Fixing Forum Selling
27 Pages Posted: 5 Mar 2017 Last revised: 9 Apr 2017
Date Written: March 4, 2017
“Forum selling” is jurisdictional competition intended to attract litigants. While consensual forum selling may be beneficial, non-consensual forum selling is harmful, because it encourages jurisdictions to adopt an inefficient pro-plaintiff bias. In the last 20 years, the Eastern District of Texas has adopted an aggressive and remarkably successful policy of non-consensual forum selling in patent infringement actions. In 2015, 44% of all patent infringement actions were filed in the Eastern District of Texas, and 93% of them were filed by patent assertion entities or “patent trolls.”
In December 2016, the Supreme Court granted certiorari in TC Heartland v. Kraft, to consider the definition of corporate residence for the purpose of patent venue. If the Court adopts the narrow definition suggested by TC Heartland, it would effectively prevent the Eastern District of Texas from engaging in non-consensual forum selling in patent actions. However, it could also unduly restrict patent venue. This essay argues that the Court could stop non-consensual forum selling in patent actions by requiring district courts to decide motions to transfer venue before ordering discovery and stay discovery pending appeal of that decision. This would not only stop non-consensual forum selling in patent actions without limiting the scope of patent venue, but also prevent non-consensual forum selling from arising in other kinds of actions. And it would make litigation more efficient by ensuring that actions reach the appropriate district as quickly as possible.
Keywords: patents, forum shopping, forum selling, TC Heartland, TC Heartland v. Kraft, SCOTUS, Supreme Court, patent trolls, patent assertion entities, PAEs, civil procedure, patent venue, venue
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