Landmark U.S. Supreme Court decisions signal an effort to shoot down patent trolls, but one expert says small business could get caught in the crosshairs.Recent Supreme Court decisions dealing with patents have some experts concerned that, rather than clarifying the rules and combating patent trolls, the rulings will instead weaken the rights of patent holders.
1. Powdered drinks case rewrites the patent venue rules
In TC Heartland v. Kraft Foods Group Brands, a venue case, the Supremes limited the ability of patent holders to sue in other states. Kraft sued TC Heartland in its incorporated state of Delaware over drink powder patents; a lower court blocked TC Heartland’s bid to move the case to its home base of Indiana. In May, the Supreme court reversed that decision, finding that the only place a defendant can be subject to a suit is their home court, a place where infringement occurred or where the defendant has a regular and established place of business.
“It actually upsets decades of precedent,” said Rich Sampson, a shareholder at Davis, Malm & D’Agostine. He said the news was welcome to some as it displaces the patent stronghold in the Eastern District of Texas.
2. Printer ink cartridges and overseas pricing
The second ruling, in Impression Products v. Lexmark International, has greater implications for tech-based industries and will also influence many small businesses on both the manufacturing and consumer side.
China-based Lexmark makes ink cartridges, priced along two different models. In the U.S., it offered a discount incentive for its return program. But outside the U.S., prices were lower than even the discounted U.S. price; Lexmark wanted to prevent cartridges sold overseas from being re-sold in the U.S. and undercutting its own price.
The Supreme Court ruled that a product can’t be sold with fewer rights or a subset of ownership rights. In effect, the high court found, once an entity purchases an ink cartridge, they can do what they want with it.