AIA Changes The Role of the Eastern District of Texas

Jim Pistorino has updated his annual BNA report on patent lawsuit case filings. His biggest finding is that the new joinder provisions of the America Invents Act (AIA) appear to have had a major impact on the distribution of new lawsuit filings.

The new joinder rules became effective for all patent lawsuits filed on or after September 16, 2011 [updated to fix typo] and limit the ability of a plaintiff to join multiple unrelated defendants in a single action.  In addition to potential cost savings of a single-suit, the joining of geographically diverse defendants in a single suit is thought to make it more difficult for one of the defendants to force a transfer of venue. Thus, the idea behind limiting the joinder of unrelated defendants is that it may allow courts to more easily transfer venue and thus shift filing focus away from the Eastern District of Texas.

The punch line here from the preliminary data through December 2011 is that (1) post-AIA filings have dropped in the Eastern District of Texas and risen in other districts, namely Delaware; (2) more cases are now being filed in Delaware than any other district; (3) more defendants are being sued in Delaware than any other district. Prior to AIA, E.D. Texas was the clear leader in these categories; and (4) overall the number of defendants being sued has decreased.

Read the article: 2011 Trends in Patent Case Filings by James C. Pistorino and Susan Crane.

18 thoughts on “AIA Changes The Role of the Eastern District of Texas

  1. There appears to be a typo in the second paragraph; I think this became effective last year (16 Sep 2011), not that it will become effective six months from now (16 Sep 2012, as stated).

  2. Anon is right, you’re wrong, Leopold. The retirement of judges Ward, Folsom and Everingham (Magistrate) has significantly reduced the capacity for patent litigation in E.D. Texas. The only proven plaintiff-friendly judge left in E.D. Tex. is Judge Davis, and the guy is totally overloaded with cases.

    Delaware is very plaintiff-friendly, always has been. It doesn’t suffer the stinky reputation that E.D. Texas has, but in truth, it’s about the same. The plaintiff success rate in D. Delaware is about equal to E.D. Tex., for a number of reasons. The judges there also don’t like to transfer cases to more suitable districts, and rarely if ever grant summary judgment.

  3. We recognize that, in evaluating the significance of additional steps, the §101 patent-eligibility inquiry and, say, the §102 novelty inquiry might sometimes overlap. But that need not always be so. And to shift the paten teligibility inquiry entirely to these later sections risks creating significantly greater legal uncertainty, while assuming that those sections can do work that they are not equipped to do.

    …The Government, however, suggests in effect that the novelty of a component law of nature may be disregarded when evaluating the novelty of the whole. See Brief for United States as Amicus Curiae 27. But §§102 and 103 say nothing about treating laws of nature as if they were part of the prior art when applying those sections.

    Gosh, that sounds familiar.

  4. Yes, I am loving it.

    I’m loving it too. They said that the Prometheus claims are basically the same as the Flook claims, which I’ve been saying for some time.

    I can’t wait to see how AI spins this one, especially this bit from page 3:

    Still, as the Court has also made clear, to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words “apply it.” See, e.g., Benson, supra, at 71–72.

    Benson cabins Diehr. It’s not a Federal Circuit authority on the point, but still.

  5. Prometheus LOSES.

    Prometheus lost because the recitation of a routine conventional step does not turn an unpatentable law of nature [i.e., the recited step of thinking about the law of nature] into a patent-eligible application of the law.

    From the decision (J. Breyer, for a unanimous court):

    The “wherein” clauses simply tell a doctor about the relevant natural laws, adding, at most, a suggestion that they should consider the test results when making their treatment decisions. The “determining” step tells a doctor to measure patients’ metabolite levels, through whatever process the doctor wishes to use. Because methods for making such determinations were well known in the art, this step simply tells doctors to engage in well-understood, routine, conven¬tional activity previously engaged in by scientists in the field. Such activity is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law. Parker v. Flook, 437 U. S. 584, 590. Finally, considering the three steps as an ordered combination adds nothing to the laws of nature that is not already present when the steps are considered separately.

    Yes, I am loving it.

  6. If you’re saying that I am speculating, then you are absolutely correct. What gave me away, the fact that I used the words “seems” and “suggests”?

  7. Indeed, many of the stent patent infringement cases have been filed in the District of Delaware, and I have heard from at least one such litigant that the judges in D.Del. are not keen on moving these suits to trial expeditiously.

  8. The number of plaintiffs and the number of defendants are trending in opposite directions when looking at before and after the AIA. It’s early yet, but it seems quite reasonable to blame the AIA’s joinder provisions.

    I’ll bet that you would find that the distribution of annual revenues for the defendants in patent cases has skewed up markedly as well, which would suggest that the plaintiffs are simply truncating their target lists earlier.

  9. I respectfully disagree. The Federal Circuit has signaled that they will look kindly on venue transfers, and since the AIA makes single-defendant suits more of the norm, that has to change the thinking of the plaintiffs. Why bother setting up a pretend Texas entity if the court is going to look right through the pretense anyway?

    Besides, a change in judges doesn’t explain why Delaware is the “beneficiary” of this shift. I don’t think Delaware is known for being particularly plaintiff friendly in patent lawsuits, but it certainly is a logical jurisdiction/venue for many large corporate defendants.

  10. and (4) overall the number of defendants being sued has decreased.

    Not sure this indicates anything other than there is less suing going on.

    The AIA change, in itself, won’t change the number of defendants as it merely means the number of defendants per suit has changed.

    Now if you want to say that that AIA has caused a reduction in the number of suits filed, that would be a different matter.

  11. I’m not certain the AIA has anything to do with the activity drop in the Eastern District of Texas. I suspect the retirement of “friendly” judges and magistrates in that district is the cause.

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