Technologist - The FindLaw Legal Technology Blog

Is Apple Closing Shops to Avoid Patent Trolls?

Apple says it's closing stores in eastern Texas, while upgrading others in northern Texas.

But courtwatchers say it is a legal strategy because federal courts in the Eastern District of Texas have been hard on Apple. The courts there are infamous for being friendly to patent trolls.

We're talking about patent suits, not judges. Anyway, Apple may be the first in an exodus from hostile territory.

Hostile Territory

Tech reporters say Apple wants to avoid patent trolls, who have found a home in east Texas for more than a decade. According to Tech Dirt, patent plaintiffs have been "dragging companies from all over into east Texas to face lawsuits."

Others say Apple is making a "drastic move," but Apple and others have taken major hits in eastern Texas. Three years ago, a patent holding firm added $625.6 million an earlier $368 million judgment against the company.

Two years ago, however, the U.S. Supreme Court said companies could not be sued in eastern Texas if they weren't incorporated or didn't have a physical location there.

"So by pulling out, they're attempting to prevent lawsuits against them there," patent attorney Chad Ray told CBS News.

"Pulling Out"

Like Apple, Ray said, companies should consider "whether their operations in the Eastern District of Texas put them at risk."

Apple declined requests to comment whether its move was a legal strategy. Instead, the company said it was making a "major investment" in other Texas stores.

The company employs 1,000 people in the northern part of the state, and announced it will expand its Austin campus by 5,000 employees.

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