Speed of federal court draws big cases to Norfolk - American Chronicle
Sept. 26--NORFOLK -- First eBay got hit with a $35 million patent judgment. Then a jury found that Verizon had its hands in the patent cookie jar. Damages awarded: $115 million. Now Twitter and AOL face similar patent infringement lawsuits in the Norfolk federal court.
The Eastern District of Virginia has become a favored venue for patent litigation.
The Norfolk federal court, one of four in the district, has been assigned some of the bigger-name cases.
Why these cases landed here when those big companies are headquartered elsewhere is largely based on strategy.
Part of the reason is the Eastern District of Virginia's "rocket docket." Plaintiffs find any way they can to get a case heard here because it is the fastest court in the nation. And with record numbers of patent lawsuits being filed nationally, we are seeing more patent cases here in recent years.
The Twitter case is much like most of the other patent cases filed in U.S. District Court in Norfolk in that none of the parties is from here.
Dinesh Agarwal, a Northern Virginia patent attorney, hit upon an idea for his own patent in the 1990s.
His wife is a big fan of celebrities. She follows them in all the glossy gossip magazines and on the Internet.
"He said, 'You know, there ought to be a way for famous people to let you know what they're doing,' " said Jonathan Suder, a Fort Worth, Texas, attorney representing Agarwal.
It took Agarwal a few years, in his spare time, to figure it out. In 2002, the U.S. Patent and Trademark Office awarded him patent No. 6,408,309, called "Method and System for Creating an Interactive Virtual Community of Famous People."
But the patent, good for 20 years, was left undeveloped. Last year, he assigned the patent to his company, VS Technologies.
In 2006, California software engineer Jack Dorsey sent out his first "tweet." Twitter was born and has become an Internet phenomenon. Today there are about 200 million subscribers who can post messages of up to 140 characters.
Agarwal didn't pay much attention to Twitter until last year, when he learned that the company established a function on its website called "browse interests."
The lawsuit alleges that Twitter infringed on the patent by using some of the methods Agarwal developed. The browse interests feature "makes publicly available, interactive, virtual communities and profiles of people in various fields of endeavor," the lawsuit says.
Twitter has raised several defenses. Agarwal's patent should never have been granted because it is a "business method." Courts have ruled that business methods are not patentable, Twitter says in court filings.
Twitter also argues that similar services, such as "Who's Who Online," were already available on the Web and that its browse interests function is "fundamentally different" from what Agarwal invented.
The case is scheduled for trial Oct. 24, a little more than nine months after the suit was filed. Agarwal, however, must first overcome Twitter's motion to have the case thrown out. A hearing on that motion is set for Friday.
Patent cases are being filed in record numbers. More than 3,300 were filed nationwide in the fiscal year that ended Sept. 30, 2010. That's higher than any previous year going back to at least 1990, according to the federal judiciary.
"One the reasons for the increase in patent litigations over the past however many years is that intellectual property has become so much more valuable and important to protect," said Catherine Branch, a patent attorney with the Washington law firm Pillsbury Winthrop Shaw Pittman.
"If you don't protect your patent rights what's the purpose of having them?" said Branch, who will take part in an intellectual property law seminar Oct. 12 at the Willcox & Savage Norfolk office.
The judiciary does not break down the number of patent cases by district. But it does publish the number of intellectual property cases filed by district, which includes patent, trademark and copyright infringements. The Northern and Central districts of California, home to Silicon Valley, have by far the most intellectual property cases, handling about 20 percent of all cases filed nationwide.
In that same fiscal year, there were 159 such cases filed in the Eastern District of Virginia, more than any of the nine districts in the 4th Circuit, which encompasses five states. The cases are divided equally and randomly among the district's judges in Norfolk, Newport News, Richmond and Alexandria.
The speed in which civil cases go to trial in Norfolk and the three other Eastern District of Virginia federal courts makes it an attractive court for plaintiffs, lawyers say. Defendants, like Twitter, often fight to get them moved. Twitter lost that battle.
"The Eastern District of Virginia is very popular with patent plaintiffs because judges there decide cases so quickly, and cases are more likely to go to trial," Mark Lemley, a Stanford law school professor and director of the Stanford Program in Law, Science, and Technology, said in an email interview.
Norfolk attorney Mark Katchmark with Willcox & Savage said that's been the culture of the court dating back to when Judge Walter E. Hoffman strolled the marbled hallways of the building that now bears his name. Hoffman began making changes in the 1960s that led the court to become the fastest in the nation. (Some years it slipped out of first place but it was first again in the latest figures released in March 2010.)
"That is something that the judges have always believed strongly in and the bar has believed in," Katchmark said.
Lemley authored a study last year that showed patent cases in the Eastern District of Virginia between 2000 and 2010 were resolved in less than eight months. Of 373 patent cases filed in that time, defendants won only 32 of them. The vast majority were settled out of court, according to the study.
The legal community knows this well. As a result, the district became a favored venue for patent plaintiffs, leading to "a herd mentality," Lemley said in the study.
And juries will tend to be pro patentee, the study says.
The eBay and Verizon jury verdicts are examples of that. A jury here earlier this year awarded $115 million to a California tech company (founded by a Virginia Beach man) after finding that Verizon infringed on the tech company's patent. The case is being appealed. A jury in 2003 ordered eBay to pay $35 million to a Northern Virginia patent owner for infringing on his patent. The case was later settled out of court while on appeal.
Katchmark said he often recommends that patentees file their lawsuit in the Eastern District of Virginia. Cases can be filed just about anywhere; all that's required is that the plaintiff or defendant live, work or conduct business in the district.
"Personally, yes. I believe the advantages of the Eastern District, both on speed and the experience and quality of the judges, I would recommend filing in the Eastern District of Virginia," he said.
Tim McGlone, (757) 446-2343, tim.mcglone@pilotonline.com
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