This week, the U.S. Supreme Court announced a decision that might be the most important for innovation than anything else that happens this year. They ruled unanimously that patent trolls can’t file lawsuits anywhere they want. For years, anybody with a patent, that wanted to file a frivolous lawsuit against a big corporation, would take them to court in the Eastern District of Texas. Why? Because the judges there were perceived as more friendly to these “patent trolls” than anywhere else in the U.S.
About 40 percent of patent cases last year were filed in the tiny town of Marshall, Texas, which has only 25,000 residents. An amicus brief in the lawsuit said about Texas that “local practices and rules depart from national norms in ways attractive for incentivizing settlement for less than the cost of litigating the early stages of patent cases.” What that means is that the big companies often settle out of court, essentially paying extortion fees to the patent troll, simply to avoid the expense of defending themselves in Eastern Texas, knowing that the courts there usually side with the plaintiff. It’s called “venue shopping.” And with this decision, it stops.
Patent trolls block collaboration and innovation. Take a look at why, in my book Group Genius.