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Supreme Court Ruling Should End Apple's Patent Trolls

     
10:55 pm on May 22, 2017 (gmt 0)

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The Supreme Court of the United States today decided that U.S. companies may only face patent infringement lawsuits in the jurisdiction in which they are incorporated, which in Apple's case would be California.

The decision is significant for Apple, as the iPhone maker faces several patent infringement lawsuits in a single district court in Eastern Texas that is considered friendly to patent holding entities, or so-called "patent trolls."


[macrumors.com...]
11:17 pm on May 22, 2017 (gmt 0)

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At the end:
Update: The appears to be considerable confusion throughout media coverage of this ruling. The ruling narrowly limited a company's "residence" to the place of incorporation, but patent lawsuits may still be filed anywhere "the defendant has committed acts of infringement and has a regular and established place of business." As a result, it appears patent lawsuits can still be filed against Apple in many jurisdictions, including the Eastern District of Texas.
That's exactly the way I interpreted it when I read the ruling. Even if Apple completely pulled out of Texas, my guess is that even 1 iPhone user with a "patent infringing device" in Texas would allow a lawsuit to go forward.
7:07 am on May 23, 2017 (gmt 0)

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my guess would be that "a regular and established place of business" would require something approaching a brick and mortar presence.
maybe not necessarily an apple store per se but a sales agreement with a local cell service provider might apply.
in which case i could see apple refusing to sell iphones to customers in unfriendly jurisdictions...
7:25 am on May 23, 2017 (gmt 0)

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It's my understanding that Companies (or even individuals who chose to do so) can only be Incorporated in one locale. This is where all tax reporting and management occur and legal process can be served. They can have business offices (or products) anywhere, operate franchises, all range of business and commerce legally allowed, but there is only ONE official place they can be incorporated.

This limitation by the court puts sanity back into the legal system.

Note: IANAL, but I know one or two. :)
11:09 am on May 23, 2017 (gmt 0)

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Yes, correct, the ruling is only where the business is incorporated.

It should help stop some of the trolling that goes on, and make it much more straightforward. It does apply to any product or service in the U.S., and not just Apple.
4:42 pm on May 23, 2017 (gmt 0)

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According to the actual Supreme Court opinion [supremecourt.gov] (emphasis mine):
...civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.
The opinion only refers to the first part of the statement (regarding the "residence" of the company being sued). Yes, a company can only be incorporated in one state. But it can have an established place of business in multiple states, so it can still be sued in any of those states (assuming that it has also committed the alleged acts of infringement in those locales).

It's my understanding that Companies (or even individuals who chose to do so) can only be Incorporated in one locale.
Yes.

This is where all tax reporting and management occur and legal process can be served.
Yes and no... Many companies incorporate in one state, but have no physical presence there and do all their business in another state. In that case (local requirements of the second state may differ), they are required to register as a "foreign" corporation in the second state, also pay taxes in the second state, and can also be served in the second state as well. Companies that do this usually choose Delaware or some other state without corporate income taxes to avoid being taxed twice. (However, Delaware's recent escalation of franchise taxes makes it less and less attractive to incorporate there- this year we finally de-registered our DE incorporation and moved it to the state where we do business.)

They can have business offices (or products) anywhere, operate franchises, all range of business and commerce legally allowed, but there is only ONE official place they can be incorporated.
Yes.
6:06 pm on May 23, 2017 (gmt 0)

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Should End Apple's Patent Trolls
I think Apple employs its own patent trolls targetted at Samsung and the entire Android community. That's the nature of the beast. Court rulings aside, each will continue to find vulnerabilities in the other to exploit as the oppertunity allows.
6:33 pm on May 23, 2017 (gmt 0)

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The ruling looks like it was not aimed at preventing patent infringement suits, but only the practice (apparently common) of purchasing patents solely for the purpose of filing infringement suits and then shopping around for venues where they are more likely to prevail.

The mention of East Texas might need explaining - one particular court in that East Texas Circuit has heard and agreed with plaintiffs in unusually high numbers. A single judge in Marshall, TX oversaw close to 25% of all patent cases in the US. Something that was noted and documented over 10 years ago. It has become the largest local industry. ;)

Justice Clarence Thomas, writing for the court, said the Federal Circuit had misconstrued the law and ignored a 1957 Supreme Court precedent that had set out the correct interpretation. A domestic corporation, Justice Thomas wrote, resides only in the state of its incorporation.
Reader View [nytimes.com]