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Home / News / Blog
How the TC Heartland decision helps free and open source software
byTony Sebro
on May 23, 2017
Yesterday, the United States Supreme Court published a decision that is likely to make it
harder for patent holders to use frivolous infringement lawsuits to extort
settlement fees. In the TC
Heartland LLC v. Kraft Foods Group Brands LLC case, the Court ruled that
patent holders can only file suit in the jurisdiction where the alleged
infringer is incorporated. Prior to TC Heartland, US patent holders
had more flexibility to file suit in multiple jurisdictions, and as a result
would often select seemingly unrelated jurisdictions for strategic reasons.
The Eastern District Court in Texas is, by far, the most popular venue in
the United States for patent holders to file suit, due to its reputation for
plaintiff-friendly judges and aggressively brisk (and, therefore, cheaper)
litigation schedules. The United States federal court system has ninety
four district courts, yet over a third of all patent litigations filed in the United States in the first quarter
of 2017 were filed in the Eastern District. And, traditionally, the overwhelming majority
of such cases filed in the Eastern District have been brought by non-practicing entities ("NPEs"; unaffectionately
known as "patent trolls") —
patent holders who enforce patents without being engaged in the
business of selling the inventions disclosed in the patents. The media has covered
the remarkable
growth of a cottage industry centered around patent litigation
in Marshall, Texas, the small town where the Eastern District is located.
Many NPEs have built their business models around the economies of scale and
efficiencies of pushing frivolous suits through this single venue.
Hopefully, the fresh burden of having to file suit on a defendant's "home turf" will
reduce the volume of nuisance patent litigation — and disrupt the
business models that fund it.
As a public charity, Conservancy is not a traditional target for NPEs:
we don't generate the kind of product-related revenue streams that NPEs
typically hold for ransom in exchange for quick settlement payments. That
said, we acknowledge that the threat of NPE litigation casts a shadow on the entire
technology sector, including on free and open source communities. We believe
that community-vetted free and open source licenses are sufficient to
create a pool of explicit and/or implied patent licenses between contributors
and users. But, that hasn't stopped many a nervous in-house counsel from
using layers of extraneous paperwork to reduce the patent exposure
they think participating in a free and open source software project may
create. We hope that the TC Heartland decision sends a signal to
would-be NPEs that the US judiciary will no longer be as complicit in
facilitating nuisance patent litigation. We also hope that software
developers and users of all types are encouraged by the decision, and are less likely to
allow fear, uncertainty, and doubt around NPE patent exposure chill their
participation in free and open source software communities.
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Tags:
patent,
law
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