Academics Urge 'Caution' on Patent-Focused Venue Bill

George Mason University Center for the Protection of Intellectual Property Senior Scholar Adam Mossoff and 27 other U.S. academics jointly urged the leaders of the House and Senate Judiciary committees Monday to “exercise caution” in considering the patent litigation-focused Venue Equity and Non-Uniformity Elimination (Venue) Act. (S-2733), filed in March (see 1603180057). The legislation would revamp rules for placement of patent infringement lawsuits in federal courts, requiring at least one of the parties involved in the suit be connected directly to the jurisdiction in which the lawsuit is filed. House Judiciary Chairman Bob Goodlatte, R-Va., has said he isn’t opposed to narrowly focused patent bills like S-2733 but prefers to focus on his more comprehensive Innovation Act (HR-9), which also addresses patent litigation venue issues (see 1603250056). A “cautious stance” on bills like S-2733 is needed until the effects of the establishment of the Patent Trial and Appeal Board and other changes to the patent system enacted via the 2011 America Invents Act “are better understood,” the academics said in their letter to Goodlatte and other House and Senate Judiciary leaders. Although calls for revamping venue rules sound plausible because of the high concentration of patent infringement suits in the U.S. District Court for the Eastern District of Texas, the push for bills like S-2733 primarily is coming from tech firms and online retailers “that would rather litigate in a small number of more defendant-friendly jurisdictions,” the academics said. They said other arguments in favor of S-2733 “do not stand up to scrutiny,” including claims the bill would spread lawsuits to other courts around the country. Some S-2733 supporters “have found that restricting venue in a manner similar to the VENUE Act would likely result in concentrating more than 50% of patent lawsuits in just two districts: the District of Delaware (where most publicly traded corporations are incorporated) and the Northern District of California (where many patent defendants are headquartered),” the academics said. S-2733 would “raise costs for many patent owners by requiring them to litigate the same patent against multiple defendants in multiple jurisdictions, increasing patent litigation overall,” the academics said: The bill also “encourages the manipulation of well-settled venue rules across all areas of law by the self-serving efforts of large corporate defendants that seek to insulate themselves from the consequences of violating the law. By enacting the Venue Act, Congress would send a strong signal to corporate defendants that they can tilt the substantive playing field by simply shifting cases to defendant-friendly jurisdictions.”