be tried in his court for allegedly violating patents belonging to Raytheon, despite being…well, from Seattle. His reasoning? Cray employs a single salesman who happens to work out of a home in the East District, but sold none of the offending products that Raytheon is suing over. Therefore, under the TC Heartland precedent, Cray has a “regular and established” business in the district, and is subject to Gilstrap’s gavel.

Now, put aside for the moment whether Cray actually violated Raytheon’s patents, because at this stage, it’s far too soon to tell, and besides, it’s not the point. The point is that even if it turns out that Cray did violate those patents, it does not follow from this that Raytheon has the right to sue them over it in any court they like, provided they can find a single employee of Cray’s who lives in that district. Even if Cray is one hundred percent guilty, due process is for the guilty as well as for the innocent, and due process means you get sued where you actually are alleged to have done something wrong, not wherever the plaintiff thinks will be most convenient. Furthermore, given that Gilstrap so tortured the logic of TC Heartland’s venue restrictive doctrine, it scarcely seems safe to assume that Cray could be assured of a fair trial from him in any other way.

Fortunately, Cray has appealed the case. Not only that, but members of Congress including Reps. Darrell Issa (R-CA) and Bob Goodlatte (R-VA) have denounced Gilstrap’s ruling in no uncertain terms, accusing it of ignoring the TC Heartland case in order to keep the patent gravy train flowing through his district. But strongly worded denunciations are not at all enough to solve this problem. TC Heartland was clearly never going to be a magic bullet, and only legislation will be able to truly fix the shrinking hole in patent law through which judges like Gilstrap magically still seem to be able to drive entire trains.

Perhaps this latest outrage will inspire Congress to finally put the brakes on such nonsense. Certainly, Sens. Cory Gardner (R-CO) and Jeff Flake (R-AZ) seemed perfectly willing to in the last session with the Venue Equity and Non-Uniformity Evaluation (VENUE) Act of 2016. Unlike Gilstrap’s jurisdiction, that’s almost certainly something that should be resurrected.

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