How Patent Owners Should Be Rethinking Venue Selection and Case Strategy in a World Without Waco

“Whether a case will be tried in a particular venue should not weigh heavily in an analysis of the viability of a potential investment. In fact, this change could be seen as an opportunity for litigants and lawyers.” Judge Alan Albright no longer a lock for patent litigants in the Western District of Texas, prospective claimants and their counsel should be rethinking their venue selection strategies. Litigants and lawyers who previously relied on Judge Albright’s favorable procedural rules and efficient trial schedules as a proxy for more rigorous due diligence will now need to take a closer look at the merits of their cases when considering whether and where to file. For those navigating this new world order, litigation funders serve as a valuable resource. Experienced funders can offer objective advice about the strengths and weaknesses of complex patent infringement cases, strategic insights about potential litigation venues, and non-recourse financing for meritorious cases.

Albright’s Patent Hub

Since his appointment in 2018, Judge Albright has helped turn the Waco Division of the Western District of Texas into the nation’s most active court for patent infringement litigation. As seasoned patent practitioners are aware, Judge Albright issued standing orders designed to speed up the patent litigation process, disfavored stays for inter partes reviews (IPRs), and rejected many requests to transfer cases out of the district.

Following the adoption of these procedures, claimants found that cases filed in the Waco Division, where Judge Albright is the only District Court judge, had a streamlined and predictable path to resolution. As a result, the Western District went from handling a handful of patent cases per year to 23% of all U.S. patent infringement litigation in 2021. Not everyone was pleased, though, with this concentration of patent cases in Judge Albright’s court. Large corporate defendants, the U.S. Supreme Court, and members of Congress all expressed concerns about one judge handling so many cases.

In response, on July 25, Chief District Judge Orlando Garcia of the Western District changed the rules. Patent cases filed in Waco will now be distributed randomly among the dozen judges in that District, rather than automatically assigned to Judge Albright in the Waco division.

One might assume that these changes will impact strategy for litigation funders as much as it will for attorneys and litigants. However, reputable funders will prioritize assessment of its patent investments based on objective merits. Whether a case will be tried in a particular venue should not weigh heavily in an analysis of the viability of a potential investment. In fact, this change could be seen as an opportunity for litigants and lawyers to improve their claims and better prepare for the demands of what are often long-running patent infringement cases, regardless of the judge. Furthermore, the key advantages of the Western District—namely the time to trial, low likelihood of transfer to more defendant-friendly forums, and discretionary IPR denials—are no longer guaranteed even for cases before Judge Albright in the face of a heavy caseload, mandamus grants, and IPR policy changes, making consideration of alternative venues and rigorous diligence all the more important.

The Importance of Diligence

While Judge Albright’s standing orders certainly speed up cases on his docket and his approach to merits questions often favored patentees, these advantages were no substitute for a full evaluation of the merits of an infringement claim. Claimants and counsel should always pursue diligence that:

  • Evaluates appropriate venues
  • Considers the case timeline and budget in detail, particularly in light of the many district- and court-specific default schedules and times to Markman, summary judgment, and trial
  • Weighs the disclosure rules and obligations with respect to infringement, invalidity, and damages contentions
  • Assesses the likelihood of a stay for IPR.
  • Examines the merits in detail, including in view of Section 101 patent eligibility and Section 112 definiteness law.

These are issues that should be addressed as part of any funder’s due diligence process. This comprehensive diligence often provides claimants with an expert, objective third-party assessment of a case’s chances of success, strengths, and weaknesses. Law firms and litigants who have used funding frequently cite the diligence process as useful in helping them strengthen their case and validate or recalibrate their litigation strategies.

Western District Landscape

For claimants who are considering filing in the Western District of Texas, the landscape outside of Judge Albright’s court remains somewhat unknown. Judge Albright’s orders only apply to the Waco Division and his colleagues have not adopted similar standing orders. Of the twelve judges in the Western District, only five (including Judge Albright) appear to have significant intellectual property law experience, albeit limited patent trial experience.

However, the appointment of Magistrate Judge Derek Gilliland is a promising development for patent litigants in the Western District. Gilliland is a former patent litigator who worked alongside Judge Albright in private practice on several cases and was tapped to help handle Waco’s patent docket. Proceeding with Magistrate Judge Gilliland could be another option for some claimants if all parties consent to the magistrate judge running a case through dispositive motions.

Nonetheless, claimants and counsel will need to consider whether the uncertainty associated with filing in the Western District is now worth it.

Other Districts: Pros and Cons

For patent claimants looking outside of the Western District, four other U.S. District courts are likely to see an influx of cases.  We see pros and cons for claimants in each:

  • Eastern District of Texas. The Eastern District has a roster of very experienced judges, given Marshall’s previous status as the nation’s top venue for patent cases. Judges in the Eastern District are historically less likely to issue stays for IPRs and appear inclined to give issues like Section 101 a fair look early on in a case, reducing timing and merits uncertainty. The local rules also require substantial disclosures and discovery by defendants and summary judgments are less frequent.On the other side of the ledger, the patent infringement caseload in the Eastern District is likely to spike in the wake of the changes in the Western District. Lawyers and litigants may also find it difficult to establish venue in the Eastern District following the Supreme Court’s decision in TC Heartland.  Indeed, the Eastern District was the impetus for that development in venue law.
  • District of Delaware. Thanks to its consistently heavy caseload, the District of Delaware’s judges and magistrates have a high level of patent litigation experience. Even in the wake of TC Heartland, establishing venue is relatively easy because of Delaware’s status as the nation’s incorporation capital. Yet the “home-field” advantage for Delaware corporations is blunted by the fact that many companies incorporated there are headquartered elsewhere. Judges in the district will give issues like Section 101 serious consideration early in the case, providing clarity on the merits, and cases are less likely to be resolved on summary judgment. The district also has a strong infrastructure for patent litigation, with a sophisticated local bar and detailed local rules for patent cases.However, the District of Delaware already has a heavy caseload—a docket which is likely to grow even larger in the wake of the Western District of Texas order—and an influx of patent cases will likely extend the already lengthy time to trial in the District of Delaware. Cases are also regularly stayed for IPR proceedings, further increasing the time to trial.
  • Western District of Texas, Austin Division. Waco’s sibling division remains a strong potential venue for patent cases. Austin’s status as a technology hub should establish venue over tech company and other large corporate defendants with a significant presence in the area. In addition, some judges in the district—notably Judge Lee Yeakel and Judge Robert Pittman—have substantial pretrial patent experience.Historically, however, the length of time to trial has been longer than in Waco. The Division overall also has relatively limited experience with patent infringement cases, specifically when it comes to hearing patent trials, and some believe that local defendants may enjoy a strong “home-field” advantage. Given the size of the technology industry in the Austin area, the jury pool may also be more technology-focused and potentially more friendly to some technology companies than in other venues.
  • Central District of California. The Central District is known for its reasonable schedules in patent cases, and its size—encompassing most of the Los Angeles metro area—limits the “home-field” advantage for large corporate defendants. The District’s patent program has allowed judges in the District to gain substantial patent litigation experience, and judges have historically been open to early consideration of substantive issues like Section 101, providing early clarity on key merits questions.The court has been willing to stay cases for IPRs, however, and patent claimants face similar disclosure and discovery rules as required by the patent local rules of the Northern District of California.

Sharpening Strategies

As the patent litigation landscape shifts, funders are in a position to help claimants sharpen their litigation strategy based on collected experience and expertise across multiple venues and numerous cases. The benefits of comprehensive diligence and objective feedback about the merits of cases yield the best outcomes for claimants and funders alike.

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  • [Avatar for Loozap]
    August 16, 2022 07:43 pm

    C’est incroyable