The Supreme Court has finally ruled on the venue shopping by patent trolls:

The US Supreme Court ruled (PDF) today on how to interpret the patent venue laws, and the controversial business of “patent trolling” may never be the same.

In a unanimous decision, the justices held that the US Court of Appeals for the Federal Circuit, which handles all patent appeals, has been using the wrong standard to decide where a patent lawsuit can be brought. Today’s Supreme Court ruling in TC Heartland v. Kraft Foods enforces a more strict standard for where cases can be filed. It overturns a looser rule that the Federal Circuit has used since 1990.

The ruling may well signal the demise of the Eastern District of Texas as a favorite venue for patent lawsuits, especially those brought by “patent trolls,” which have no business outside of licensing and litigating patents.

The TC Heartland case will affect the entire tech sector, but the parties here are battling over patents on “liquid water enhancers” used in flavored drink mixes. TC Heartland, an Indiana-based food company, got sued by Kraft Foods in Delaware, then sought to move the case back to its home turf. Neither the district court judge nor the Federal Circuit would allow such a transfer.

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Not a word about “patent trolls” appears in today’s 13-page opinion, but it’s no secret that do-nothing patent holders were the issue at the heart of the contentious debate over patent venue. Plenty of companies had reason to complain about the Federal Circuit’s rule, and they let their concerns be known. A brief (PDF) signed by 48 Internet companies and retailers asked the Supreme Court to uphold the “restrictive patent venue statute” that Congress had approved, and to “stop forum shopping.” Trade groups representing bankers, realtors, and big software companies also supported TC Heartland.

The Texas attorney general, joined by 16 other states, filed a brief (PDF) as well, noting the incredible concentration of patent cases in the Eastern District of Texas. The AGs sided with TC Heartland, writing that they “have an interest in protecting their citizens from abusive claims of patent infringement, which businesses and residents confirm are a drag on economic growth.”

Finally, the Electronic Frontier Foundation, Public Knowledge (PDF), and Engine Advocacy (PDF) chimed in, complaining that the venue rules had empowered “patent assertion entities” to the detriment of small innovators.

The Eastern District of Texas figures prominently because federal judges have the ability to set their own rules, and the judges in this district are basically the patent trolls bitches.

There are blocks of offices in east Texas that are empty but have tenants.  They are rented by venue shopping trolls.

Putting an end to this is a good first step in ending patent abuse.