Federal Circuit Deals Blow to Texas Patent-Trolls

In a ruling issued earlier today, the Federal Circuit Court of Appeals admonished Eastern District of Texas Federal Judge Rodney Gilstrap for abusing his discretion in refusing to transfer venue of a patent infringement lawsuit. Earlier this year, the U.S. Supreme Court issued an opinion cracking down on venue shopping in patent infringement claims, ruling that a defendant could only be sued in its state of incorporation or where it has “a regular and established place of business.” Venue shopping has enabled so-called patent trolls to bring lawsuits in favorable courts, one of the most notorious of which is the Eastern District of Texas in Marshall. In the Cray case, Judge Gilstrap ruled that venue in the Eastern District was proper because the company, a supercomputer manufacturer based in Seattle, had single salesperson working out of his home in the Eastern District, despite the fact that the employee did not sell any Cray products in the district and worked mainly on clients in the eastern U.S. The case will now return to the district court for transfer to another district with proper venue.

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