Predictably Expensive: A Critical Look at Patent Litigation in the Eastern District of Texas

Abstract

In this Article, we compare U.S. patent litigation across districts and consider possible explanations for the Eastern District of Texas’ popularity with patent plaintiffs. Rather than any one explanation, we conclude that what makes the Eastern District so attractive to patent plaintiffs is the accumulated effect of several marginal advantages — particularly with respect to the relative timing of discovery deadlines, transfer decisions, and claim construction — that make it predictably expensive for accused infringers to defend patent suits filed in East Texas. These findings tend to support ongoing efforts to pass patent reform legislation that would presumptively stay discovery in patent suits pending claim construction and motions to transfer or dismiss. However, we also observe that courts in the Eastern District of Texas have exercised their discretion in ways that dampen the effect of prior legislative and judicial reforms that were aimed (at least in part) at deterring abusive patent suits. Given courts’ broad discretion to control how cases proceed, this additional finding suggests that restricting venue in patent cases may well be the single most effective reform available to Congress or the courts to limit patentees’ ability to impose unnecessary and unwarranted costs on companies accused of patent infringement.

Keywords: Eastern District of Texas, TC Heartland, VENUE Act, Innovation Act, patent troll, patent assertion entity, PAE, NPE

JEL Classification: O34, K41