By on March 28, 2017

supreme-court

A Supreme Court ruling between two food companies may benefit the Detroit Three and its many domestic suppliers.

The case of TC Heartland LLC v. Kraft Foods Group Brands focused on where plaintiffs in an intellectual property or patent infringement dispute can file a lawsuit. Current U.S. law dictates that the plaintiff may file a patent infringement suit in any court district where the defendant does business. This has saturated the Eastern District of Texas with countless patent and I.P. lawsuits. Plaintiffs prefer the region because rural Texas juries are more likely to rule against big businesses and the district is known for expediting proceedings.

According to a January study by the Stanford Technology Law Review, only about 15 percent of cases heard in the court actually involved a patent invented within the district or had an accused party that had an office in the area. However, the Supreme Court is expected to put the kibosh on the practice by forcing plaintiffs to try cases near the defendant’s headquarters — meaning domestic automakers could have the home field advantage in future legal proceedings. “The U.S. court system is set up to give the defendant an advantage of being at home, except in these cases,” said Joseph Barber, a Royal Oak-based IP attorney, speaking to Crain’s Detroit Business. “Patent trolls were really able to manipulate the system down in Texas with the use of a quick court that hindered a defendant’s prep time and [less sophisticated] rural jurors.”

Assuming the Supreme Court rules in favor of changing the jurisdiction guidelines, Detroit automakers will also save on legal fees. The Eastern District of Texas mandates the use of a local lawyer, so automotive companies typically keep some on retainer while also sending highly-paid consultants from other firms nearer to their home base.

Barber believes that the Eastern District of Michigan court could see as many as three dozen additional patent cases annually if the Supreme Court rules against venue shopping, with more to come as vehicles continue to adopt more technology.

“Cars are becoming computers on wheels,” Barber said. “Moving these cases to Detroit would provide [automakers] a more knowledgeable bench of judges and stable of jurors, many of which are engineers understanding the complex nature of these cases.”

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24 Comments on “Supreme Court Case Could Make Patent Lawsuits Easier on Domestic Automakers...”


  • avatar
    SCE to AUX

    So much for blind justice. But, in truth, she’s always had one eye open.

  • avatar
    OldManPants

    Wow, this is funny. Yee-Haw Law. Like putting some guy from… what… Oklahoma or someplace in charge of the EPA climate scientists.

    • 0 avatar
      Lou_BC

      I need to recuse myself from this discussion as I fear I may say something that will get me banned ;)

      • 0 avatar
        OldManPants

        Nah… most everyone’s driving or having dinner right now. Go on!

        Or throw your voice to the pooch. Nobody would ban a dog!

        • 0 avatar
          28-Cars-Later

          #dogbonesmatter

          • 0 avatar
            Lou_BC

            Potty talk from a Lavatory Retriever ;)

          • 0 avatar
            OldManPants

            “Ruck Roo!” ain’t gettin’ nobody in trouble.

          • 0 avatar
            Lou_BC

            Hey, I speak bowser!

          • 0 avatar
            28-Cars-Later

            And now for something completely different.

            How is the BC real estate market outside of Vancouver, Lou?

          • 0 avatar
            highdesertcat

            “How is the BC real estate market outside of Vancouver, Lou?”

            I’m interested as well. We’ll be going to Vancouver, BC, Canada, for an extended stay at the end of June to spend the summer months there.

            Who knows, if the price is right, I may invest in a small vacation home in Vancouver, BC, Canada like I did in Ensenada, BC, Mexico.

            Ensenada was a winner!

          • 0 avatar
            Lou_BC

            @28-Cars-Later – it is all pretty solid. Nothing as crazy as what was going on in the Vancouver region. My home has gone up 10-15k per year in market value.

          • 0 avatar
            28-Cars-Later

            Thanks

            “My home has gone up 10-15k per year in market value.”

            This seems like quite a bit to me but if your property is worth 500K CAD it is a tad more in line with expectations.

          • 0 avatar
            Lou_BC

            @28-Cars-Later – my place is small, around 2200 sq ft total and is 35 years old. It was assessed at 260k this spring. New houses are around 450 – 550k at almost double the size.
            I was reading that a lot of the smaller towns in the Central Interior and North aren’t doing all that well and market prices are much softer. My in-laws house is slightly larger than mine but is valued at 160k.
            Some of the oil towns in the North East have been hit fairly hard with the oil industry downturn but not as bad as what we’ve seen in Alberta.

          • 0 avatar
            mikey

            Housing costs in Vancouver and Toronto have gone insane. Its all supply and demand. A complete sellers market.

            So I could 3 times what it cost me to build the place 18 years ago. It doesn’t do me any good. Its great to be a seller, but no fun to be a buyer.

          • 0 avatar
            28-Cars-Later

            @lou

            I’m in the process of buying an 1150ish sq ft 65yo property, so I’ll take your young “small” house any day you don’t need it.

            @mikey

            Something similar going on in my neck of the woods only the amounts are not as pronounced as what I have read about Toronto and Vancouver.

          • 0 avatar
            Lou_BC

            That housing bubble has got to burst soon. I feel sorry for those people in big cities in a 2 million dollar house that is going to retail for 500k.
            This is a news story on the cheapest 5 homes sold in Vancouver in 2016. In all honesty, they are just building lots with some extra garbage to clear.
            ht tp://global news. ca /news/3259858/top-5-cheapest-homes-sold-in-vancouver-in-2016-compared-to-2006/

  • avatar
    chuckrs

    “a more knowledgeable bench of judges and stable of jurors, many of which are engineers understanding the complex nature of these cases.”

    Judges and jurors knowledgeable in the arcana of patent claims and their underlying engineering/scientific basis? That is laugh out loud funny.

    Engineers understanding the complex nature of these cases? Gone in voir dire. Seriously, what plaintiff attorney is going to let an engineer who is so much as capable of driving a car near the jury box?

    • 0 avatar
      highdesertcat

      “Gone in voir dire.”

      Yup.

      Justice is actually a highly political animal, and far from blind.

      Biased is more likely, with judges legislating from the bench, even in auto cases.

      If justice was truly impartial, GM would not have gotten off so lightly with the faulty ignition key-lock case, and Toyota would not have been crucified because of faulty CTS gas pedals.

  • avatar
    George B

    I worked for a startup company that legitimately filed a patent infringement lawsuit in the Eastern District of Texas. The Sherman Division covers Collin and Denton counties which include the northern suburbs of the Dallas-Fort Worth Metroplex and Toyota’s headquarters. The President of my company got to drive his BMW 740 to court every day from his lake house on Texoma while the employees for the California company that infringed the patent had to live out of a motel room during the trial. During discovery, I remember burying their lawyers with test data printed on 35 reams of paper.

    • 0 avatar
      chuckrs

      Apropos of nothing automotive, but at least bloggy and concerning jurisdiction, here’s a link from Instapundit – you won’t need to read beyond the title/heading.

      http://tinyurl.com/lm69a92 or http://preview.tinyurl.com/lm69a92 for the paranoid.

      BTW, it was a jury in nearby Alabama that awarded some doctor millions of dollars for a bad paint job on a BMW? The Supremes knocked it down.

  • avatar
    Erikstrawn

    “the Supreme Court is expected to put the kibosh on the practice by forcing plaintiffs to try cases near the defendant’s headquarters”

    For legal purposes our headquarters is in Detroit. For tax purposes our headquarters is in Jamaica. For marketing purposes our headquarters is in sunny California. For investment purposes our headquarters is in Silicon Valley…

  • avatar
    05lgt

    I seem to have overheard differing explanations for the popularity or East texas Courts somewhere, something about judges who value the community income from the local lawyer rule and general corruptness. Not sure where I heard it and I certainly have no opinion of my own on the topic.

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