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SCOTUS issues important decision concerning patent lawsuits - II

Last week, our blog spent some time discussing how a 1990 decision by the U.S. Court of Appeals for the Federal Circuit regarding where patent infringement actions may be filed has now resulted in a flood of lawsuits -- many of them dubious in nature -- in jurisdictions known for being sympathetic to plaintiffs.

We'll continue this discussion in today's post, examining how the recent decision by the Supreme Court of the United States in TC Heartland v. Kraft Foods Group Brands has essentially ended this practice of forum shopping in patent litigation.

The case revolved around Heartland's production of liquid water flavoring or enhancers, which Kraft alleged infringed on a patent it held for its own line of liquid water enhancers.

Kraft filed the patent infringement lawsuit in the federal court in Delaware, but Heartland attempted to have it transferred to Indiana, the location of its corporate headquarters, arguing that 98 percent of its sales occurred outside Delaware and that it had no corporate presence there.

These arguments proved unavailing, however, with the federal court in Delaware denying the transfer based on the aforementioned 1990 decision and the Federal Circuit affirming.

The matter ultimately came before the U.S. Supreme Court, which unanimously reversed last week, holding that a potentially determinative decision it handed down back in 1957 had not been subsequently altered by Congress or the courts, and was therefore still controlling.

This 1957 decision held that patent infringement lawsuits can only be filed where a defendant actually resides, which in the case of corporations, is their state of incorporation. In other words, the lawsuit against Heartland had to proceed in Indiana.

As we stated earlier, the ruling has been hailed by both major corporations and legal experts, who assert that it will help stem the number of lawsuits filed by patent trolls, who will likely see their abilities to prevail severely compromised.

"[SCOTUS' decision] deals a severe blow to non-practicing entities or ‘patent trolls,’ and shifts home court advantage to companies accused of patent infringement,” said one intellectual property specialist.

It will be interesting to see what transpires going forward …

Consider speaking with an experienced legal professional if you have questions or concerns relating to intellectual property.

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