Corporations interested in enforcing their intellectual property, monetizing their patent portfolios, or defending themselves against charges of infringement have multiple forums to press their case, the most popular of which are: an infringement suit or declaratory judgment action in the United States district courts; an investigation at the U.S. International Trade Commission (ITC), and filing either an inter partes review or post-grant review at the U.S. Patent and Trademark Office. Each forum has unique opportunities and challenges, and it can be hard to determine the benefits and drawbacks of each. This series introduces each venue and the strategic considerations in pursuing actions at each, starting with the district courts.
The first venue that comes to most counsels’ minds is the United States district courts. The district courts are the most traditional option for offensive use—enforcing your intellectual property rights. They may also be used defensively, as companies who have been threatened with (or had their customers threatened with) charges of infringement may file actions for a declaratory judgment of patent invalidity or non-infringement.
However, there are also downsides to the district courts. It is the slowest option and, outside of certain districts, you may have a judge with limited experience in patents or interest in delving into the details of technology. In addition, juries may be unsympathetic to foreign clients, have difficulty with technology, and always add uncertainty.
While district courts do issue injunctions as a remedy for intellectual property infringement, after the Supreme Court’s 2006 decision in EBay v. MercExchange it has become increasingly difficult to obtain injunctions in the district courts. Post-EBay, the rate of injunctions in district court has fallen to only 75 percent of reported cases overall, with the percentage being much lower in certain types of patent cases. Further, even when district courts issue injunctions, they may be ineffective to stop sales by small parties, which either avoid detection or ignore the order. As discussed in a later installment, if your primary goal is injunctive relief, the ITC may be your best option. The ITC, and its general exclusion order, is particularly effective when many small parties infringe your intellectual property or the products enter the country many hard-to-police ways, such as with knockoffs. Another disadvantage to the district courts for parties with multiple infringers is the fact that, due to changes made in the 2011 America Invents Act, district court plaintiffs are often unable to name all potential infringers in one suit and must instead bring multiple suits in multiple districts.
Should you opt to pursue your claims in district court, you are likely to find yourself in the following districts, ranked in order of number of patent cases: Eastern District of Texas, District of Delaware, Northern District of California, or Eastern District of Virginia. Below are some pros and cons of each:
Eastern District of Texas: much has been written about this district and its rise to popularity, much of it relating to the small size of the local patent bar (making the retention of knowledgeable local counsel essential), reputation for patent-friendliness ( patentees win in 57 percent of cases, with median awards of $10 million), and some large jury verdicts. In PriceWaterhouseCoopers’ 2013 Patent Litigation Study, median time to trial was roughly two years. However, it may unfairly have the reputation for being less welcoming to foreign companies, or those without the best local counsel.
District courts offer the widest range of relief for the widest range of infringements and may be used defensively. However, they are the slowest, least predictable, and most expensive option, and are unsuited to certain cases.
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Aarti Shah is a member in Mintz Levin’s Washington, D.C. office and former senior investigative attorney at the U.S. International Trade Commission. She specializes in...Bio and more articles