Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Welcome
Go
Free Newsletter Sign Up

Patent Plaintiffs Scrambling After Texas Court Cools Hotspot

July 27, 2022, 9:05 AM

Patent owners are being forced to head into less-friendly courts to sue for infringement, after the popular Western District of Texas moved to make patent case assignments more random.

Any new patent cases filed in Waco will now be “equitably distributed” among the 12 judges in the US District Court for the Western District of Texas through random case assignments, according to a Monday order from Chief Judge Orlando L. Garcia.

The move ends the popular practice of judge shopping for US District Judge Alan Albright, whose quick trial times, patent litigation experience, and personal advertising for more patent cases attracted plaintiffs to flock to his courtroom. The flood of patent cases filed in the Western District—from 70 in 2017 before Albright joined the bench to 970 in 2021—will dry up as a result, attorneys said.

For now, patent owners suing for infringement will likely turn to the District of Delaware, a venue in a state where many companies are incorporated that lacks a plaintiff-friendly reputation, attorneys said. They may also file any suits against tech companies in the Northern District of California, where many of the companies are based, the attorneys said.

Patent owners will have to spend more time and money in courts that don’t run at the brisk pace Albright established, Douglas R. Wilson, a founding partner at Armond Wilson LLP, said.

“It’s a very big deal to patent plaintiffs,” Wilson said. “It effectively ends the party in the Western District of Texas for patent plaintiffs.”

The order comes as the Judicial Conference Committee has pointed to random case assignment as a possible solution for forum shopping, said Brady Cox, a partner at Alston & Bird LLP in Dallas.

The Administrative Office of the US Courts found there wasn’t a justification to extend a pilot program that funneled patent cases to a small group of judges with an eye toward increasing expertise, in a 2021 report to lawmakers obtained by Bloomberg Law. The Judicial Conference’s “longstanding prioritization” of random case assignment must be weighed against any potential increased efficiency from having more expert judges, the report said .

Albright, who didn’t participate in the program, praised it last year, saying it’s “better to have a judge that is receptive to patent cases.”

He declined to comment on Garcia’s order. Garcia didn’t immediately respond to a request for comment.

Filling ‘The Void’

Nearly 25% of all US patent litigation was concentrated in Albright’s court last year, the result of a case filing system in the Western District of Texas that allowed plaintiffs to choose which judge will hear their case. As the only judge in Waco, Albright was guaranteed to hear the patent case if filed there, until the court issued its July 25 order.

Albright encouraged plaintiffs to come to Waco through presentations to patent attorneys and procedural rules that allowed for speedy trials. He’s unlikely to pause a case pending a patent validity proceeding known as “inter partes review” at the US Patent and Trademark Office, unlike judges in Delaware. Such pauses can delay infringement litigation for a year or more.

“It’s probably the biggest development in patent law this year,” said Paul R. Gugliuzza, a law professor at Temple University. “In the short term, Delaware is a safe default, but in the longer term, plaintiffs are going to go back to the drawing board and think about what other good options there are.”

More than 20% of patent cases filed nationwide last year were brought in Delaware, District Chief Judge Colm Connolly wrote in the court’s annual report released July 25. Intellectual property cases make up 49% of the court’s civil docket, according to the report.

Filing in Delaware carries the benefit of so many companies being incorporated there, meaning a dispute about venue is unlikely, attorneys say. The judges there also frequently hear patent cases. But, the delays from staying cases while judges wait for patent validity reviews at the PTO to be resolved can cost patent owners time and money.

“A patent case is an investment, no matter what the status of the plaintiff is,” Wilson said. “Delaying a return on investment by a year or more if you wait for an appeal of an IPR, it’s a material impact.”

Plaintiffs may also return to the Eastern District of Texas—a previous patent litigation epicenter that was curbed by a US Supreme Court decision in 2017. That decision didn’t make it impossible, though, to file in the Marshall, Texas, court, which is more friendly to patentees, said Emma Frank, an intellectual property attorney at Wolf, Greenfield & Sacks PC.

Or, another patent hot spot could be around the corner, Frank said.

“It’ll be interesting to see if we start seeing more and more cases about proper venue as they come into the Eastern District of Texas,” she said. “Do we see the rise of Marshall, Texas, again? Or is there some new district out there looking to fill the void?”

Judge Shopping

The issue of judge shopping isn’t unique to patent law, but the patent bar has been making lots of noise about it, said Stephen I. Vladeck, the Charles Alan Wright Chair in Federal Courts at the University of Texas School of Law.

The ability of one party to pick the judge raises questions about the perceived neutrality of the court system, Vladeck said. He authored a friend-of-the-court brief in US v. Texas backing the Biden administration in asking the Supreme Court to block a district judge’s nationwide injunction against immigration enforcement priorities.

The Western District of Texas order came amid pressure from Congress and US Chief Justice John Roberts, who requested a report reviewing the flood of filings in Waco. The Western District can make its own assignment rules, and it’s under that authority that it released the order, according to an Administrative Office of the US Courts spokesperson.

“The problem of patent plaintiffs singling out Waco is something the patent bar has been talking about for well over a year now.” Vladeck said. “In some respects, it’s not surprising that the drum beat was finally too loud for the district court not to act.”

Judge shopping isn’t dead in the Western District of Texas, though.

Erick Robinson, the intellectual property co-chair at Spencer Fane LLP in Texas, said he’ll plan to file in Austin, where he’s guaranteed one of two judges who he’s comfortable with, or in East Texas. The sky isn’t falling for patent plaintiffs, he said.

“The order is just very narrowly tailored. If you file in Waco, it gets redistributed, but if I file in Austin, then it’s not,” Robinson said. “If the real fear is that you get to pick your judge, then what about Laredo? What about Del Rio?”

Ultimately, Albright’s ability to consolidate so much patent litigation in his courtroom is a symptom of the larger problem that goes beyond patent cases, Vladeck said. In many Texas courts, a plaintiff can choose a judge by filing in a particular division.

“It’s really targeted at Judge Albright, but ironically, it’s so focused on one particular tree that it really misses the rest of the forest,” Vladeck said. “ The fact that even now the order is only about patent cases in Waco, drives home why the phenomenon shouldn’t be left to the district courts that caused it to fix.”

—With assistance from Madison Alder

To contact the reporter on this story: Samantha Handler in Washington at shandler@bloombergindustry.com

To contact the editors responsible for this story: Keith Perine at kperine@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com