In hilariously petulant move, Apple shuts Texas stores and reopens them few miles down the road – for patent reasons

In a remarkable effort to avoid future lawsuits, Apple will close two of its retail stores in east Texas and reopen them at a new location a few miles down the road – where they will no longer be subject to a patent-friendly court. The iGiant has two retail stories in the Eastern District of Texas, one of four legal districts …

[Yet Another Anonymous coward]

Perhaps an empty gesture

If East Texas promotes itself as a location for patent suits then companies will vote with their feet.

If it means that high tech refuses to build factories/RD/stores there, then the state might reconsider how much it makes from court fees.

Legally it isn't going to make any difference, the plaintiff just has to have a presence there, which can be as simple as trying to make a single sale . It's like celebs only having to show that a single person in the UK saw some online posting to allow them to sue in libel friendly London courts

[Rustbucket]

Re: Perhaps an empty gesture

I believe you are mistaken. If Apple has no form of business presence in East Texas then there's no particular legal argument for a patent case to be heard there. This means no offices, warehouses or stores.

And WTF Reg, are you really criticizing Apple for not wanting to fight cases in this notoriously troll-friendly shithole?

[JLV]

Re: Perhaps an empty gesture

Yup. Venue shopping aint what it used to be:

https://en.m.wikipedia.org/wiki/TC_Heartland_LLC_v._Kraft_Foods_Group_Brands_LLC

[Yet Another Anonymous coward]

Re: Perhaps an empty gesture

>If Apple has no form of business presence in East Texas then there's no particular legal argument for a patent case to be heard there

Generally the plaintiff gets to decide where a case is held. If I am a starving inventor in East Texas and those evil west-coasters at Apple stole my idea, then I want to defend myself here among my peers - not be forced to go to California against Apple's big city lawyers

(Strangely this same argument also seems to hold when it's a hedge fund/activist investor or Samsung doing the suing).

[Anonymous Coward]

Re: Perhaps an empty gesture

The plaintiffs would have to have a reason to file in east Texas. In the case of VirNetX, they are based in Nevada and would have a difficult time justifying to a court why the case should be heard in east Texas when neither company has a presence there.

But I guess nothing stops trolls from relocating their HQ in east Texas, or renting a mailbox there or something.

[midcapwarrior]

Re: Perhaps an empty gesture

Kind of the way Delaware works

[quxinot]

Re: Perhaps an empty gesture

>But I guess nothing stops trolls from relocating their HQ in east Texas, or renting a mailbox there or something<

Or more plausibly, their legal team.

[eldakka]

Re: Perhaps an empty gesture

Generally the plaintiff gets to decide where a case is held. If I am a starving inventor in East Texas and those evil west-coasters at Apple stole my idea, then I want to defend myself here among my peers - not be forced to go to California against Apple's big city lawyers

I think you need to brush up US Federal venue rules and on the recent precedent set by the Supreme court in the Heartland case as linked by JLV's post.

As per that article, 28 U.S.C. § 1400(b) defines that patent infringement lawsuits are to be held in the district court where the defendant (the party charged with patent infringement) "resides".

Prior to the Heartland case, this has been loosely defined, especially by the Easter District of Texas, where even - as you seem to be saying - selling product over the internet to a customer located in the district counted as "residing".

However, the Supreme Court tightened this up in the Heartland case, and basically said that a patent case has to be filed in a district where the defendant has a physical business presence in the district.

Previously, the Eastern District of Texas was allowing cases to be filed there if the defendant's had a remote worker who lived in that district and remoted into work from there. The Supreme Court has slapped this down. You need an actual bricks and mortar location that the business conducts business operations from. As in, a shop, or a headquarters, or some such. Having employees who work from that district, e.g. work form home and remote in, or selling to people in the district without having a physical presence (mailorder, internet ordering, etc.) is not sufficient.

Therefore by removing any business premises from the district should be sufficient to prevent Apple from being sued in the district.

[Dan 55]

Re: Perhaps an empty gesture

Wouldn't Apple have to refuse to sell online to addresses in the Eastern District of Texas too?

[Anonymous Coward]

Re: Perhaps an empty gesture

No, otherwise Amazon would have had to be collecting state taxes from day one, instead of avoiding it by locating their warehouses/datacenters in as few states as possible.

Presence in this case means they have to be conducting business in the district. When they sell an iPhone on their web site, the transaction doesn't take place in the buyer's home. The one with the presence that extends to every address in the US is the company delivering those iPhones, FedEx. If Apple did like Amazon is rumored to do eventually and do their own deliveries, then they'd face this issue.

[kain preacher]

Re: Perhaps an empty gesture

Ahem one problem with your logic. This is a federal court. The sate has no say in patent disputes .

[kain preacher]

Re: Perhaps an empty gesture

To the person that down voted me please explain to me how individual states have control over patents, patent law and patent trolls . All patent law suits are filed at the federal level .

[Lost In Clouds of Data]

Re: Perhaps an empty gesture

See below after your second post on this.

[Yet Another Anonymous coward]

Re: Perhaps an empty gesture

> All patent law suits are filed at the federal level .

But the courts/judges/juries deciding the case are local.

Murder is a federal crime, but if you are a white cop that shot a black man you want to be tried in Beverly Hills not South Central

[jilocasin]

Re: Perhaps an empty gesture

Sorry, but except for a few specific cases, in the United States murder is a _state_ crime, not a federal one. So in your example the cop would be tried in state court. This is why the federal government will often try a murderer for denying the victim their civil rights (a federal crime) in order to try the individual in federal court. A needed tactic especially in the 1960's southern states, when it was almost impossible for a white defendant to be convicted for murdering a black victim.

[Anonymous Coward]

Re: Perhaps an empty gesture

jilocasin wrote, "A needed tactic especially in the 1960's southern states, when it was almost impossible for a white defendant to be convicted for murdering a black victim."

Just the 1960's ?

[David 18]

Re: Perhaps an empty gesture

What a strange place the Disjointed States of America is.

[kain preacher]

Re: Perhaps an empty gesture

"courts/judges/juries deciding the case are local."

Again the courts and judges are controlled by the feds. The state gov ha nothing to do with it.

[midcapwarrior]

Re: Perhaps an empty gesture

Yes and no.

Federal judges are subject to approval by the Senate.

Each State Senator has a substantial say in the approval process and can keep nominations from coming up for vote.

[HunterofSnarks]

Re: Perhaps an empty gesture

Actually, the current Senate leadership has ended that tradition, and the local Senators no longer have hold power. But for most judges currently in office, that was true.

[Jtom]

Re: Perhaps an empty gesture

Federal Courts serve specific regions, aka districts. I have to assume that this slight move moves them from one federal district into another.

[Jim 59]

Re: Perhaps an empty gesture

"Apple is so infuriated at having repeatedly been found to have infringed VirnetX's patents that it redesigned its entire FaceTime system to get around the relevant patent and even cut off existing customers from the video-conferencing system if they didn’t install its "update.""

Translation: Apple made changes to comply with a legal verdict.

I was caught speeding on the M1 in 2004. I was "so infuriated", I paid the fine.

[David Nash]

Re: Perhaps an empty gesture

Not the same - I interpreted the point to be that, rather than license the technology, they redesigned it to not use that technology. You don't have that option if fined for speeding.

[tim 13]

Re: Perhaps an empty gesture

To use that a analogy, they took the training course rather than get the points

[Eddy Ito]

Re: Perhaps an empty gesture

But the judgement is still in place and they still owe VirnetX. Redesigning the software instead of licensing the technology is more akin to putting a governor on the car so they can't speed in the future. In both cases the 'fine' still applies.

[Graham Dawson]

Re: Perhaps an empty gesture

The "technology" in the patents in question appears to be related to DNS lookups, secure network communications (they all describe SSL or HTTPS in a round-about way), and network traffic shaping, none of which could be described as in any way novel. The only reason Apple lost this case was because of the venue, not the merits or otherwise of the patents (which are in the process of being invalidated, or have already been so, if what I'm reading is correct).

[John Brown (no body)]

Re: Perhaps an empty gesture

"Not the same - I interpreted the point to be that, rather than license the technology, they redesigned it to not use that technology."

And the fact they have worked around the offending patents means they effectively admit they were wrong to abuse the patents, yet they are still appealing the verdict and fine. That should go down well at the appeal.

[Anonymous Coward]

Re: Perhaps an empty gesture

After recent changes to the law in England and Wales, libel tourists now head to Belfast rather than London, since the DUP and friends dont always see themselves as an intrinsic and indivisible part of the UK.

[Wandering Reader]

Re: Perhaps an empty gesture

"After recent changes to the law in England and Wales, libel tourists now head to Belfast rather than London, since the DUP and friends dont always see themselves as an intrinsic and indivisible part of the UK."

Surely in your example it was England and Wales that broke ranks. Must everyone else conform?

[TomG]

Re: Perhaps an empty gesture

I am rather sure the state does not make any money from Federal courts.

[werdsmith]

Re: Perhaps an empty gesture

I can understand the law being inconsistent because of incompetence or because it's not practical to define things in a clearly deterministic and objective way.

But for a law within a nation to consistently apply differently because of a geographic location is a crock of shit.

[JLV]

Regardless of what Apple is up to, I find it rather strange to read, here of all places, an article in any way sympathetic to the troll-friendly juries of East Texas. This particular district having long promoted itself as a haven for some of the worst parasites in the patent troll ecosystem.

[Anonymous Coward]

re: worst parasites

This site (writers and commendards alike) really does not like Apple so give a small thumbs up to the East Texas patent trolls is not that unexpected.

That said, there are an awful lot of shyster lawyers in East Texas who will be wondering where their next fat paycheck is coming from. If Apple can move out so can all the other tech companies.

The thought of Lawyers suffering financially is really good news to me.

In the USA, there are already far too many Lawyers. Their good friends in power (usually Lawyers who became Politicians) will just pass more and more laws just to keep their bretherin employed.

[Anonymous Coward]

Re: re: worst parasites

Companies like Apple will move out, but the trolls like VirnetX will relocate their HQ from Nevada to east Texas so they can continue suing there. Maybe someone should build an office building in east Texas that caters to patent trolls, down the street from the federal courthouse. It would consist of closet size offices that give them "presence" in the district, and a reception desk in the front manned by someone who is "technically" a part time employee of all the troll tenants, empowered to sign for any countersuits that are delivered to their address.

[Claverhouse]

Re: re: worst parasites

Maybe they can get it renamed Troll Town, just as New York needs to be renamed Trumpton after her most famous son.

[Anonymous Coward]

You Bastard!

Trumpton was a happy childhood memory for me until today.

You utter Bastard!

:-)

[eldakka]

Re: re: worst parasites

but the trolls like VirnetX will relocate their HQ from Nevada to east Texas so they can continue suing there.

That won't help them. In patent cases you have to file in the defendant's district, not in the plaintiff's district. So it doesn't matter where VirnetX has its HQ. If VirnetX wants to sue apple what matters is where Apple's physical business presences are located.

[Mr. Flibble]

Re: re: worst parasites

That's exactly what happens, watch this: https://www.thepatentscam.com

[fajensen]

Re: re: worst parasites

With Apple's money ... would it not be easier, more satisfying and more in the line with the writings of William Gibson that made dystopian IT-libertarianims seem like a Cool Thing, to pay for some uniquely equipped private outfit like SAIC to do a drone strike on VirnetX HQ?

[Whyyousotroll]

Re: re: worst parasites

Considering that the corresponding patents came out of SAIC, don't think this is an option.

[Zimmer]

Re: re: worst parasites

...Their good friends in power (usually Lawyers who became Politicians) .. reminded me of this Tom Paxton song.

... https://www.youtube.com/watch?v=PrHno5Xx5Kw

[John Brown (no body)]

Re: re: worst parasites

"That said, there are an awful lot of shyster lawyers in East Texas who will be wondering where their next fat paycheck is coming from. "

East Texas shyster lawyers. Why do I get a mental image of someone who looks a lot like Boss Hogge?

[heyrick]

an article in any way sympathetic to the troll-friendly juries

The article is gloriously taking the piss out of Apple.

Implying anything good about patent trolls is merely collateral damage...

[Velv]

Maybe we should encourage them to rename it Mos Eisley

[EnviableOne]

never find a more wretched hive of scum and villainy

Nah thats Washington DC

[vtcodger]

Apple's still going to be sued

Apple will surely still be sued. And they surely know it. They presumably just want to escape the frequently bizarre results of jury trials in the Eastern District of Texas and are willing to give up a few sales in order to get their cases into the second most plaintiff friendly court in the country wherever that might turn out to be. I'm not Apple compatible and have always found their stuff to be expensive and not especially usable. I don't own or use anything Apple. But the US patent system is an affront to civilization and I can't say that I blame Apple for taking one small step toward protecting themselves from it.

[dynjo]

Anything that hurts troll friendly states or patent trolls in general is a good thing, whether from Apple or anyone else. This is the stuff that holds back innovation.

[kain preacher]

States don't have any thing to do with patents. it's at the federal level.

[Lost In Clouds of Data]

You may want to educate yourself on Patent laws in the USA before posting in the future...

... because whilst you are correct that this is a federal matter, that has never precluded plantiffs from shopping for patent friendly (Federal) district courts to adjudicate the case with, and the court with the biggest hard-on for patent trolls is the Eastern District, located in Marshall, Texas.

This however somewhat changed in 2017 when SCOTUS ruled unanimously in TC Heartland v. Kraft Foods. This ruling has now prevented the previous manner where plantiffs got to pick any court they wanted (e.g. the aforementioned Eastern District in Tx) and instead forced them to have to pick one in same district where the defendant was either incorporated or had business.

So yes, Apple's idea has merit. Whether it succeeds is yet to be seen.

[Lost In Clouds of Data]

Re: You may want to educate yourself on Patent laws in the USA before posting in the future...

Clarification: the Federal Eastern District of Texas is obviously more than just Marshall, Tx. Marshall however is apparently the most patent troll friendly courthouse in that federal district.

The district does also include the courthouses in Beumont, Lufkin, Sherman, Texakana and Tyler.

Apologies for any inaccuracies - long day, late night!

[Anonymous Coward]

Re: You may want to educate yourself on Patent laws in the USA before posting in the future...

But how does that make the state friendly to patent trolls ?

[Truckle The Uncivil]

Re: You may want to educate yourself on Patent laws in the USA before posting in the future...

>But how does that make the state friendly to patent trolls ?

It doesn't. But when a Federal Court District occupies the same physical area one can loosely speak of the state rather than lengthily named court district. Just normal human imprecision.

[Anonymous Coward]

Author of the article thinks there's nothing different about Eastern District?

"And that implies that somehow the Eastern District exists in its own special world. It doesn't."

Then why were the majority of plaintiffs seeking to have the patent infringement hearings there? Maybe it's the fact that they had the highest rate of finding for the plaintiff?

In the author's eagerness to cast Apple's move as petulant they've completely missed the mark here. Poor article.

[Lost In Clouds of Data]

Re: Author of the article thinks there's nothing different about Eastern District?

It's not for nothing that Marshall (pop. ~25k) located in the backwaters slice of Eastern Texas, had plantiffs filing something 40% of all the patent cases there in 2015!

[Frank Marsh]

Re: Author of the article thinks there's nothing different about Eastern District?

Lost In Clouds of Data is on the mark. I wonder if s/he is a patent attorney.

Eastern District of Texas has waned as the mecca of patent trolls, but in its heyday companies like Samsung were building ice skating rinks outside the courthouse. This article is instructive: https://hbswk.hbs.edu/item/why-south-korea-s-samsung-built-the-only-outdoor-skating-rink-in-texas

There are many ways that, even with a single federal body of law in common with other districts, a judge can advantage one side over another. Procedural rules, as one example, are specific to different districts.

[Anonymous Coward]

Re: Author of the article thinks there's nothing different about Eastern District?

East Texas has the smartest inventors, of course

[armster]

Winning is loosing

--What makes the move all the more ridiculous is that for it to make financial sense Apple would have to be sued for patent infringement in future - and lose.

This is utter BS. With the cost of lawyers in the US Apple has to win one or two cases and still be out more money than those two stores bring in in a year. Just being sued is expensive, which is why companies settle. Apple has actually been better than most companies in that they have fought many troll suits rather than settling in the effort to starve the troll population. Unfortunately that works only if most companies fight rather than settle.

Makes you wonder if the Author holds stock in one of those troll funds...

[Captain Queeg]

Mr grumpy

Not at all a comment on the facts, but is this story really “Hilarious”?

I’m getting tired of overexcited clickbait hyperbole like this in headlines, regardless of the organ.

Other suspects:

* Bombshell

* Revealed

* Destroyed

The only saving grace I suppose is that hilarious wasn’t capitalised for effect.

I think I must be getting old...

[caffeine addict]

Re: Mr grumpy

It's hyperbole, but it's hardly clickbait when the article content is summed up in one sentence.

It's not like it said "Apple moves shops 10 miles down the road, and you won't believe the hilariously petulant reason!"

[Captain Queeg]

Re: Mr grumpy

Not really sure even the reason however petulant is “hilarious” and herethe word tries to set up potential readers for far more juice than’s there, but YMMV.

As I say, I’m probably just getting old.

[Pier Reviewer]

“On one level the decision to move doesn't make a whole lot of business sense: its current locations are prime spots in a growing market. And its new store is close to another two Apple stores. But when an upset Apple exec doesn't get his way, all the toys come out the pram.”

I rather suspect those two retail stores don’t make $300m+ revenue* so it looks like a net gain if Apple avoid one spurious case. Plus, legal teams ain’t free/cheap. Just avoiding some cases can save them money. Missed the mark with this one guys and gals.

* I know Apple gear is ridiculously overpriced, but you’d have to sell at least 5 MacBook Pro’s a week to make that kind of money...

[Claverhouse]

Plus if they're in prime location, no trouble in getting the best price when selling them.

[sabroni]

wow

Satire really flies over most people's heads.

Don't let the negativity get you down ElReg, American's have always had difficulty with this stuff. It requires an understanding that the world isn't binary.

[caffeine addict]

Re: wow

Are... are you saying the only two options are "it is binary" and "it isn't binary"...?

[Just Another SteveO]

Re: wow

‘Americans’ is the plural. And not sure what you are trying to say with the ‘binary’ bit but the article was shit so scores a ‘0’ for me, not a ‘1’

[werdsmith]

Re: wow

Re: wow

‘Americans’ is the plural

tell it to my autocorrect 'cos I ain't lisning.

[Chairman of the Bored]

My daughter learned in medical school...

Feed a cold. Starve a lawyer.

[usbac]

Re: My daughter learned in medical school...

If I were a doctor, I think I would refuse to treat lawyers. Mostly just out of self preservation!

At least make them sign a release before treating them. Unconscious, too bad!!

[Chairman of the Bored]

Re: My daughter learned in medical school...

She told me a case where that happened. In Texas, but I need to ask her where.

Here is the deal: in the US, OB-GYN have a rough go of it because they get sued about once per year. Some of the cases are legit, but mostly its due to reality: birth defects sometimes happen. Its a tragedy for the child and parents but stuff happens. Usually the OB is sued.

One particular lawyer in TX apparently built a lot of his firm around suing OB's specifically. So the OB practices in his town refused to serve his pregnant wife, and she had to seek all pre-natal and delivery services elsewhere. So he sued every doctor. And lost, (Yesss!!!!)

Unless you discriminate against someone who can scream loud and long to the press, you can still refuse service in the US.

[Christoph]

Makes perfect sense to me

If the people of East Texas want to keep letting copyright trolls win, then it makes sense for every company that can do it to have no presence in East Texas. They may need to also refuse to deliver internet orders to any address in that area. The residents can then either drive al long way any time they want to buy something, or sit at home and chip flint. Or stop supporting copyright trolls.

[TomG]

Re: Makes perfect sense to me

The people of East Texas have nothing to do with the presence of Federal courts. Their location is determined by the Federal government, based on population and distance. The closest it comes to being "the people of East Texas" is the 12 people in a jury trial. Similar to the court in California that caters to liberals.

[codejunky]

hmm

It does promote the idea that if you keep shafting those who have money they will move.

[Stuart21551]

"It first lost the case in East Texas in 2012 and was ordered to pay $386m; it has since dragged the case out so long that the interest it has accumulated while appealing and refusing to pay the fine has hit $93.4m"

This is exactly the same way the USs' best inventor was hounded to death by The Radio Corporation of America.

Under no circumstances should appeals be accepted by the court unless previous awards have been paid.

Intellectual Property Rightful Owners Action Group.

[poohbear]

According to a doccie on the subject, "because of what are perceived to be patent-friendly judges " ... who have lawyer sons who happen to practice patent law ... from the suing side.

And people wonder why they always win ....

[Anonymous Coward]

"Risk of being sued."

My boss made decisions based on his perception of the risk of being sued.

I disagreed with this approach, and explained that anyone can sue anyone for any (or no) reason.

He disagreed with my point, and he claimed that I was totally wrong.

So I sued him, in order to make the point clearer to him.

[WatAWorld]

Nothing petulant about it, it is good business sense and should be copied by others

Nothing petulant about it, it is good business sense and should be copied by others.

Ideally all tech firms would leave East Texas, and then East Texans would stop electing these troll friendly judges.

Why make things easy for East Texans when they're making life miserable for you and your company?

[WatAWorld]

Hilarious, yeah.

"It doesn't. Patent experts say it is just as likely that the Western District – which is where the new store will be – will decide against Apple in a future patent case."

You might find some lawyers who claim to be "patent experts" who say that.

However, successful patent attorneys bring their claims to East Texas because successful patent attorneys believe that East Texas is better than any other district in the USA for winning their cases. Ask the guys bringing the claims and winning their cases -- they're the real patent experts.

[Anonymous Coward]

Why are VirnetX patent trolls?

Just my thought's but if you create a patent is it not the duty of the company to protect said patent? Also if someone is developing technology is it not their responsibility to make sure that there is no existing patent for that tech? And if you do not check and make sure then should you not be held responsible if you are sued for this? And if the engineers admit in a court of law that they did not even check to see if there was something like this it is an admission of guilt and should be held liable?

Just wondering. Because the term patent trolls seems to sound like someone who has vaporware not someone who has clients, serves the US intel community and beyond... just wondering because seems like a bunch of Apple trolls on here..