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Apple's Forum Transfer Request Denied in Patent Case

A federal appeals court rejected Apple's request to transfer a patent case out of Texas.

Apple argued that the plaintiff had "no meaningful connection" to the district court in Texas. But the U.S. Federal Court of Appeals disagreed, leaving Apple in a jurisdiction that has not been kind.

In a separate Texas case, a district court recently ordered Apple to pay half a billion dollars for patent infringement. It looks like nobody is getting out of patent cases there without a fight.

"A Real Signal"

After AGIS Software sued Apple last year in the Eastern District of Texas, Apple alleged the software company sued in Texas "merely" for convenience." The trial judge said it was "clearly more convenient" for Apple to get of Texas, but denied the motion.

The appeals court upheld the ruling, even though AGIS had registered to do business and rented office space in Texas just a month before filing its lawsuit. The company's attorney, Fred Fabricant, said the decision sends a message.

"It is a real signal that if you are going to bring a mandamus petition to overturn the district court, the Federal Circuit is going to take this very seriously," he said. "There needs to be a clear abuse of discretion by the district judge."

Many patent plaintiffs have sued in Texas where they have a statistical advantage of winning. According to reports, patent holders win 72 percent of all jury trials in the Eastern District.

Patent Trolls

Last year, however, the U.S. Supreme Court pushed back. In TC Heartland v. Kraft, the court narrowed the venue statute for patent cases to the state of incorporation.

Lawyers called it "the end of the patent troll" -- companies that acquire patents just to sue. It didn't stop VirnetX, however, which won a $502.6 million award from a Texas court against Apple in April.

Fabricant said the courts still allow plaintiffs to keep cases where they have jurisdiction, "denying big corporate defendants with unlimited capital the routine ability to force transfer of the cases to the districts they prefer."

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