Delaware: Not Just for Incorporation Anymore

Submitted by patentadmin on Mon, 10/31/2011 - 23:43

The anti-joinder provision of the America Invents Act - about which we've written in a recent blog entry and a Patent Infringement News story - is expected to have a chilling effect on litigation brought by so-called "patent trolls." That's because instead of suing several defendants at once, patent owners must file a separate lawsuit for each individual infringer. And the jurisdiction that will likely see the biggest reduction in lawsuit filings as a result of the AIA is the U.S. District Court for the Eastern District of Texas.

Long known for being a venue that is friendly to patent owners, the Eastern District of Texas' lawsuit filings in 2010 with new defendants outnumbered new filings in every other federal district. And the number of new defendants in those filings (3,879) represents a 70 percent increase from 2009. (Hat tip: Findlaw)

The next highest number for new defendants came from the District of Delaware, but that number (884) is almost 3,000 defendants short of the Eastern District of Texas for the same time period. And over 25 percent of the defendants sued in new patent cases in 2010 were sued in the popular Texas district - which is known for having plaintiff-friendly local court rules and a high success rate at trial for patent owners.

Still, there are those who predict that with the anti-joinder provision now a part of patent law, the bloom will soon be off the rose for the Eastern District of Texas. And as the runner-up in the new defendant race, the District of Delaware may become the new star of patent litigation venues.

Why choose Delaware? There are several reasons*. For starters, many companies are incorporated there - making it easy to establish jurisdiction. The Delaware court also has a reputation for speedy scheduling of litigation and trials, as well as denying defendants' summary judgment motions and opting for jury trials instead - and juries generally tend to be pro-patent and anti-infringer. It is also difficult for defendants to have cases transferred out of the District of Delaware into other venues that would give them a better advantage.

Delaware has gotten some of its patent litigation action in recent years because the Eastern District of Texas was simply flooded with patent cases - and Delaware handled the overflow. But from this point on, the Eastern District of Texas' popularity with patent owners may partly depend on how much of a chilling effect the AIA's anti-joinder provision has on patent lawsuit filings.

And if that happens, the District of Delaware will be ready and waiting for new cases.

*See "Texas Hang-Ups May Boost Patent Suits in Delaware" by Erin Coe, Law360, May 29, 2009.

Submitted by Anonymous (not verified) on Tue, 11/15/2011 - 08:31


The new disjoinder rules in the AIA / patent reform legislation should help significantly in reducing the scourge of patent trolls. At least Congress has done something on the NPE/PAE issue, even if somewhat indirectly.

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