There can be no dispute that Texas federal district courts are a favored venue for patent litigants. In 2020, approximately 4,000 patent cases were filed in district courts throughout the country. Of those cases, more than one-third were filed in the four Texas federal districts: the Eastern, Western, Northern, and Southern Districts of Texas.
Patent Litigation in the Eastern District of Texas Continues to Decline
For many years, the Eastern District of Texas received national attention as the so-called patent “rocket docket.” The Eastern District of Texas was known for its efficient patent rules, speedy time to trial, and experienced patent judges, who managed procedurally and technically complex cases to achieve the goals of Federal Rule of Civil Procedure 1: a just, speedy and inexpensive action. In 2017, however, the Supreme Court’s decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017) changed the application of venue rules for patent cases. The TC Heartland decision made it more difficult for patent litigants to hold venue in the Eastern District of Texas and resulted in a substantial reduction in the number of cases filed in the Eastern District of Texas.
Patent Litigation Boom in the Western District of Texas Continues
In late 2018, Judge Albright took his seat at the bench in the Western District of Texas, proclaiming an interest and willingness to efficiently adjudicate patent cases and to implement patent rules and procedures to streamline such cases. In response, the number of patent cases filed in the Western District of Texas exploded. The booming patent docket of the Western District of Texas overtook the Eastern District in 2020 and far surpassing the dwindling Eastern District of Texas patent docket, which continues to decline.
Southern District of Texas Sees a Significant Increase in Patent Litigation
With hundreds of the patent cases filed and the big changes to the patent dockets in the Eastern and Western Districts of Texas, the Northern and Southern Districts of Texas have received relatively little attention. Yet in 2020, the Northern and Southern Districts of Texas quietly stepped into the ninth and tenth places, respectively, in terms of the number of patent cases filed.
While nationwide patent case filings increased modestly in 2020, the Southern District of Texas saw an almost 50% increase over the number of patent cases filed as compared to 2018 and 2019. In fact, more patent cases were filed in the Southern District of Texas in 2020 than in any other in a single year in in the past decade.
No specific new procedure, judge, or announcement can explain this trend. For many years, the Southern District of Texas has applied local patent rules, which went into effect in 2008 and has counted patent-saavy judges on the bench. With Judge Atlas—for whom the Houston Intellectual Property Inn of Court is named—announcing in late 2020 that she would be taking inactive senior status on March 31, 2021, there are now eight judges and one senior judge in the Houston Division of the Southern District to whom patent cases are assigned. These include Chief Judge Rosenthal, Judge Hughes, Judge Gilmore, Judge Ellison, Judge Hanen, Judge Bennett, Judge Hanks, Judge Eskridge, and Senior Judge Lake.
Houston Expected Continue to See an Increase in Patent Cases Filed
The most likely reason for the increase in patent cases filed in the Southern District of Texas is the entirely expected impact of TC Heartland. Under TC Heartland, determining where to file a patent case requires an analysis of where the accused infringer is incorporated (or the state of organization for unincorporated entities), maintains a principal place of business, or maintains a registered office. The greater Houston area serves as headquarters for twenty-two Fortune 500 companies, including, inter alia, Halliburton, Phillips 66, Sysco, and Enterprise Products Partners, not counting Hewlett Packard Enterprise, which recently announced its decision to relocate its global the greater Houston area. Other publicly traded companies are headquartered or have a substantial physical presence in Houston or the greater Houston area, such as Mitsubishi Heavy Industries America, Inc., Emerson Process Management, Honeywell International Inc., Schlumberger, PROS Holdings Inc., IES Holdings Incorporated, LyondellBasell Industries, Enterprise Products Partners LP, and Applied Optoelectronics, Inc.
Because Houston is home to so many companies generally, as well as tech-driven companies specifically, we expect to continue to see an increased number of patent cases filed in the Southern District of Texas as a consequence of TC Heartland.