Forum-shopping for favorable jurisdictions in which to try or defend a case is second nature to patent litigators. This post analyzes the dissonance between how that practice is sometimes disparaged legislatively and judicially and how such conduct is evaluated through the ethical lens of the Rules of Professional Conduct.
Patent legislative history and cases refer to forum-shopping pejoratively. In fact, one of the earliest cases of any kind to decry forum-shopping is a patent case. In Helene Curtis Industries v. Sales Affiliates, Inc., 105 F. Supp. 886 (S.D.N.Y.), aff’d, 199 F.2d 732 (2d Cir. 1952), Judge Irving Kaufman criticized a party’s forum-shopping tactics stating that the defendant “ . . . is forum shopping with a vengeance. I discern no other rational which can adequately explain the stratagems which it has employed throughout this controversy. Our courts are not meant for such use.” Id., at 902 (emphasis added).
The Federal Courts Improvement Act of 1982—the Act leading to the creation of the Federal Circuit—echoes Judge Kaufman’s judicial distaste for forum-shopping. Passage of the Act was driven in part by legislative intent to “reduce the forum-shopping that is common to patent litigation.”
The patent consultants to Huskra Commission (instrumental in promoting passage of the Act) concluded that “forum shopping on the scale that occurs in patent law increases the cost of litigation and ‘demeans the entire judicial process and the patent system as well.’”
Despite the “back-of-the-hand” treatment accorded to forum-shopping over the years in dicta and legislative commentary, the practice is obviously still alive and well in patent litigation. The creation of the Federal Circuit alleviated regional circuit forum-shopping; however, the practice of singling out favorable district court venues in which to file a patent infringement lawsuit continues with abandon.
The prevalence of patent infringement claims being filed in the Eastern District of Texas is a case in point. Despite the absence of any significant number of inventors or patentees residing in the judicial district, Marshall, Texas is now an epicenter of patent litigation.
Case statistics bear out its reputation as a favorable patent owner’s forum. From 1995-2007, the Eastern District of Texas ranked third in the nation with its plaintiff success rate at trial of 71.9%.
After combining summary judgment and trial decisions, Texas is still the second most successful district for plaintiffs among those districts with a minimum of 15 patent cases. The Eastern District of Texas awarded three of the top ten highest patent jury verdicts in 2005 and 2006, each of the three totaling over $70 million.
The very existence of the Eastern District of Texas as a favorable plaintiff’s forum in patent cases raises an interesting ethical issue: What are your ethical obligations in advising a prospective plaintiff client about where to file a patent infringement claim?
For example, do you have a responsibility to recommend use of the Eastern District of Texas as a preferred venue if you represent a patent owner seeking to enforce its patent rights?
The answer is a qualified YES, although the analysis of where actually to file suit is of course highly dependent on individual case facts.