WASHINGTON—Credit unions and their technology providers have been granted some relief by the Supreme Court, which has ruled in favor of putting tight limits on where patent lawsuits may be filed.
The unanimous decision by the court is a strike against so-called “patent trolls,” whose threats of litigation over issues as small as lines of code that may be used to operate ATMs, for instance, have long worried credit unions that they could be caught up in expensive lawsuits filed in court houses far from their place of operations.
The case on which the court ruled, TC Heartland v. Kraft Foods Group Brands, No. 16-341, involved flavored drink mixes made by TC Heartland, which is based in Indiana. Kraft filed suit claiming patent infringement in Delaware; that state, along with Texas, has been the home to numerous patent lawsuits as plaintiffs have sought friendly venues.
TC Heartland sought to move the case to Indiana, but lower courts had ruled against it based on a 1990 decision by the United States Court of Appeals for the Federal Circuit, a specialized court that handles patent appeals. That decision said defendants in patent cases, as in other cases, may be sued essentially anywhere they do business.
The Supreme Court ruled that the Federal Circuit however, had correctly interpreted part of a 1948 statute that requires patent suits to be filed “in the judicial district where the defendant resides.”