(Adds detail from arguments, paragraphs 6-10)
By Andrew Chung
WASHINGTON, March 27 The U.S. Supreme Court on
Monday struggled over whether to upend nearly 30 years of law
governing patent lawsuits that critics say allows often-baseless
litigants to sue in friendly courts, giving them the upper hand
over high-technology companies such as Apple Inc and
Alphabet Inc's Google.
The justices heard an hour of arguments in an appeal by
beverage flavoring company TC Heartland LLC to have a patent
infringement suit brought against it by food and beverage
company Kraft Heinz Co moved from federal court in
Delaware, where it was filed, to Heartland's home base in
Indiana. TC Heartland is challenging a lower court ruling
denying a transfer to Indiana.
Even though the case did not involve a lawsuit filed in
Texas, the arguments involved the peculiar fact that the bulk of
patent litigation in the United States is occurring in a single,
rural region of East Texas, far from the centers of technology
and innovation in the United States.
Critics have said the federal court there has rulings and
procedures favoring entities that generate revenue by suing over
patents instead of making products, sometimes called "patent
The outcome of the TC Heartland case could be profoundly
felt in the East Texas courts. The justices could curtail where
patent lawsuits may be launched, limiting them to where a
defendant company is incorporated and potentially making it
harder to get to trial or score lucrative jury verdicts.
The U.S. Court of Appeals for the Federal Circuit in
Washington last year denied the transfer request by TC
Heartland, a subsidiary of Heartland Consumer Products Holdings,
relying on one of its precedents from 1990, which loosened the
geographic reins on patent cases.
On Monday, the justices acknowledged the difficulty of
changing the rules at this stage. "When 30 years of practice
goes against you, what happens?" Justice Elena Kagan asked TC
Heartland's attorney, James Dabney.
Dabney said the high court previously ruled in 1957 that
patent cases are governed by a specific law allowing suits where
defendants are incorporated.
Responding to a Kraft attorney's argument that the U.S.
Congress later amended venue rules to cover all cases, Chief
Justice John Roberts suggested the changes were minor.
More than 40 percent of all patent lawsuits are filed in
East Texas. Of those, 90 percent are brought by "patent trolls,"
according to a study published in a Stanford Law School journal.
(Reporting by Andrew Chung; Editing by Will Dunham)