From The Economist:
In 2019 a federal judge named Alan Albright gave a presentation to a group of lawyers. His courthouse in Waco, Texas, where he is the only judge, sits near a sweet shop. The talk was called “Why You Should File Your Next Patent Case Across the Street from the ‘Hey Sugar’”.
The intellectual-property lawyers who heard his pitch were apparently persuaded. Less than two years after being appointed to the bench, he had nearly 20% of the country’s patent cases, according to Lex Machina, a legal-analytics firm. By 2021, he had 23%. Trial teams of white-shoe attorneys from New York and California, representing clients such as Google and Intel, began streaming into Waco, a city of 140,000 people in central Texas.
Bill Wetterman, a real-estate developer and Waco native, spotted a business opportunity. In 2021 he opened up Legal Lawfts, rentable office space—“war rooms”, in the parlance—that come outfitted with security cameras, back-up internet and, by request, gluten-free Oreos.
In Waco Mr Wetterman’s competitors include Connect Litigation, a firm that runs a few war rooms downtown. But Connect focuses its operations about 200 miles north-east. The “patent docket” is a familiar term in Marshall, a faded but quaint town of about 24,000 people near the Louisiana border. Between 2000 and 2020, more than 17% of all patent cases filed in federal court were in the Eastern District of Texas—roughly 13,500. By comparison Delaware, where most big American companies are incorporated, had fewer than 10,000 cases; the Northern District of California, where Big Tech firms are based, had fewer than 5,000.
T. John Ward, Marshall’s federal judge from 1999 to 2011, is responsible for the town’s puzzling popularity. Patent cases are technical. Judges must referee the sharing of sensitive source code, for example: plaintiffs argue it will prove their case; defendants resist, fearing their secrets will leak. They also interpret what a patent’s words actually mean, which can be “outcome determinative”, says Mark Siegmund, a patent litigator in Waco. Cases can also take years to get to trial.
Mr Ward learned that Northern California’s court had implemented local rules to build what lawyers call “certainty”—a predictable process—into the unwieldy cases. He adopted similar ones, tweaking them to prioritise speed. Litigants reached trial in half the time it took in California. Around the same period, “it also happened that there was an explosion of patent-troll litigation,” says Paul Gugliuzza of Temple University, referring to plaintiffs who own bad patents and seek quick and cheap settlements. By the mid-2010s Mr Ward’s successor, Rodney Gilstrap, had about a quarter of the country’s patent cases.
Patentsville, USA
The caseload in Marshall books up the courthouse and boosts businesses downtown. One hotel bought a subscription to pacer, an online database for court records, to keep track of potential clients. In an apparent bid to make locals (read: jurors) like it more, Samsung, a frequent defendant, sponsored an ice rink across from the courthouse. TiVo spent $10,000 on a champion steer at a livestock auction, and named it TiVo.
This sits uneasily with some. Federal judges are meant to be generalists, and courts are not supposed to power their local economies. And the rules “tend to be more plaintiff-friendly”, says Andrew Russell, a patent litigator in Delaware. Defendants often try to transfer their cases elsewhere. But that is partly because the speedy tempo suits plaintiffs, as deep-pocketed defendants can afford to drag out litigation. Early on, verdicts in the Eastern District were lopsided, because the posh defence lawyers were “terrible” at arguing before juries, says Michael Smith, a longtime patent litigator in Marshall. Verdicts in the Eastern District now conform to national averages; in Waco, defendants actually win more, according to Lex Machina.
But the optics in Marshall were sufficiently bad that in 2017 the Supreme Court made it harder, in effect, for plaintiffs to file lawsuits there, by requiring defendants to have “regular and established” business where they are sued. Apple shut down its nearby stores. (Samsung did not and, despite the ice-rink, was hit with a $303m jury verdict in Marshall last year.)
By 2021 Waco’s patent docket—similarly speedy, thanks to local rules—was attracting scrutiny, too. John Roberts, the chief justice of the Supreme Court, acknowledged senators’ concerns about the “extreme concentration of patent litigation” there. Starting in 2022 Waco patent cases were required to be put into a lottery, so that any of the Western District of Texas’s 12 judges could draw them. In 2023 fewer patent cases were filed overall, and Waco saw a steep drop-off.
Link to the rest at The Economist
PG isn’t going to deluge visitors to TPV with patent, trademark, trade secrets and other types of intellectual property beyond copyright, but the Waco story illustrates how intellectual property laws can be turned into something he doubts the creators of US intended as they have revised and updated IP laws over the years.
For the record, PG’s opinion is that the Supreme Court should have intervened earlier. While federal law and rules permit Federal District judges to hear patent infringement lawsuits, there is a specialized court located in Washington, DC, that would likely do a better job.
At present, the Patent Trial and Appeal Board is part of the US Patent Office.
The PTAB currently only reviews rejections made by examiners in proceedings called ex parte appeals and decides patentability questions for issued patents raised by third parties in proceedings called AIA trials.
While these duties are different from a patent infringement lawsuit, the judges in the PTAB are experts on patent law. To the best of PG’s knowledge, each of the judges are drawn from experienced patent attorneys. In order to become a patent attorney, an individual must have gained at least an undergraduate degree in a technology subject.
A patent attorney must have received a Bachelor’s Master’s or PhD in a Recognized Technical Subject. Examples of Recognized Technical Subjects include Aeronautical Engineering, Engineering Physics, Electrical Engineering, Metallurgical Engineering, Petroleum Engineering, Marine Engineering, etc., etc
After obtaining a degree in a recognized technical subject, a patent attorney must then go to law school, graduate, then take and pass a difficult patent bar examination. Year in and year out, only about 50% pass the patent bar exam.
A federal district court judge is nominated by the President and confirmed by the United States Senate. How does the President decide who would be a good district judge?
Invariably, if there is an opening for a new District Judge in Wyoming, Wyoming’s Senators and the state’s single Congressional representative will recommend a Wyoming state judge or a Wyoming attorney to the President. If nothing nasty shows up on a background check, the President will be quite likely to nominate the person suggested by the Senators and Representative.
The new District Judge may have spent her/his legal career exclusively in Bankruptcy Courts, divorce litigation or medical malpractice lawsuits.
Does the new District Judge know anything at all about patent law? Nope.
It is possible the first patent case the District Judge hears will involve a patent infringement claim regarding a sub-system in a nuclear-powered electrical generation plant. Bankruptcy law will not be much help for the Judge.
There’s a similar problem in copyright law: It has historically tended to be made in one of three locations, and although slightly less so today it still disproportionately is made there:
• New York, and specifically Manhattan for both the trial court and the first round of appeals. This is not where the creators were/are, but where publishers tended to be.
• Nashville, at the trial level and a few miles up the road in Cincinnati for the first round of appeals. This is also not where the creators of music were/are, but where music publishers tend to be.
• Los Angeles, at the trial level and often in the Pasadena adjunct courthouse of the court of appeals in San Francisco. This is, more than the other two, where many of the creators of film and television were/are, and where film and television distributors are or at least have a substantial proportion of their operations and decisionmakers.
Some of this is because the unsophisticated see choice-of-law clauses and assume that means that location is the best place to have a lawsuit heard — mistakenly assuming that those choice-of-law clauses are always enforceable, or that lawyers very far away from there won’t have access to all of that law. And some of those “unsophisticated” are lawyers…
Interesting info, C. Each of those locations is in a location where a lot of money depends upon the enforcement of copyright law.
California has more lawyers than can be found in a mid-sized nation with New York coming in second, but I would have overlooked Nashville/Cincinnati, forgetting the money machine country music has become.