Patent Troll Chooses Northeast Ohio to Sue a Wisconsin Corporation

Intellectual Property

Earlier this year, we commented upon an increase in Patent Troll activity in Northeast Ohio in a First Alert titled "Beware: Patent Trolls Are Active Again Seeking Royalties."

For a period of years, Patent Trolls (entities whose primary business is to seek revenue from patent suits) were relatively inactive due, in part, to a series of changes in patent litigation law and practice. However, earlier this year we noted that a number of clients had recently received threatening correspondence from Patent Trolls, something they had not seen for several months. Further, two Patent Trolls had taken the extraordinary step of filing patent infringement actions against Northeast Ohio companies in the local courts. Zavala Licensing LLC v. Winncom Technologies Corp., Case No. 1:19-cv-229 (N.D. Ohio); Landmark Technology A, LLC v. U.S. SafetyGear, Inc., Case No. 4:19-cv-270 (N.D. Ohio).

The increase in Patent Troll activity was also the subject of the recent Crain’s Cleveland Business article “NEO Faces a Resurgence of Patent Trolling.”

Since our initial Patent Troll First Alert issued, we have learned of more correspondence directed to Northeast Ohio businesses offering licenses either with or without claims of infringement and threats of litigation.

However, in the last week, a third Patent Troll filed a patent infringement action in the United States District Court for the Northern District of Ohio. The new case is captioned: Saros Licensing LLC v. Sub-Zero Inc., Case No. 1:19-cv-949 (N.D. Ohio). This case differs from the previous two in that the target defendant is not a business headquartered in Northeast Ohio. Instead, it is a corporation headquartered in Wisconsin. This means that the Patent Troll, rather than seeking to avoid litigation in our local courts, went out of its way to initiate its case here.

In 2017, the United States Supreme Court ruled that, with limited exceptions, patent infringement claims had to be filed either in a defendant’s state of incorporation or a venue in which the defendant has a regular and established place of business. TC Heartland v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514. TC Heartland severely restricted the venues in which Patent Trolls could pursue their patent infringement actions. The decision largely denied Patent Trolls their previously favored venue, the Eastern District of Texas, when a defendant had no brick and mortar presence in that District. As a result, in many cases, Patent Trolls are now forced to litigate their patent infringement claims in either Delaware (if the defendant is incorporated there, which is often) or the home courts of their target defendants. Reluctance to sue outside of venues viewed as favorable to their claims is believed to be one reason why Patent Troll litigation has declined over the last couple years.

Zavala Licensing and Landmark Technology were important because they signaled that some Patent Trolls were now willing to file in the Northern District of Ohio when necessary to enforce their patents. Saros Licensing goes one step further by indicating that at least one Patent Troll favored bringing its patent infringement claim in the Northern District of Ohio when other venues were available.

As before, we urge anyone receiving unsolicited correspondence alleging patent infringement or offering licenses to one or more patents to contact us before responding. We have the knowledge and experience to quickly, efficiently, and cost effectively assist you in deciding how best to deal with such allegations or offers. Calfee has a large and sophisticated intellectual property practice, including patent litigation. Calfee’s Intellectual Property Litigation practice is included in the 2019 “Best Law Firms” rankings by U.S. News – Best Lawyers in America (National and Metropolitan Cleveland rankings). Calfee’s Intellectual Property practice is also ranked by Chambers USA: America’s Leading Lawyers for Business.

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