Why East Texas courts are back on “top” for patent lawsuits

US federal courts are divided into 94 districts. When patent-holders file a lawsuit against a product that's sold nationwide, they have pretty wide leeway as to where to file their case. That's allowed for quite a bit of "venue shopping" in patent cases, and several years ago the remote and rural Eastern District of Texas started to become surprisingly popular.

Over time, East Texas became known as a place very friendly to patent plaintiffs and unfriendly to patent defendants, particularly out-of-state or foreign tech companies. Judges there were reluctant to let cases be transferred out of their district, and some patent-holding companies began setting up Texas LLCs in order to better argue that Texas was the right venue for them.

Many of those companies are "headquartered" in small offices in the building next door to the federal courthouse in Marshall; or they're in the Energy Center in Tyler, a historic but generic-looking office building that once housed Exxon's local offices back in Texas' oil heyday.

Despite all that, East Texas' popularity with patent holders looked to be waning. In 2011, for the first time in a few years, Delaware, not East Texas, became the most popular district to file suit. 

New data released this week shows that East Texas is back on top. According to a report by the law firm Perkins Coie, 1,260 patent cases were filed last year in East Texas, compared to just under 1,000 that were filed in Delaware.

The year Delaware won that distinction, the district had the most patent lawsuits of any judicial district, with 484 suits filed. East Texas ran second, with 418.

The number of suits filed in 2011 is much lower because of new rules that came into effect with the America Invents Act, which generally bars plaintiffs from suing a large number of companies in a single lawsuit. However, that has just led to plaintiffs filing larger numbers of suits in the same district. It's not clear at this point if the "one defendant, one lawsuit" rule is really doing anything in terms of limiting sprawling or frivolous cases; all it does is raise plaintiffs' initial costs by a few hundred dollars per defendant. If anything, it may be making it harder for defendants to coordinate, form joint defense groups, and limit costs.

Rounding out the list of most popular venues for 2012: the Central District of California, which includes Los Angeles and is the nation's largest judicial district by population, was third place with 514 patent suits. The Northern District of California (SF Bay Area) was fourth, with 258, and the Northern District of Illinois (Chicago) was fifth, with 237.