• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down

2

Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for

3

The $39 trillion U.S. national debt isn’t as high as Japan’s and Singapore’s relative to economy size—and yet it's still worse somehow

1

'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down

2

Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for

3

The $39 trillion U.S. national debt isn’t as high as Japan’s and Singapore’s relative to economy size—and yet it's still worse somehow
TechSupreme Court

Supreme Court to Mess With Texas Over Patents

Jeff John Roberts
By
Jeff John Roberts
Jeff John Roberts
Editor, Finance and Crypto
Down Arrow Button Icon
Jeff John Roberts
By
Jeff John Roberts
Jeff John Roberts
Editor, Finance and Crypto
Down Arrow Button Icon
December 16, 2016, 3:05 PM ET
Justice Antonin Scalia's Body Lies in Repose At U.S. Supreme Court
Leigh Vogel — WireImage
Add Fortune on Google for similar content.

In a move that may shake-up U.S. patent law, the Supreme Court this week decided to hear a case about where patent owners can file lawsuits—a case that will likely put an end to a special Texas cottage industry that has been a thorn in the side of big business.

The case will affect a judicial region known as the Eastern District of Texas, which for years has been a hothouse of patent lawsuits thanks to plaintiff-friendly laws and juries that have a reputation for handing out outsize damages awards. In Texas towns like Marshall and Tyler, hotels, restaurants, and local law firms have done a booming business thanks to planeloads of lawyers showing up to litigate patent cases.

The venue is especially popular with so-called patent trolls, which are firms that don’t make or produce anything, but amass old patents in order to sue companies that do. The trolls have enjoyed roaring success in East Texas, in part because the cost of litigating there makes it cheaper for many firms to just pay the trolls to go away. When firms do decide to fight the trolls, the outcome can be harsh — such as when a jury in February ordered Apple to pay a shell company $625 million over patents related to FaceTime and iMessage.

Get Data Sheet, Fortune’s technology newsletter.

But now the Supreme Court’s scrutiny is set to put a stop to all that. In deciding to take the venue case, which pits food producer TC Heartland against Kraft, the top court appears set to revisit a law that requires patent owners to sue companies where they “reside” or where their business is located and where the infringement occurred.

For decades, that requirement meant patent owners would have had to show that defendants had some sort of connection to a place like Tyler, Tex. before they could begin lawsuits there. But in 1990, an appeals court reinterpreted the law to mean even a minimum contact, such as a web presence, would suffice for patent owners to establish a venue. As a result, the Eastern District of Texas saw an eye-popping 44% of all patent cases in the country land on its docket.

According to Dennis Crouch, a well-known patent law professor, the Supreme Court will almost surely reverse the lower court, and reinstate the original meaning of the law. In a blog post titled “Goodbye E.D. Texas as a Major Venue,” Crouch writes:

An 8-0 reversal of the Federal Circuit is quite likely […] Under any normal interpretation of the provision, very few cases would be amenable to proper venue in the Eastern District of Texas because almost none of the accused infringers “reside” in that district or even have a place of business in that district.

If the Supreme Court does indeed restore the old venue rules, it will be left to determine where many of these patent cases take place instead.

Doug Kline, who leads an intellectual property team at the law firm Goodwin, predicts a lot of the cases will end up in Delaware instead, where many firms are incorporated, and where a lot of the country’s commercial litigation already occurs.

In an interview with Fortune, Kline also said it is likely the Supreme Court will change the venue rules, partly because it decided to hear the case in the first place, and because it regularly overturns the appeals court in question.

For the Texas towns that have grown accustomed to a steady stream of out-of-town patent lawyers, a change in ruling would be a blow. But it would not be a surprising one given how the Eastern District of Texas has been under fire for years, not least because one of the judges who helped make it a hotbed of patent lawsuits stepped down from the bench to join his son’s law firm—a firm that specialized in patent troll lawsuits. The towns have also benefited from lavish gifts, such a new ice-skating rink paid for by Samsung, as companies with cases before the courts sought to ingratiate themselves with local juries.

The Supreme Court’s decision to take the Kraft case comes after members of Congress unsuccessfully sought to pass a law earlier this year titled the Venue Act, which would have likewise curtailed the role of East Texas in patent cases.

About the Author
Jeff John Roberts
By Jeff John RobertsEditor, Finance and Crypto
LinkedIn iconTwitter icon

Jeff John Roberts is the Finance and Crypto editor at Fortune, overseeing coverage of the blockchain and how technology is changing finance.

See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Tech

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • TikTok icon
  • YouTube icon

Latest in Tech

Schools across America are quietly admitting that screens in classrooms made students worse off and are reversing years of tech-first policies
North AmericaEducation
Schools across America are quietly admitting that screens in classrooms made students worse off and are reversing years of tech-first policies
By Marco Quiroz-GutierrezJuly 25, 2026
1 hour ago
A man stands looking out over his front porch where a sign reads, "No data centers."
EnvironmentData centers
Startups are installing tiny data centers in people’s homes to reduce strain on the beleaguered electrical grid
By Sasha RogelbergJuly 25, 2026
1 hour ago
Roderick Wong, MD is Managing Partner and Chief Investment Officer of RTW Investments
Commentary250 Years of Innovation
When 10,000 doctors stood up and cheered for a cancer drug — America’s innovation machine made it possible
By Roderick WongJuly 25, 2026
3 hours ago
m
Commentarydisruption
The Messi Test and how the Spaniards messed with it: what the World Cup final taught me about the Jobs AI can’t touch
By Bhaskar ChakravortiJuly 25, 2026
4 hours ago
What it’s like to be a founder of the most high-stakes startup ever, OpenAI
AIOpenAI
What it’s like to be a founder of the most high-stakes startup ever, OpenAI
By Alyson ShontellJuly 25, 2026
6 hours ago
SpaceX may have missed its window to buy Tesla
Big TechTech Companies
SpaceX may have missed its window to buy Tesla
By Shawn TullyJuly 25, 2026
7 hours ago

Most Popular

'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down
Economy
'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down
By Eleanor PringleJuly 24, 2026
1 day ago
Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for
Big Tech
Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for
By Sydney LakeJuly 23, 2026
2 days ago
The $39 trillion U.S. national debt isn’t as high as Japan’s and Singapore’s relative to economy size—and yet it's still worse somehow
Economy
The $39 trillion U.S. national debt isn’t as high as Japan’s and Singapore’s relative to economy size—and yet it's still worse somehow
By Sasha RogelbergJuly 23, 2026
2 days ago
Current price of oil as of July 24, 2026
Personal Finance
Current price of oil as of July 24, 2026
By Joseph HostetlerJuly 24, 2026
1 day ago
Current price of silver as of Friday, July 24, 2025
Personal Finance
Current price of silver as of Friday, July 24, 2025
By Joseph HostetlerJuly 24, 2026
1 day ago
Turns out Dead Internet Theory was right: AI agents are eating the Web, growing by nearly 8,000% and rewiring the Internet's business model
AI
Turns out Dead Internet Theory was right: AI agents are eating the Web, growing by nearly 8,000% and rewiring the Internet's business model
By Mia OsmonbekovJuly 23, 2026
2 days ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.