Supreme Court Ruling Should Spell the End of Apple's Patent Troll Battles in East Texas [Updated]

Monday May 22, 2017 9:35 AM PDT by Joe Rossignol
The Supreme Court of the United States today decided that U.S. companies may only face patent infringement lawsuits in the jurisdiction in which they are incorporated, which in Apple's case would be California.


The decision is significant for Apple, as the iPhone maker faces several patent infringement lawsuits in a single district court in Eastern Texas that is considered friendly to patent holding entities, or so-called "patent trolls."

That very court in Tyler, Texas has, for example, ordered Apple to pay $532.9 million to patent licensing firm Smartflash LLC in 2015, and $22.1 million to Acacia Research last September for infringing upon patents it acquired from Nokia.

By limiting where patent infringement lawsuits can be filed, the Supreme Court's decision means that Apple will likely be able to battle patent infringement lawsuits in Northern California, and finally put East Texas behind it.

The Supreme Court's decision today relates to a Delaware-based lawsuit between Heartland Food Products Group and The Kraft Heinz Company, but it extends to all domestic companies across the United States.

Update: The appears to be considerable confusion throughout media coverage of this ruling. The ruling narrowly limited a company's "residence" to the place of incorporation, but patent lawsuits may still be filed anywhere "the defendant has committed acts of infringement and has a regular and established place of business." As a result, it appears patent lawsuits can still be filed against Apple in many jurisdictions, including the Eastern District of Texas.

Tags: patent trials, Supreme Court
123 comments


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slprescott
25 months ago

Apple can be sued in Delaware, where it is incorporated, or anywhere else it has a regular place of business and is alleged to infringe. That would include East Texas if it has any offices or stores there.


Tomorrow's news:
"Apple announces plans to close all stores in east Texas."
Rating: 19 Votes
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WildCowboy
25 months ago

This article says Apple is incorporated in Delaware? http://www.nytimes.com/2012/07/01/business/how-delaware-thrives-as-a-corporate-tax-haven.html


That article is incorrect or unclear. They are registered in Delaware, but are incorporated in California. From Apple's investor FAQ page:


When was Apple incorporated?
Apple was incorporated in the state of California on January 3, 1977.


http://investor.apple.com/faq.cfm
Rating: 4 Votes
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topgunn
25 months ago
Looks like Judge Troll will be taking a pay cut.
Rating: 3 Votes
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Joe Rossignol
25 months ago

I did read it, but to fully appreciate a legal opinion, you really need legal experience... that's why one should read the professional interpretations as well. While I did read that one can sue where one does business, in this case, the defendant won despite doing business in Delaware. So it seems a little contradictory...


Ruling is very clear they have no business in Delaware (no offices)


Despite what The Wall Street Journal and several other media outlets are saying, I think this is accurate. I regret seemingly falling into the trap of "fake news." The difference with Apple is that it has retail stores that fall within the Eastern District of Texas, so it has an established business presence in that jurisdiction and, by the sounds of it, can be rightfully sued there for alleged patent infringement still.
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Nah just seems like y'all didn't actually read and interpret what it meant. You just wanted to put some (in this case, misguided/false) info out to get quick clicks. Typical.

I ensure you that's not the case. I was misguided by the dozen or so credible media publications that positioned this news with the angle that I also did. However, I admit that I failed to "do my homework" in this situation. I strive for factualness and accuracy at all times, so trust me when I say that this disappoints me. MacRumors has never instructed me to write articles in a manner that gets "quick clicks," and it's not something I stand for.
Rating: 3 Votes
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slimothy
25 months ago

Apple can be sued in Delaware, where it is incorporated, or anywhere else it has a regular place of business and is alleged to infringe. That would include East Texas if it has any offices or stores there.

So not just Northern California.

The fight was what "resides" means:

28 USC 1400(b):
Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

"Resides" now means "where the corporate defendant is incorporated" (e.g. Delaware). The part after the "or" hasn't changed.

Looks like MacRumors might want to update their article..... actually delete it, since this defeats the whole purpose of MR post lol.
Rating: 2 Votes
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t76turbo
25 months ago
This sounds like a very good change...
Rating: 2 Votes
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Gasu E.
25 months ago

Apple can be sued in Delaware, where it is incorporated, or anywhere else it has a regular place of business and is alleged to infringe. That would include East Texas if it has any offices or stores there.


But, the exact wording is "...or where the defendant has committed acts of infringement AND has a regular and established place of business. " To use a store to meet that requirement would mean that the infringement would have had to take place at the store. Since the only things that transpire at the store are sales and service, if those were infringing acts, than any business that sold and serviced the offending product would be equally liable. That means Best Buy could be sued for patent infringement on the same basis as Apple.

It would seem to me that infringing acts required to qualify a non-HQ site would only entail acts to incorporate the offending technology, such as manufacturing and design.
Rating: 2 Votes
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cmaier
25 months ago

('https://www.macrumors.com/2017/05/22/supreme-court-apple-east-texas/')

By limiting where patent infringement lawsuits can be filed, the Supreme Court's decision means that Apple will likely be able to battle patent infringement lawsuits in Northern California, and finally put East Texas behind it.


Apple can be sued in Delaware, where it is incorporated, or anywhere else it has a regular place of business and is alleged to infringe. That would include East Texas if it has any offices or stores there.

So not just Northern California.

The fight was what "resides" means:

28 USC 1400(b):
Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

"Resides" now means "where the corporate defendant is incorporated" (e.g. Delaware). The part after the "or" hasn't changed.

Updated: ok, looks like they are incorporated in northern california, but that doesn't change the rest of my point. They can be sued LOTS of places, including possibly eastern texas.
Rating: 2 Votes
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tennisproha
25 months ago

To clarify, patents have both "inventors" and "assignees". In my case I am listed as the "inventor" and IBM is the "assignee" (they own it). Hence, I am the "inventor" of the patent

Right you are. Sorry about my snarky remark earlier.

Congrats.
Rating: 1 Votes
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Munky
25 months ago

Tomorrow's news:
"Apple announces plans to close all stores in east Texas."

I was just in tyler this weekend. there is no Apple store there. That place is awful.
Rating: 1 Votes
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