Tuesday, July 19, 2005

IS MARKMAN BRINGING BACK FORUM SHOPPING? (AKA "I'M LOOKING AT YOU E.D. TEX . . .") In Mayer's dissent in Phillips, it was pointed out that the Federal Circuit was created for the purpose of bringing consistency to the patent field. One of the problems the Federal Circuit was meant to address was the practice of forum-shopping, where patentees "shopped" their litigations to jurisdications that had reputations for being "pro-patent" (while defendants steered cases to jurisdictions having reputations for being "anti-patent"). By consolidating appellate review in the Federal Circuit, the theory was that more consistent pronouncements would follow in patent jurisprudence.

The opposition to forum-shopping is rooted in the notion that the law ought not be manipulable and that its application ought to be uniform. With commerce occurring routinely over multiple state borders, jurisdictional choices for plaintiffs are plentiful and the importance of consistency among forums becomes more important. Manipulating the administration of law thwarts the ideal of neutrality in a system whose objective is to create a level playing field for resolution of disputes. The ultimate result is unpredictability and inconsistency in the application of the law among the district courts. This instability erodes public confidence in the law and its enforcement and creates doubt about the fairness of the system (for more on forum-shopping in patent cases, including some interesting 2001 statistics, click here).

Since Markman and its progeny, claim contruction became a matter of law, which means that the Federal Circuit reviews lower court's claim interpretations de novo (i.e., without deference). However, since claim construction is such an important part in patent litigation, most cases will settle soon after claim construction, when each side, when they aren't fighting to the bitter end, will have a clearer vision of which legal theories (if any) remain valid, and which ones have been reinforced/compromized.

Since predicting the Federal Circuit's behavior is difficult (even with a clear record in the lower court), most parties will simply settle, rather than paying expensive legal fees to take a case through appeal on nothing more than an educated guess.

Enter the Eastern District of Texas, Marshall Division.

Jurisdictions such as the E.D. Virginia have been popular for their "rocket-docket" efficiency in processing cases (although not as much recently). While being quick, the E.D. Va. was generally known as being a no-nonsense jurisdiction, with no blatant leanings toward the "pro-patent" or "anti-patent" sides. However, I'm starting to question whether the same thing can be said about the E.D. Texas. In a recent conversation with fellow practitioners, someone pointed out that, over the last 5 years or so, the district has very rarely invalidated any of the patents asserted in court, and the court is a veritable darling of the patent holding companies that love to sue people there (even the personal injury attorneys are getting in on the action).

Does anyone have empirical studies done on patent cases in this jurisdiction? I know that patent cases have tripled over the last 2 years - there must be something here that's not being openly talked about. When you see "repeat customers" such as Acacia, Forgent DataTreasury, Intergraph, Tessera, etc. something must be up . . .

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