Overview
As the stark discrepancy in totals indicates, corporate nuclear verdicts in Delaware are largely driven by the state’s federal court.
In 2017, the landmark US Supreme Court decision TC Heartland v. Kraft Foods found a corporation is only a resident of its state of incorporation when determining a venue for patent cases. This ruling upended nearly 30 years of precedent in patent law and dramatically restricted where patent cases may be litigated. Where the rules for patent infringement lawsuits previously made it easy to select the US District Court for the Eastern District of Texas – which had a reputation for being a friendly venue to patent holders – the Supreme Court’s ruling caused a drastic geographic shift in where such cases are filed and tried.
As a result, patent infringement complaints filed in EDTX dropped by nearly 50% in the first year after the ruling and surged in the US District Court for the District of Delaware, where two-thirds of Fortune 500 companies are incorporated. In 2020, the District of Delaware ranked number two in the volume of intellectual property filings in the country.
All Delaware Federal Nuclear Verdicts Were In Patent Cases
Marathon’s analysis found that all $4.8 billion in 20 corporate nuclear verdicts ordered by juries in Delaware’s federal court from 2009 to 2022 involved intellectual property matters. The analysis also found that half of the verdicts issued occurred after SCOTUS’ 2017 decision in TC Heartland. According to Bloomberg, Delaware’s average of new patent complaints jumped from 46 before TC Heartland to 78 after the ruling. Additionally, patent cases in the court have a higher chance of being resolved on motions or through settlement when compared to EDTX. Judges also allow for more extended discovery than in EDTX, which is known for speed.
Under former Chief Judge Leonard P. Stark, patent cases filed in the District of Delaware comprised 22% of the nation’s patent docket over the past decade, with only federal judges Alan Albright and Rodney Gilstrap of the EDTX and WDTX receiving more new cases. Stark presided over more than 60 patent trials and 2,400 cases – nearly half of his docket – before being confirmed by the US Senate to the US Court of Appeals for the Federal Circuit in February 2022. Stark’s departure may make the District of Delaware a more defendant-friendly forum, as data suggest he more often sided with patent owners. Cases may therefore shift away from the Delaware court and to other top venues for such matters, including EDTX and WDTX.
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