March 6, 2019
Dallas Morning News Editorial
American entrepreneurism thrives on innovation and legal safeguards to protect the sweat, toil and interests of inventors. Their efforts turn our economy by providing consumers with new products and services.
So we find it maddening when opportunistic companies exploit the courts and our patent law to cut themselves a big piece of the pie.
What brings this to mind is an episode in our own backyard. Apple recently announced plans to close its stores in the Shops of Willow Bend and Stonebriar Centre in Collin County, one of the fastest growing counties in the nation.
Officially, Apple says it is closing the stores to upgrade its NorthPark Center, Knox Street and Southlake Town Square stores, and to open a store in the Dallas Galleria. That may be true, but speculation circulating in technology circles is that Apple also is trying to elude patent trolls, the curse of innovation.
Frankly, we don’t doubt that, nor would we blame Apple if it’s true. Patent trolls build their entire business model around exploiting patent infringement laws and devising creative interpretations of intellectual property regulations to assert a claim to a patent. The mere act of defending or settling claims costs companies, the economy and consumers billions of dollars in what amount to legalized shakedowns.
Apple has been a major target, and both Collin County stores fall within the jurisdiction of the Tyler-based Eastern District of Texas, one of the most popular and favorable places in the U.S. for trolls to sue for intellectual property infringement. Historically, the federal court district has handled more patent cases than any of the 93 other districts in the United States, with many of them landing in a courtroom in the small East Texas town of Marshall. Our quick review on the Internet found at least three payouts of more than $300 million each from Apple to trolls in patent awards in the eastern district in the past decade.
Our problem with trolling is that it goes beyond the time-honored practice of lawyers seeking the best place to litigate. Trolling siphons wealth and opportunity from those who create it and turns the court into a lottery ticket and the jurisdiction into the equivalent of a speed trap. The threat of a patent troll tying up entrepreneurs or companies in court chills innovation.
A 2017 Supreme Court ruling limited patent holders from suing U.S. corporations anywhere in the United States to filing complaints in districts where the company is incorporated or has an established place of business. Apple’s two Collin County stores — arguably established places of business — potentially made the corporation vulnerable even though the stores had nothing to do with research, development or patents.
All of this, forgive us, is patently unfair. Patents are supposed to protect investment and innovation. When the courts and patent law become vehicles for trolls to piggyback on and prosper from someone else’s labor, it is time to better protect intellectual property.
This editorial was written by the editorial board and serves as the voice and opinion of The Dallas Morning News.