The United States Supreme Court ruled in a unanimous decision that patent infringement lawsuits can only be filed in courts where the defendant is incorporated, TechPowerUp reports. While it's too early to know the true ramifications of this, it could make it more difficult for so-called patent trolls to extort money from companies that are trying to innovate.
This latest ruling overturns a previous one by the US Court of Appeals for the Federal Circuit in which it was determined last year that patent lawsuits can be held anywhere a defendant's products are sold. The reason this matters is because a whopping 40 percent of all patent lawsuits in the US are filed in East Texas, which has a history of ruling in favor of patent trolls.
We've seen many patent disputes over the years. Some are legitimate cases of patent infringement, though there are many people who have called for patent reform in the wake of companies making a living by acquiring patents for the sole purpose of suing other outfits for royalties and damages. It's a practice that hurts the industry as large.
In this case, it wasn't a technology company that spurred the ruling, but a legal tussle between TC Heartland LLC and Kraft Heinz Co. Heartland argued that the case should be transferred to its home state of Indiana since it has no presence in Delaware, where the suit was originally filed. The Supreme Court ultimately sided with TC Heartland LLC, and in the process changed the game for patent lawsuits.
"The Supreme Court’s unanimous decision is a significant victory for the software developers who drive the $143 billion app ecosystem, as well as patent holders across the country," Morgan Reed, president of ACT | The App Association, told The Washington Post.
Time will tell, but the potential upshot is that tech companies can divert resources that would have been spent on frivolous lawsuits into new technologies and products instead.