In his oral argument for eBay v. MercExchange (2006), the late Supreme Court Justice Antonin Scalia famously called the district on which Collin and Denton Counties lie a “renegade jurisdiction.”
This quip echoed sentiments shared by entrepreneurs, tech moguls and attorneys, who have identified the United States Department of Justice’s Eastern District of Texas (EDTX) – whose Sherman Division includes Collin and Denton counties – as a hotbed for frivolous patent infringement litigation.
Patent holders who file such lawsuits despite minimal use of them are pejoratively called “patent trolls,” and critics contend that they consciously litigate in the judicial district due to the court’s perceived likelihood to provide a swift and favorable judgment to plaintiffs in patent infringement proceedings.
Researchers and legal analysts have noted that EDTX’s docket has seen fewer patent cases following the Supreme Court’s 2017 decision TC Heartland v. Kraft Foods, a case that made selective use of a court (often referred to as “forum shopping”) in patent infringement suits more difficult, but the court still remains one of the most prolific patent litigation venues in the federal judiciary.
So far in 2021, EDTX has seen over 200 patent infringement lawsuits that remain open, and they include high-profile defendants such as AT&T, Cracker Barrel, Samsung, General Motors, Hewlett-Packard, Target, Lowes, Whole Foods, Wal-Mart, Best Buy, Chick-Fil-A and Netflix.
But perhaps some of the most notorious patent litigations on EDTX dockets have been those filed against Apple who, according to records from watchdog database MaxVal's Patent Litigation Databank, was the defendant in 194 of the court’s infringement cases. In March alone, Apple was ordered by an EDTX jury to pay $308.5 million in damages after it found that the company infringed on a media decryption patent. In August 2020, another jury in the district ordered Apple to pay $506.2 million in royalties for a patent related to 4G technology.
The prolific nature of these cases has aroused speculation from various sources that the tech giant closed its Apple Store locations at Frisco’s Stonebriar Mall and Plano’s Shops at Willow Bend for the purpose of exiting the court’s jurisdiction, thereby encountering fewer patent infringement lawsuits. Apple has not identified the precise reason for the closure of these stores, and a request for comment on the matter has not been returned.
Nonetheless, activists and entrepreneurs argue that patent trolling has a clearly subversive economic impact. In May 2020, digital rights advocacy group Electronic Frontier Foundation (EFF) rebuked, “Patent trolls don’t care much about innovation. Their lawsuits and threats are attempts at rent-seeking; they’re demanding money from people who make, use or sell technology just for doing what they were already doing — for crossing the proverbial ‘bridge’ that the patent troll has decided to lurk under.”
One of the most famous voices of patent reform has been Dallas Mavericks owner Mark Cuban, who donated $250,000 to EFF in 2012 to aid its anti-patent trolling advocacy. The billionaire entrepreneur’s stance on patent trolling obtained more publicity in 2013 when he and EFF hired an attorney to assume the role of “The Mark Cuban Chair to Eliminate Stupid Patents.”
Still, Cuban said he does not blame EDTX for its reputation among “patent trolls.”
“I can only tell you from the outside looking in that it appears to be a great industry for EDTX,” Cuban said in an email to Star Local Media. “It’s actually smart on their part. It’s not their fault that patent laws are ridiculous and sometimes not in [the] interest of the country.”
Joe Brown, a Sherman-based attorney who served as United States Attorney for EDTX from 2018 to 2020, opined that the court does not encourage or discourage the practice of forum shopping in patent infringement cases.
“They decide venue fights based on the facts they are given and the venue laws as written,” he said. “The judges in the EDTX are, from what I can tell, proud of the reputation they have for being knowledgeable in the patent world and efficient in their administration of cases. But they enforce venue provisions as they are written by Congress, and Congress has had plenty of opportunity to make changes over the years and has not.”
A representative from EDTX did not respond to a request for comment.