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Sunday, September 24, 2006
Courts - More on "Patent lawyers flock to East Texas court for its expertise and 'rocket docket' "
Marshall Texas was the subject of this March 27, 2006 ILB entry quoting from a story in the Dallas Morning News.
Today the NY Times devotes half its Sunday business section front page, plus two inside pages, to the story, reported by Julie Creswell. A few quotes:
What was remarkable about the trial was not the issue being tried or the arguments proffered by each side, but that these big companies — like dozens more from the East and West Coasts — wound up in the Federal District Court here in Marshall, the self-proclaimed Pottery Capital of the World and home to the annual Fire Ant Festival (sponsored by Terminix, the pest-control company).More patent lawsuits will be filed here this year than in federal district courts in San Francisco, Chicago, New York and Washington. Only the Central District of California, in Los Angeles, will handle more patent infringement cases.
On the surface, there is little to recommend Marshall as a locus for global corporations looking to duke it out over who owns the rights to important technology patents. Some 150 miles east of Dallas, and just minutes from the Louisiana border, Marshall and its 25,000 residents are fairly typical of most small cities in Texas. Marshall is a place where friendships last a lifetime and rivalries even longer, where residents still talk about the Civil War, debate on street corners about decades-old high school football games, and conduct midday business meetings over plates of meatloaf, mashed potatoes and banana pudding.
What sets Marshall apart from its neighbors is a red-hot patent docket. Four years ago, 32 patent lawsuits were filed in the Federal Eastern District of Texas, which includes Tyler, Texarkana and Marshall. This year, an estimated 234 cases will be filed in the district, a majority of them in Marshall.
What’s behind the rush to file patent lawsuits here? A combination of quick trials and plaintiff-friendly juries, many lawyers say. Patent cases are heard faster in Marshall than in many other courts. And while only a small number of cases make it to trial — roughly 5 percent — patent holders win 78 percent of the time, compared with an average of 59 percent nationwide, according to LegalMetric, a company that tracks patent litigation.
Those odds are daunting enough to encourage many corporate defendants to settle before setting foot in Marshall. Add to that the fact that jurors here have a history of handing out Texas-sized verdicts to winners. In April, for instance, a Marshall jury returned a $73 million verdict against EchoStar Communications for infringing the patents of TiVo. * * *
Oh yes, Ms. Mauthe added, Marshall and its robust legal community go back a long way. In the late 1800’s, she said, Marshall was a bustling city, a transportation gateway to the North, linking local cotton farmers and the Texas and Pacific Railway.
As the railroad was built, personal-injury lawyers came to town to represent injured workers. In more recent decades, Scott Baldwin, Franklin Jones and other Marshall-based plaintiffs’ lawyers generated tens of millions of dollars in fees — and grabbed the national spotlight — by pursuing class-action lawsuits against companies that used asbestos and silica, and against the pharmaceutical and tobacco industries.
By the late 1990’s, though, it looked as if the good times were ending for Marshall’s lawyers. Broad tort reform in the state had limited punitive damages and later capped damages on medical malpractice lawsuits, effectively limiting the fees that lawyers could make.
In Marshall, an oft-told joke is that the passage of tort reform was when many local lawyers made the trip from P.I. to I.P. — that is, they moved out of personal injury and into intellectual property.
That was the road traveled by Samuel F. Baxter, a former state district court judge who had become a personal-injury lawyer, after he received a call from a lawyer in Dallas in 1996, asking him to help out in a patent lawsuit in Marshall. “I told him, ‘No, I don’t know anything about patents,’ ” Mr. Baxter recalled as he reclined far back in his chair in his Marshall office, which included an autographed Cy Young baseball and aging maps of the United States depicting an outsized Republic of Texas.
Mr. Baxter was eventually persuaded to take the case and was the lead trial lawyer defending Samsung in a patent lawsuit filed by Texas Instruments, which eventually settled. Since then, Mr. Baxter, who is a principal at McKool Smith, a Dallas-based law firm with a full-time office in Marshall, has been involved in a number of patent cases; in one, he helped represent TiVo in its patent fight with EchoStar.
Charmingly loquacious about his two adopted sons and local Civil War history, Mr. Baxter turns economical with his words when asked why the federal court in Marshall handles more patent lawsuits than federal courts in much larger cities.
“One, speed kills,” he said. “If you’re the plaintiff, you can go fast and get a resolution faster here than you can a lot of other places.
“Second, there’s a dearth of good lawsuits these days for lawyers to handle,” he added. “You know lawyers: they go where the money is.”
Posted by Marcia Oddi on September 24, 2006 12:15 PM
Posted to Courts in general