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Are the rules changing for patent suit site selection?

Forum selection--or the ability to choose the particular district in which a patent case will be litigated--is a hot issue these days. A recent decision may limit the patent holder's options for choosing a venue.

Forum selection--or the ability to choose the geographic location of the court where a suit for patent infringement is litigated--is one of many controversial issues related to patents these days.

Generally, the first person to file the lawsuit gets to choose where the suit is brought. This is called the "first-to-file" rule. It works much like the lines you stand in at the grocery store, airport security, or countless other places; it's simply first come, first served.

However, in the context of patent litigation, being first in line is a big deal. Different courts have different procedural rules that can affect the way a case is litigated and the speed at which the case goes to trial. Moreover, there is a perception that courts in certain areas are more plaintiff-friendly than others.

The venue chosen by the most patentees over the last few years is the Eastern District of Texas. Rather than filing suit in Northern California near Silicon Valley or in New York, the most popular choice for patentees these days are small Texas towns like Marshall and Tyler. This is true even when both the plaintiff and defendant reside outside Texas.

While defendants can ask the court to transfer the case to a more convenient forum, lawyers commonly view such motions as near futile and potentially more harmful than helpful. For example, you can upset the local judge by saying you want out of his or her courthouse. Indeed, under the current rules, so much deference is given to who was first-to-file that patent infringement suits are often litigated in places that have almost nothing to do with the parties, the patents-at-issue, or any of facts underlying the case.

But those rules may be changing. This past Friday, the Court of Appeals for the Federal Circuit--the appellate court in charge of reviewing all patent cases--issued the Micron Technology decision (full text available here in PDF), which suggests that trial courts should give more weight to convenience in deciding where a case will be litigated.

In that case, the patentee, Mosaid Technologies, is a Canadian company operating in California. The company accused of infringement, Micron, did business in both California and Texas. Micron had filed a lawsuit challenging Mosaid's patents in California, and the next day Mosaid sued Micron for patent infringement in the Eastern District of Texas. The Federal Circuit ruled that under the particular facts of that case, California was the more convenient forum because neither the location of the parties, nor the availability of witnesses or evidence, favored Texas over California.

So will the Micron decision limit forum selection in patent cases? It's hard to tell. The court did say that the "first-filed suit rule...will not always yield the most convenient and suitable forum" and that instead of "automatically going with the first filed action, the more appropriate analysis takes account" of convenience.

Arguably, that wasn't as important in that case because Micron actually was the first-to-file. As such, some may dismiss the court's remarks as mere "dicta" (Wikipedia: dictum), that is, more of an editorial aside than true binding precedent.

Regardless, the Micron decision shows at least how some judges are leaning and, as such, where the law may well be headed.