Just eyeballing it, it does look like new filings have fallen off a cliff. Good.
It's also remarkably easy to spot the trolls, e.g. "Spider Search Analytics LLC v. The Home Depot, Inc." and "Spider Search Analytics LLC v. Adidas America, Inc."; the pattern appears to be "Company you've never heard of because they're in the business of patent lawsuits vs. Company you've heard of because they're big enough to sue".
Data-mining this to build a real-time list of patent trolls could be fun.
One of them probably holds a patent on that though and would sue you for doing it.
The reason you are getting downvoted is probably twofold.
(1) Patents are not copyrights. They are distinct. You can patent a business process, which covers a ton of algorithms.
(1) Copyrights can cover the expression of facts. eg. ESPN can't copyright baseball statistics, but they can copyright the {webpages, spreadsheets, books, magazines} they publish which contain nothing more than factual scores / play statistics.
Big companies sue small ones to break them. (For reasons, like nipping potential competition in the bud for instance.) Patent trolls sue large ones because there is meat on their bones.
East Texas was popular with plaintiffs because it was very troll-friendly. East Texas knew what side it's bread was buttered.
Delaware is popular with companies because of its tax laws. The Delaware tax laws are deliberately to attract companies. Delaware knows what side it's bread is buttered.
I would expect Delaware courts to will be very defendant-friendly.
I'm a jury consultant who regularly works on patent cases in both east Texas and Delaware. The judges in Delaware are definitely more friendly to defendants than in East Texas but that doesn't say much. From what I've observed, they're fine. They're actually not any worse on average than judges in notoriously defense friendly venues like Northern California San Jose division. On the jury side, I'd say Delaware is fine for either a plaintiff of defendant. They're pretty even-keeled juries. You might expect Delaware to have fewer defense jurors than some venues because of the area demographics, but most Delaware jurors who would prove to be really bad for a defendant will be dismissed during hardship qualification and never make it onto the jury.
There is definitely going to be a shift away from east Texas but it's not happening as quickly or precipitously as we (in the industry) thought it would be.
There are plenty of other states with more favorable tax laws than Delaware. Delaware is popular because of it's well developed corporate caselaw and unmatched judicial experience, which is particularly attractive to investors (i.e. potential plaintiffs) because it minimizes legal risk.
If you want investment, there are only two states to consider when incorporating: your home state or Delaware. Any other state will give investors and their legal counsel pause.
That's not quite true. States do specialize, for example Nevada is known for those seeking beneficial living trusts, Montana is known for holding companies for expensive motor vehicles, and so on.
(he's retired now). He wrote the model jury instructions for patents, etc
I talked with him a number of times, and he seemed quite reasonable (he pushed folks towards settlement, tried to make sure patent cases had the expertise, in the form of special masters or whatever, that it requires for judges to understand them, etc)
By statistics, Delaware was not "defendant friendly" in patent cases (There are some papers with the numbers i'm too lazy to look up, but google can find them for you)
If it was defendant friendly, they'd grant more summary judgement motions than most courts. They don't. They grant less.
The graph difference is that they split the summmary judgement outcome more on both the positive and negative side (IE they grant in part, deny in part).
It's hard to say more than that (because people who file in each court may file more types of claims, etc. So outside of the two extremes, which is grant in full or deny in full, it's hard to say whether the outcomes were "right")
However, you can see ED Tx is plaintiff friendly by far.
> East Texas was popular with plaintiffs because it was very troll-friendly.
Plaintiff-friendly, whether or not the plaintiff was a troll.
And even that has noticeably been changing in the last couple years.
> Delaware is popular with companies because of its tax laws.
No, it popular because it is perceived as having both very well settled and very well understood corporate governance law, so that investors are secure.
> Delaware knows what side it's bread is buttered.
Delaware has only limited influence over the composition, court rules, and judgments of the US District Court for the District of Delaware, which the State of Delaware does not control. So, even to the extent that Delaware wants the court to rule a particular way, its ability to influence it is quite limited.
... and given that many companies are incorporated in Delaware, it's not unlikely that the defendant and plaintiff in a suit would often both be Delaware companies. So it's unclear that favoring one or the other would be better for Delaware from the perspective of maintaining their status as the go-to destination for incorporation.
Delaware is still somewhat plaintiff friendly because the judges rarely grant summary judgement. Once you get to a jury, all bets are off as a defendant. If you think judge's are bad at technology, you should see how juries deal with it.
We might be seeing a gradual end to the oil well/rights to patent analogy. Except a patent troll doesn't work like that. Those work like this (keeping the oil idea):
You acquire the rights and land to build a oil well. You dig one, and everything's great. It's all legit. Then someone comes along and says that because your dump truck looks an awful lot like his (which was stolen), all your oil belongs to him.
One of the side effects of this dynamic is that there's less chance for a circuit split if the vast majority are filed in one specific circuit. Which is generally a precondition for Supreme Court cases, and leaves them somewhat helpless to grant cert on cases they'd otherwise prefer to overturn.
> I would expect Delaware courts to will be very defendant-friendly.
Not really a given when you're talking about companies suing companies. In fact the article even mentions a defendant's motion to dismiss was rejected. This suggests the company would have preferred to defend in a different court, perhaps California.
Could this also be because the judge in that district court is about to retire and most of the patent lawsuits were filed by his sons who are attorneys in the same district court holding several shell companies?
Update: my source is this mind blowing documentary called Patent Scam (on amazon prime) which mentioned this conflict of interest. It’s way too unbelievable, but I believe it is true because otherwise the movie maker would be sued like crazy if it was a lie.
> Could this also be because the judge in that district court is about to retire and most of the patent lawsuits were filed by his sons who are attorneys in the same district court holding several shell companies?
Probably not; even if such a conflict has grown up during the EDTX dominance (and the risk of such a scheme being discovered is quite high -- litigants with lots at stake do, in fact, actively investigate for potential conflicts on the part of the judge -- and in addition to being likely to get everyone involved disbarred is one of the things that would be likely to get a US federal judge impeached, so it would take amazing gall to try it), the most famous judge in the district for handling large volumes of patent cases came to the bench in the district after it's dominance from being known as the "rocket docket" with short time from filing to resolution became known, and the various procedural rules that make the district (which has 7 district and 9 magistrate judges, its not a one-judge shop) plaintiff friendly are well-known.
Its much more likely that the Supreme Court case mentioned in the Ars article which sharply limits which districts a patent case can be filed in by clarifying that a corporation is "resident", for purposes of venue, only in that state in which it is actually incorporated is, in fact, what is altering venue selection for patent cases.
There's some outdated information here: Davis and Ward are former judges for the district, and both "have sons who are attorneys with patent-focused legal practices" in the district. However, both have now retired [0]. The current judge in Marshall, Rodney Gilstrap, does have a son, but one who does not practice patent litigation [1] [2].
[3] gives a lot more information about the origin of the rules that made East Texas initially attractive, as well as how "there are signs [Gilstrap] is starting to crack down on patent trolls." It's a much more nuanced story, with a clear narrative of how judges acting in good faith might design rules like this to speed up litigation... and I'm unsure how much a judiciary can or should take into account e.g. parties' abilities to pay for discovery, one of the main contributors to the environment here [4], when deciding on those rules. Federal legislative reform would be the clearest path here, but that's hard to come by these days.
Thanks for that reply! My understanding of this issue is solely based on the Patent Scam movie. Its actually made by the person who got sued because he sold an app on Google Play store! (basically anyone selling on Play Store could be sued this way).
In addition to the burden of discovery that you have mentioned, the fact that US allows an idea to be patented, is the root cause of this pain. Once that is addressed, innovation can thrive.
And I bet his only evidence that the maker of the film hasn't been sued is that he was able to watch the movie, making his standard basically that anything you see in a documentary must be true.
Not disagreeing with you. It may be a ‘truly terrible standard of evidence’, but there’s no evidence to prove the contrary for me to consider the other side’s arguments.
This "documentary" is a defamatory hit job by someone who (rightfully or wrongfully) was on the receiving end of a patent infringement suit. It needs to go away. There is much more serious discussions that need be had about the patent system than the theories and falsities raised by this guy.
The judges and other professionals working in the district are just that--professionals. There is no secret cabal of lawyers conspiring to screw tech companies there. The judges and courts are not biased against defendants and trying to screw them.
There may be a tendency of to protect the district (e.g., avoid transfers of cases out), since the judges see themselves as stewards of the community in which they serve. But that has no bearing on the merits of the case or who wins. And recent changes in the law have significantly mitigated this. The judges are very knowledgeable at patent law, being very experienced in the domain.
Source: Am a lawyer that has practiced over a decade there, represented both sides of the "v.", also appears in numerous other courts around the country, and has obtained multiple decisions from different EDTX judges forcing patent trolls to pay my clients' attorneys' fees for frivolous lawsuits.
I've read the collusion articles about that, that have been published in the last few years. It's obviously pretty terrible. Do you have specific data on the claim you're making? Around 10,000 patent lawsuits were filed over ten years in the Eastern District, you're saying over 5,000 were filed just by the sons?
Based on that documentary, every case if filed on behalf of a shell company, many of which lead to the same bunch of attorneys. So, its not me saying, but the movie says so.
In that documentary, you can see the frustrations on many of those entrepreneurs and medium sized companies who have been screwed over by these scumbags.
Why dont most people hear about this? Because settlement includes NDA that prevents those who have been screwed over, to talk about how they have been screwed.
Commenting in lieu of voting, because of conflicting factors:
I would have upvoted this post, but for the extensive complaint about downvotes; from the guidelines: "Please don't comment about the voting on comments. It never does any good, and it makes boring reading."
I wonder if this will have an economic impact on the communities of East Texas.
I think I read somewhere, though I cannot recall where (maybe Ars), that some companies where investing in community projects, events, and recreational facilities to improve their brands (essentially bribes) in anticipation of patent cases coming to the district.
Anyone know where I got that idea from, and if there might be an economic impact to the region?
If there was I never saw it, for years I have driven though ETX and its still nothing but podunk towns. Even the town square around the courthouse in Marshall was nothing special. It's simply a drive from Dallas you can make in a few hours. They have a airport but I hardly think that attorneys would do that over the drive.
As for any of those projects? Likely just a facade for what's really been going on which is essentially good ol' boy politics to keep the money flowing and people in power. The place you want to look at is Marshall, TX. It's not really that exciting of a town but you can find economic reports of that community so see that it's not really a hotbed of economic growth outside of the oil field business.
My opinion comes from many years of maintaining gas stations from DFW to Shreveport off I20 and all through ETX.
I'm guessing you got it from this article [1] or a similar one on the EFF site. You're correct about the investments, the major example cited is Samsung's sponsorship of an ice skating rink.
"a federal judge ruled that a case against supercomputer manufacturer Cray could be kept in East Texas because the company employed a single work-from-home employee in the district."
That seems crazy. Poor Cray guy....company is pulled into his backyard in a bad way because he worked from home.
Watch Patent Scam on Amazon Prime (or on iTunes I guess). Then you'll wonder how is this scam even tolerated!
Basically, its a nexus between the judge and attorneys who have shell companies filing lawsuits against legit entrepreneurs and medium sized companies.
The East Texas circuit is so remote that just going there is a pain.
Laws are such that burden of proof is on the company/person being accused in the lawsuit. That combined with the remoteness of this court, compels the accused to settle, along with an NDA that prevents them from sharing any details about the settlement.
This is somewhere between incomplete and inaccurate. The collusion aspect is far overstated, see other comments in this thread. And the idea that defendants settle because EDTX is too far away may account for some small litigants, but large companies can buy plane tickets. The real reason was a set of local rules that promoted expediency (to the point of being biased some may say), a docket not as inundated with drug cases as some other districts, a judge who was very pro patent owner, and a local jury pool comprised of people who were statistically ‘dumber’ than average and really liked patent owners. And a local cottage industry of sorts set up to support this type of litigation (shell corporation headquarters, local counsel, jury consultants, etc,) I’m not defending any of it, but it’s inaccurate to just say it was all a conspiracy
Based on several articles that got published over the years, investigating the district's patent practices, it was overwhelmingly plaintiff friendly. There was a judge there that was particularly infamous (at the peak he was handling 1/4 of all patent cases in the US).
This is absolutely insane, especially in USA. Courts here are supposed to be impartial and just. If you increase your chances by x in a certain court--and you can file there--what justice is it? Shocked that this travesty lasted this long.
Its actually very much unlike that. While the communities in the Eastern District of Texas did benefit from the popularity of the venue because frequent patent litigants -- one either side -- spend lots of money in those communities essentially trying to buy sympathy in the jury pool, those communities have essentially no control over the court rules that drive the popularity of the venue; its not a race-to-the-bottom competition like the Amazon HQ2 competition, and similar (usually less formalized) efforts to attract other big companies with tax abatements.
Readit News
Just eyeballing it, it does look like new filings have fallen off a cliff. Good.
It's also remarkably easy to spot the trolls, e.g. "Spider Search Analytics LLC v. The Home Depot, Inc." and "Spider Search Analytics LLC v. Adidas America, Inc."; the pattern appears to be "Company you've never heard of because they're in the business of patent lawsuits vs. Company you've heard of because they're big enough to sue".
Data-mining this to build a real-time list of patent trolls could be fun.
One of them probably holds a patent on that though and would sue you for doing it.
(1) Patents are not copyrights. They are distinct. You can patent a business process, which covers a ton of algorithms.
(1) Copyrights can cover the expression of facts. eg. ESPN can't copyright baseball statistics, but they can copyright the {webpages, spreadsheets, books, magazines} they publish which contain nothing more than factual scores / play statistics.
fixed this for you, but not really, because usually it's the small firms that may break under the pressure of suits.
Both are fine. Human language is like that.
> fixed this for you
Your fix is incorrect. Both infinitives are correct. One is passive and the other is active.
Delaware is popular with companies because of its tax laws. The Delaware tax laws are deliberately to attract companies. Delaware knows what side it's bread is buttered.
I would expect Delaware courts to will be very defendant-friendly.
There is definitely going to be a shift away from east Texas but it's not happening as quickly or precipitously as we (in the industry) thought it would be.
Thanks for chiming in. There are a lot of "Go Delaware!" comments here, but it is easier to trust ones based on some experience/expertise like this.
If you want investment, there are only two states to consider when incorporating: your home state or Delaware. Any other state will give investors and their legal counsel pause.
No wonder the USA is the best in the world at being a tax haven.
The main person dealing with patents as a whole there used to be Judge McElvie, https://en.wikipedia.org/wiki/Roderick_R._McKelvie
(he's retired now). He wrote the model jury instructions for patents, etc
I talked with him a number of times, and he seemed quite reasonable (he pushed folks towards settlement, tried to make sure patent cases had the expertise, in the form of special masters or whatever, that it requires for judges to understand them, etc)
By statistics, Delaware was not "defendant friendly" in patent cases (There are some papers with the numbers i'm too lazy to look up, but google can find them for you)
Can't say how it is now though.
https://www.bna.com/rural-texas-judge-n57982086954/
If it was defendant friendly, they'd grant more summary judgement motions than most courts. They don't. They grant less.
The graph difference is that they split the summmary judgement outcome more on both the positive and negative side (IE they grant in part, deny in part).
It's hard to say more than that (because people who file in each court may file more types of claims, etc. So outside of the two extremes, which is grant in full or deny in full, it's hard to say whether the outcomes were "right")
However, you can see ED Tx is plaintiff friendly by far.
Plaintiff-friendly, whether or not the plaintiff was a troll.
And even that has noticeably been changing in the last couple years.
> Delaware is popular with companies because of its tax laws.
No, it popular because it is perceived as having both very well settled and very well understood corporate governance law, so that investors are secure.
> Delaware knows what side it's bread is buttered.
Delaware has only limited influence over the composition, court rules, and judgments of the US District Court for the District of Delaware, which the State of Delaware does not control. So, even to the extent that Delaware wants the court to rule a particular way, its ability to influence it is quite limited.
You acquire the rights and land to build a oil well. You dig one, and everything's great. It's all legit. Then someone comes along and says that because your dump truck looks an awful lot like his (which was stolen), all your oil belongs to him.
More like: your dump truck looks an awful lot like a drawing he has.
> I would expect Delaware courts to will be very defendant-friendly.
Not really a given when you're talking about companies suing companies. In fact the article even mentions a defendant's motion to dismiss was rejected. This suggests the company would have preferred to defend in a different court, perhaps California.
Deleted Comment
Update: my source is this mind blowing documentary called Patent Scam (on amazon prime) which mentioned this conflict of interest. It’s way too unbelievable, but I believe it is true because otherwise the movie maker would be sued like crazy if it was a lie.
Probably not; even if such a conflict has grown up during the EDTX dominance (and the risk of such a scheme being discovered is quite high -- litigants with lots at stake do, in fact, actively investigate for potential conflicts on the part of the judge -- and in addition to being likely to get everyone involved disbarred is one of the things that would be likely to get a US federal judge impeached, so it would take amazing gall to try it), the most famous judge in the district for handling large volumes of patent cases came to the bench in the district after it's dominance from being known as the "rocket docket" with short time from filing to resolution became known, and the various procedural rules that make the district (which has 7 district and 9 magistrate judges, its not a one-judge shop) plaintiff friendly are well-known.
Its much more likely that the Supreme Court case mentioned in the Ars article which sharply limits which districts a patent case can be filed in by clarifying that a corporation is "resident", for purposes of venue, only in that state in which it is actually incorporated is, in fact, what is altering venue selection for patent cases.
[3] gives a lot more information about the origin of the rules that made East Texas initially attractive, as well as how "there are signs [Gilstrap] is starting to crack down on patent trolls." It's a much more nuanced story, with a clear narrative of how judges acting in good faith might design rules like this to speed up litigation... and I'm unsure how much a judiciary can or should take into account e.g. parties' abilities to pay for discovery, one of the main contributors to the environment here [4], when deciding on those rules. Federal legislative reform would be the clearest path here, but that's hard to come by these days.
(I am not a lawyer.)
[0] https://arstechnica.com/tech-policy/2015/04/east-texas-judge...
[1] http://mcsmith.blogs.com/eastern_district_of_texas/2011/05/j...
[2] https://www.velaw.com/Who-We-Are/Find-a-Lawyer/Gilstrap--Ste...
[3] https://motherboard.vice.com/en_us/article/aek3pp/the-small-...
[4] http://www.patentprogress.org/2014/05/21/popular-patent-judg...
In addition to the burden of discovery that you have mentioned, the fact that US allows an idea to be patented, is the root cause of this pain. Once that is addressed, innovation can thrive.
That's a truly terrible standard of evidence. The fact that a documentary maker hasn't been sued isn't evidence of anything.
The judges and other professionals working in the district are just that--professionals. There is no secret cabal of lawyers conspiring to screw tech companies there. The judges and courts are not biased against defendants and trying to screw them.
There may be a tendency of to protect the district (e.g., avoid transfers of cases out), since the judges see themselves as stewards of the community in which they serve. But that has no bearing on the merits of the case or who wins. And recent changes in the law have significantly mitigated this. The judges are very knowledgeable at patent law, being very experienced in the domain.
Source: Am a lawyer that has practiced over a decade there, represented both sides of the "v.", also appears in numerous other courts around the country, and has obtained multiple decisions from different EDTX judges forcing patent trolls to pay my clients' attorneys' fees for frivolous lawsuits.
Based on that documentary, every case if filed on behalf of a shell company, many of which lead to the same bunch of attorneys. So, its not me saying, but the movie says so.
In that documentary, you can see the frustrations on many of those entrepreneurs and medium sized companies who have been screwed over by these scumbags.
Why dont most people hear about this? Because settlement includes NDA that prevents those who have been screwed over, to talk about how they have been screwed.
I would have upvoted this post, but for the extensive complaint about downvotes; from the guidelines: "Please don't comment about the voting on comments. It never does any good, and it makes boring reading."
Deleted Comment
I think I read somewhere, though I cannot recall where (maybe Ars), that some companies where investing in community projects, events, and recreational facilities to improve their brands (essentially bribes) in anticipation of patent cases coming to the district.
Anyone know where I got that idea from, and if there might be an economic impact to the region?
As for any of those projects? Likely just a facade for what's really been going on which is essentially good ol' boy politics to keep the money flowing and people in power. The place you want to look at is Marshall, TX. It's not really that exciting of a town but you can find economic reports of that community so see that it's not really a hotbed of economic growth outside of the oil field business.
My opinion comes from many years of maintaining gas stations from DFW to Shreveport off I20 and all through ETX.
[1] https://motherboard.vice.com/en_us/article/aek3pp/the-small-...
That seems crazy. Poor Cray guy....company is pulled into his backyard in a bad way because he worked from home.
https://motherboard.vice.com/en_us/article/aek3pp/the-small-...
Basically, its a nexus between the judge and attorneys who have shell companies filing lawsuits against legit entrepreneurs and medium sized companies.
The East Texas circuit is so remote that just going there is a pain.
Laws are such that burden of proof is on the company/person being accused in the lawsuit. That combined with the remoteness of this court, compels the accused to settle, along with an NDA that prevents them from sharing any details about the settlement.
https://boingboing.net/2017/09/26/judge-rodney-gilstrap-2.ht...
https://www.dallasnews.com/business/technology/2017/05/24/ea...