IP: The failure of venue and joinder reform in patent litigation

Why the America Invents Act hasn’t helped patent defendants

Until recently, a patent plaintiff had its choice of bringing suit in any forum in which an accused product was sold—in practice, usually any court in the country. In addition, in the Eastern District of Texas, plaintiffs could typically join as many defendants as they cared to sue under the same set of patents in a single suit. One result was  large multi-defendant patent suits in venues such as the Eastern District of Texas, in which a large number of unrelated companies found themselves together in a single patent suit.

The America Invents Act (AIA) changed the joinder rules in 2012, partly in response to the argument that large, multi-defendant cases allowed unscrupulous patent owners to trade on the defendants’ litigation costs and reach artificially high settlements. The theory was that it was cheap for a patent owner to sue a lot of defendants in a single forum, perhaps one inconvenient to many of the defendants, and then to extract nuisance settlements based in part on the costs of getting out of a large and messy case in a distant place. Some also questioned the fairness of forums commonly chosen by patent owners, most typically the Eastern District of Texas. In other words, the argument went, settlements were based on procedural headaches instead of the merits of the patents.

The World Did Not Change Much

Have the joinder and venue reforms improved the situation for patent defendants? Not really, in my opinion.

Contributing Author

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Jake Holdreith

Jake Holdreith is a partner at Robins, Kaplan, Miller & Ciresi L.L.P. He counsels clients and tries complex lawsuits including intellectual property, regulatory...

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