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Patent venue changes look set to accelerate in 2023

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White & Case Technology Newsflash

Since 2020, the two most popular venues for patent litigation in the United States have been the Western District of Texas (averaging roughly 900 cases per year from 2020-2022) and the District of Delaware (averaging roughly 760 cases per year over that same time period).  Recent changes in both districts, however, have led to noticeable declines in filings. Unlike in prior years, the districts themselves largely drive these changes, rather than orders from the Federal Circuit Court of Appeals.

In the Western District of Texas, the rise in patent cases correlates with the appointment of Judge Alan Albright to the bench, with cases increasing from less than 100 per year to nearly 1000 patent cases filed in 2021. As the only Article III judge in the Waco division, patent plaintiffs could effectively choose Judge Albright’s court by filing in that division. In 2021, only 12 of the nearly 1000 patent cases filed in the Western District of Texas were filed in divisions other than Waco. In July of 2022, however, the Western District issued an order to split patent cases between the judges in the various divisions. While filings held relatively stable for the first few months after this change, November and December saw significant declines in filings, with new cases decreasing over 40 percent from the prior year.

In Delaware, the disclosure rules adopted by Chief Judge Colm Connolly have prompted change. In April of 2022, Chief Judge Connolly adopted a rule that any party who receives funding for some or all of its fees or expenses to litigate a patent action in the district must disclose the identity of its funders.  Litigation funding has become common in patent cases and, while there was some initial uncertainty over how broad the application of this new order would be, recent decisions have required investigation into ownership and communications regarding funding. The Federal Circuit dismissed multiple petitions for mandamus challenging these rules.  While correlation does not show causation, new patent filings in Delaware decreased 40 percent in November and nearly 70 percent in December when compared to the prior year. While filings in the district were already on pace to drop roughly 17 percent year-over-year, the sharp drop at the end of the year stands out.

So where will patent plaintiffs file in 2023?  It is possible the drop in cases in Delaware will be temporary—patent plaintiffs may be taking time to figure out what they can and cannot disclose, or to restructure financing or ownership arrangements in ways that will minimize disclosure obligations.  In the meantime, expect an increase in filings in districts such as the Northern and Central Districts of California, the Southern District of New York, and the Eastern District of Virginia (one of the few remaining "rocket dockets"). These are districts where a significant number of companies have operations, making venue appropriate. These districts have also produced top-five patent verdicts over the past three years (Caltech obtained a $1.1 billion verdict in Central California in 2020, Plexxikon obtained a $178 million verdict in the Northern District of California in 2021 and Columbia University obtained a $185 million verdict in the Eastern District of Virginia in 2022), showing Delaware and Texas are not the only places where patent plaintiffs can obtain significant victories.

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