In my latest Texas Monthly column, I discuss how the tiny East Texas town of Marshall became a haven for patent trolls. One of the few things that Barack Obama and Antonin Scalia may agree on is that Marshall may be the worst thing that ever happened to intellectual property law. Not surprisingly, the locals don’t see it that way.
Corporate executives across the world are familiar with Marshall, a town of 24,000 people about twenty miles west of the Louisiana border that over the past couple of decades has become the unlikely patent litigation capital of America. More than 1,500 patent cases were filed in Marshall last year, compared with about 1,300 in the entire state of Delaware, the jurisdiction in which most U.S. companies are incorporated. For more than a decade Marshall juries have meted out billions of dollars in patent awards for and against some of the world’s biggest high-tech companies. Apple, Samsung, Motorola, Dell, and Hewlett-Packard are just a few of the household names that have spent time in the Sam B. Hall Jr. federal courthouse.
. . . Not everyone is happy about what goes on in Marshall’s courtrooms. After all, there are no major corporate headquarters in Marshall. Yet thanks to federal law, which has traditionally allowed companies to file patent suits pretty much anywhere, the town’s remoteness has not been an obstacle. Over the years, Marshall has earned a reputation as the intellectual property equivalent of a speed trap, a place where juries smack big companies with huge judgments. And over the years federal lawmakers have tried to do something about it, with little success. The U.S. Supreme Court and the federal appeals court in New Orleans have enacted restrictions on new filings. Supreme Court justice Antonin Scalia declared Marshall “a renegade jurisdiction.” During his last State of the Union address, President Barack Obama was likely thinking about the town when he decried “costly, needless” patent litigation.