PublishedSeptember 24, 2020

Forum Selling and Judge Shopping—How Two Texas Districts Compete For NPE Cases

Map of the Western District of Texas

Judge Gilstrap of the infamously NPE-friendly Eastern District of Texas used to handle one out of every four patent cases in the entire United States.  The Eastern District as a whole handled more than 40% of all patent cases nationally, despite only having about 1% of the nation’s population.

After the Supreme Court’s 2017 decision in TC Heartland, which reined in rampant forum-shopping, that number dropped significantly. Judges in the Eastern District have certainly done their best to hold onto cases, however.  Even after TC Heartland, the Eastern District continues to see approximately 10% of all patent litigation.  

But patent plaintiffs, especially NPEs, didn’t have to go very far to find their next home.  Enter the Western District of Texas.  After Judge Albright took the bench in 2018, he immediately set out to attract patent cases to his court, with tremendous success.  In fact, one in five patent filings this year is estimated to wind up in the Western District of Texas, and according to a new paper, more than 85% of those cases were filed by NPEs.

Almost all of these cases will be heard by Judge Albright.

“[T]o compete for litigants, courts must adopt rules or procedures or make rulings that blatantly benefit plaintiffs, who choose the forum.”

In a new paper entitled Federal Judge Seeks Patent Cases, Profs. Jonas Anderson and Paul Gugliuzza argue that this is an example of “forum selling” or “court competition.”  Judges Albright and Gilstrap “are in the midst of a vigorous competition to attract patent cases to their courtrooms.”  And in order to “compete for litigants, courts must adopt rules or procedures or make rulings that blatantly benefit plaintiffs, who choose the forum.”

Anderson and Gugliuzza set out four facets of Judge Albright’s courtroom that form the core of his approach to attracting plaintiffs—”fast track” trial scheduling that “essentially eliminates the prospect of PTAB review”, “staunch refusal” to transfer cases out of the district, unwillingness to stay cases, and “questionable interpretations and applications of binding appellate case law on the issues of venue and patent eligible subject matter.”  This approach, which Anderson and Gugliuzza characterize as “tilting the field in favor of patentees”, is backstopped by the Western District’s case-assignment process, ensuring that any case filed in the Waco Division will be assigned to Judge Albright.

“Judge Albright’s procedural practices are designed mainly to process cases as quickly as possible—except when it is defendants who want a quick dismissal on eligibility grounds.”

Anderson and Gugliuzza also detail Judge Albright’s problematic approach to patentable subject matter.  In particular, they describe his refusal to address eligibility before claim construction and his lack of substantive analysis of eligibility in his eligibility decisions.  In one example, Slyce Acquisition, the order addressing defendant’s motion to dismiss on eligibility grounds “contain[ed] no actual analysis of whether the patent in suit satisfied the eligibility requirement”—even though it “devot[ed] nearly ten pages to the topic of eligibility.”  This is just one example of his unwillingness to apply Supreme Court eligibility precedent.  Anderson and Gugliuzza also describe a series of orders that Judge Albright used “to send additional signals to patentees that their patents are safe from quick eligibility invalidations in his court.”

“Judge Albright’s overwhelming and instantaneous success at attracting patent cases to Waco should concern observers of the federal courts— including Congress.”

The net result of all this, per the paper, is the Western District “winning the competition for patent cases”—and that success is “largely the result of Judge Albright’s appeal to patent plaintiffs—especially non-practicing entities.”  And, while the paper does not address this directly, such a success is likely to breed imitation.  Similar procedural approaches may arise in other district courts where judges wish to attract patent litigants.  The Eastern District of Texas continues to try to limit transfers of cases and to minimize the number of stays issued, perhaps as an attempt to win back litigants who have moved to the Western District of Texas.  Combined, more than 30% of all U.S. patent cases filed in 2020 were filed in the Eastern and Western Districts—more than were filed in the states of California, Illinois, Massachusetts, Michigan, and New York combined.

It doesn’t have to be this way.  Anderson and Gugliuzza suggest two reforms that would mitigate the court competition concern—random assignment of cases to the judges within a district, rather than within a division, and basing venue on the division in which a case is brought, rather than the district.  The first reform would prevent plaintiffs from selecting a specific judge by distributing cases out across all of the judges in a district, while the second reform would prevent plaintiffs from filing in locations with no real nexus to the defendant simply because the defendant might have operations in a different portion of the district, potentially half a state away.

As the Anderson/Gugliuzza paper notes, “[t]hese solutions are common sense and simple to implement. If courts will not make them on their own, Congress or the Judicial Conference should require that they do so.”

Josh Landau

Patent Counsel, CCIA

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

Follow @PatentJosh on Twitter.

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