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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."
joined:Dec 10, 2005
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.
joined:Dec 10, 2005
...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.
Should End Apple's Patent TrollsI 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.
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]