The U.S. Supreme Court on Wednesday agreed to decide whether to limit where patent lawsuits may be filed, potentially threatening a years-long trend that critics say allows frequent and often-baseless litigants to sue in courts friendly to them.
The justices said they will hear an appeal by beverage flavoring company TC Heartland LLC to have a patent infringement suit brought against it by food company Kraft Heinz Co. moved from federal court in Delaware, where it was filed, to Heartland’s home base in Indiana. TC Heartland is challenging a lower court ruling denying a transfer to Indiana.
The dispute has been closely watched by high technology businesses, which are the frequent targets of companies that generate revenue by suing over patents instead of making products, sometimes called “patent trolls.”
Critics say certain judicial districts, especially the federal court in Eastern Texas, have procedures and rulings that favor patent trolls. Though far from any high-tech center, more than 40 percent of all patent cases were filed there last year.
A decision by the high court in favor of TC Heartland could curtail lawsuits in East Texas even though the case did not originate there.
Pittsburgh-based Kraft, which makes the MiO brand of liquid water enhancers, sued in Delaware in 2014 alleging that TC Heartland’s Refreshe-branded liquid enhancers infringed three of its patents.
TC Heartland, a subsidiary of Heartland Consumer Products Holdings, argued that it has no presence in Delaware and 98 percent of its sales are outside of that state. The court denied a transfer to Indiana. The U.S. Court of Appeals for the Federal Circuit in Washington upheld that ruling last April.
TC Heartland urged the Supreme Court to take the case, saying the appeals court’s precedent on where suits may be filed has “produced a plague of forum shopping.”
The court will hear the case and issue a ruling by the end of June.
(Reporting by Andrew Chung; Editing by Will Dunham)
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