A single work-at-home salesman may be enough to push ahead with a patent trial.
JOE MULLIN | July 20, 2017
he top US patent court has been asked to consider an urgent appeal from a manufacturer of supercomputers that’s desperate to escape an upcoming trial in the patent hotspot of East Texas.
The Eastern District of Texas has become known as a haven for the type of litigation shops sometimes derided as “patent trolls,” but the district’s strict discovery rules and tendency to favor jury trials has attracted operating companies seeking to enforce their patents, as well. In 2015, Raytheon filed a patent lawsuit in East Texas accusing Seattle-based supercomputer maker Cray Inc. of infringing four Raytheon patents related to supercomputer hardware and software.
Cray filed a motion to have the case dismissed, arguing that the venue was inappropriate. In April, US District Judge Rodney Gilstrap ruled against Cray, noting that the company sold an XC40 supercomputer to the Texas Advanced Computing Center, or TACC, which is located outside the Eastern District, in Austin.
he following month, though, it looked like Cray had been thrown a lifeline by the US Supreme Court, which voted 8-0 to tighten up patent venue rules in a case called TC Heartland v. Kraft Foods. The high court held that companies can only be sued for patent infringement in the state in which they are incorporated, or where the defendant company has a “regular and established place of business.”
Yet under the new rules, Gilstrap still wouldn’t let Cray out of the district. Cray’s only tie to the district was a single salesperson, who worked out of his home in the Eastern District. In the judge’s view, though, that was enough to find that Cray had “regular and established” business in the Eastern District and would have to face trial.
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