Apple, the world’s second most valuable company, is closing both of its store locations in the eastern district of Texas to avoid litigation from patent trolls. For those arguing that these trolls don’t hurt consumer welfare, this is a damming example of the way they influence useful innovators’ actions.
There is ample evidence that patent trolls harm innovation, both among new inventors and companies that invest heavily in research and development. The Eastern District of Texas is a notoriously troll-friendly venue. Despite a rate of success only slightly above the national average, the district has become the national leader in patent trolls:
“For more than ten years, patent troll litigation has clustered in the Eastern District of Texas (EDTX). Patent trolls began to flock there when a judge created local patent rules that were perceived as friendly to patent owners. The court required discovery to start almost right away and did very little to limit costs (which were borne much more heavily by operating companies because they have more documents).”
Current law only allows patent suits against domestic firms in districts where the firm is incorporated or “where the defendant has committed acts of infringement and has a regular and established place of business.” By shifting their locations slightly westward into Dallas, Apple removes a major point of vulnerability.