Justices make it easier for companies to defend patent cases

The ruling is a blow to so-called patent trolls — shell companies that buy up patents and force businesses to pay license fees or face expensive litigation. Many of those cases now may have a tougher time getting to trial or result in jury verdicts that are less generous.

Companies including eBay, Kickstarter and online crafts site Etsy had urged the high court to restrict where such cases can be filed, saying they have been sued repeatedly in courts hundreds or thousands of miles away from corporate headquarters. Even Texas Solicitor General Scott Keller led a coalition of 17 states calling for an end to so-called forum shopping in patent cases.

Groups representing inventors and patent owners said new restrictions would place burdens on patent holders and encourage infringing behaviour and piracy.

Writing for the court, Justice Clarence Thomas relied on a 1957 Supreme Court case that said patent cases can be brought only where the defendant company is incorporated. He said the federal appeals court in Washington that handles patent appeals was wrong to say that Congress had changed those rules.

The ruling is a “seismic decision” that will affect patent litigation around the country, said John O’Quinn, a Washington, D.C., lawyer specializing in patent law. He said it may lead to a surge in patent cases in Delaware, where many companies are incorporated due to favourable state law.

That shift will mean a dramatic decline in cases at the federal courthouse in Marshall, Texas, where hundreds of patent lawsuits are filed each year.

Justice Neil Gorsuch did not take part in the case, which was argued before his confirmation.

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This story has been corrected to show that Scott Keller’s title is solicitor general.

Sam Hananel, The Associated Press

by Canadian Press

Justices make it easier for companies to defend patent cases

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