Help slow the drag with patent venue reform

As our country and North Carolina look to accelerate the growth of our economy and expand its reach to all citizens, one issue has been a continuing drag: abusive patent litigation.

One prevalent tactic of abusers is to haul companies into virtually any district court in the United States, including those far away and those in locations that have nothing to do with where you do business.

Under current patent law, infringement suits can be brought in courts with no or little connection to the parties in the litigation. “Patent trolls” use this weakness in the system to select the courts well-known for their friendliness to patent suits.

For most of these patent trolls, their court of choice is the Eastern District Court of Texas (EDTX), which has been the No. 1 venue for bringing patent suits for nearly a decade. The EDTX saw 44 percent of all patent infringement cases filed in the entire U.S. in 2015, with one judge overseeing more than a quarter of all cases – twice as many as the next most active patent judge.

As a home-grown, global company headquartered in North Carolina that has been recognized as one of the world’s most innovative companies, Red Hat has repeatedly been forced into court in the EDTX. We have no office there; we do no business from there. The patent litigation abusers have minimal contact there, sometimes just a small office. But they go for a leg up in that district, given its reputation.

Red Hat and other companies have tried to move cases to where we can get a fair hearing, but the rules to change venue don’t easily allow that. We believe patent infringement suits, just as other types of suits, should be heard in judicial districts that have a reasonable connection to the dispute.

Congress has an opportunity to right the unbalanced and costly patent litigation system. The House and Senate Judiciary Committees have produced bills to promote innovation and prevent abusive patent litigation. The bills include provisions to require making pleadings clear, reducing costly discovery demands and making those who troll the system to their advantage pay up for frivolous suits.

Action by Congress must include venue reform. In July, more than 40 patent law academics and economics experts wrote a letter to the heads of the House and Senate Judiciary Committees urging them to address the significant problem of forum shopping in patent litigation cases and noting that this type of dynamic is bad for patent law and bad for U.S. innovation.

North Carolina’s legislature recognized the economic importance to our state of curtailing activities of so-called “patent trolls” by passing the Abusive Patents Assertion Act in 2014. State law can do only so much, however. Federal action is needed to put an end to forum shopping.

Congress needs to act to close the gaping loopholes in our patent system that have allowed those who game the system to flourish. American businesses that create jobs for our citizens deserve the opportunity to compete on a level playing field in our communities.

This story was originally published September 16, 2016 at 12:46 PM with the headline "Help slow the drag with patent venue reform."