Law.com/The Recorder on the movement to curb venue-shopping in intellectual property litigation, a reaction in part to the rise of the plaintiff-friendly little jurisdiction of Marshall, Texas, as noted in our posts of Jan. 14 and Dec. 21, 2005. (Xenia P. Kobylarz, The Recorder, May 9).
Posts Tagged ‘problem jurisdictions’
Marshall, Texas: Patent Central
“In the last several years, patent lawyers have flocked to Marshall, a small northeastern Texas town of 25,000, because of its speedy court process, patent-enthusiastic judges and juries considered ideal for hearing intellectual property cases. This year alone, the court has seen 59 patent cases, more than triple the total in 2003, which saw just 14 patent suits.” Intel made a $150 million payout after adverse rulings by a Marshall judge, and Cisco is currently being sued in what plaintiff’s lawyers hope will be a big-payout case.
Among those who defend the venue against critics is Charles Baker of Houston’s Porter & Hedges, who concedes “that some defense attorneys are afraid to try cases there because of its pro-plaintiff reputation, which he disagrees with. He said that the [court’s] rocket docket also turns off some defense lawyers who feel pressured to produce evidence quickly, leaving little time for preparation.” Curiouser and curiouser: “Baker said that Marshall’s large elderly population also provides a good jury pool for intellectual property cases. ‘There are a lot of old people who don’t have a problem with sitting weeks at a time and listening to complicated issues,’ Baker said.” (Tresa Baldas, “Texas IP Rocket Docket Headed for Burnout?”, National Law Journal, Dec. 28)
For a very different view of the reasons for Marshall’s popularity, check out M. Craig Tyler (Wilson Sonsini), “Patent Pirates Search for Texas Treasure”, Texas Lawyer, Sept. 20 (PDF): “Juries in East Texas, unlike those in Houston, Dallas or Austin, are much less likely to have a member with any technical training or education, which exacerbates the problem from the defense perspective, but makes East Texas federal courts an attractive venue for would-be plaintiffs, who know that the jury will, instead, gravitate toward softer or superficial issues that are difficult to predict.” The result is to facilitate the activities of what Tyler calls “patent pirates”: enterprises that exist to file patent suits rather than to manufacture products, and which benefit from asymmetrical costs of litigation (discovery in a patent case can cost the manufacturer-defendant a million dollars or more, while the plaintiff license-holder may have few or no documents worth discovering).
According to Tyler, a “simple, nonspecific complaint”, which need not identify any infringing products sold by the defendant, “has a nuisance value of a few hundred thousand dollars the minute it is filed and served.” Tyler’s outspoken article in turn drew a response: Michael C. Smith, “”Patent Pirates” Only Exist in Neverland”, Texas Lawyer, Oct. 10 (PDF).
Where eagles fear to litigate
Eagle Pass, Texas, in Maverick County along the Rio Grande, isn’t likely to shake its reputation for plaintiff-friendly jurisprudence any time soon, as a San Antonio Express-News profile makes clear. “L. Wayne Scott, a professor at St. Mary’s University Law School…. who has mediated civil cases in Eagle Pass, estimates defendants there are roughly 10 times more likely to lose than in conservative Dallas and two or three times more likely to fall than in San Antonio. … Indeed, the prospect of facing a jury in Eagle Pass — where Mayor Joaquin L. Rodriguez also is one of the city’s top plaintiff’s attorneys — frequently makes companies more willing to settle and in higher amounts than they would agree to in other venues.” Although a 1995 round of state tort reforms has somewhat curbed the rampant forum-shopping by which plaintiff’s lawyers used to bring suits from around the state to Eagle Pass, there is still a steady diet of cases to be had against major national defendants, including suits against automakers over road crashes and a case against Connecticut-based shotgun-maker O.F. Mossberg & Sons Inc. over a hunting accident that took place in another Texas county. Local plaintiff’s attorney Earl Herring says that a case worth $10,000 in Eagle Pass would be “worth $500 in Uvalde.” (Greg Jefferson, “Eagle Pass remains known as plaintiff’s attorney paradise”, Nov. 2).