Supreme Court Ruling on “Patent Trolls” is Good News for Tech

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Photo image: Dailykos

On Monday, May 22nd, the U.S. Supreme Court, ruled in a case, TC Heartland v. Kraft Foods, that will dramatically impact technology companies across the country despite the fact that the case came out of the packaged food industry.

At issue was the interpretation of a 1948 law that dictated the geographic location where a patent infringement complaint could be filed. Because of various amendments and interpretations of that law, patent lawsuits could he heard anyway where the defendant conducted business, leading to so-called “jurisdiction shopping.” As a result, certain jurisdictions became known as “plaintiff-friendly” and saw a surge of patent infringement claims by non-practicing entities, companies that hold many patents but generate income not from goods or services but rather from lawsuits or legal settlements.

The Supreme Court’s unanimously ruled to put an end to this jurisdiction shopping by interpreting the original 1948 law and a subsequent Supreme Court decision to mean that claims must be filed where the defendant is headquartered, not where the plaintiff chooses. Although this ruling does not fully address all of the issues that tech companies have with NPE lawsuits, it is a major win in leveling the legal playing field.

For more details, read the Washington Post and New York Times summaries of the decision.