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Wednesday, May 15, 2024 | Back issues
Courthouse News Service Courthouse News Service

The rise and fall of a Texas patent court

In a few short years, U.S. District Judge Alan Albright made himself one of the most powerful patent judges in the country. After criticism from federal officials and a court order reassigning cases, those days may be coming to an end.

WACO, Texas (CN) — Alan Albright arrived at the Western District of Texas in 2018, appointed by then-President Donald Trump as the top federal judge in Waco. He spent years in private practice before that, handling patent cases for decades.

Within months, Albright was positioning himself as the “go-to judge for patent cases,” as Clause 8, a podcast focused on intellectual property law, put it. He advertised himself publicly, speaking at conferences and touting the benefits of filing patent suits in his courtroom.

Albright was the only district judge in Waco. By filing a lawsuit there, lawyers could be almost certain they would get Albright.

“You can be assured if you're in my court, I will have read everything you have submitted," Albright told members of the American Intellectual Property Law Association at a meeting in October 2019. His presentation was entitled “Why You Should File Your Next Patent Case Across the Street from the ‘Hey Sugar,’” a reference to a nearby shop.

The sales pitch worked: By 2020, one study found, Albright was seeing hundreds of patent cases annually – more than 20% of all patent cases in the country.

Now, those days seem to be coming to an end.

In an order from July, Chief U.S. District Judge Orlando Garcia, the top judge in the Western District of Texas, issued new rules for patent cases. The order specifically targets Albright’s court, redistributing patent cases from Waco throughout the district.

It could be years before Albright finishes his current docket of patent cases. Lawyers who work with him expect he’ll remain a major player in the field, and they have nothing but praise for the judge.

Still, the rise and fall of Albright’s patent docket mirrors another court in Texas.

For decades, the Eastern District of Texas was the go-to place for patent suits, seeing around 40% of nationwide cases in its heyday. It developed a controversial reputation for accommodating “non-practicing entities,” companies that own patents but don’t produce goods with them. Critics sometimes call these companies “patent trolls.”

Courts intervened, including in the 2017 U.S. Supreme Court decision in TC Heartland v. Kraft Foods. New rules made it harder to sue international companies in places like the small East Texas town of Marshall.

Under the new rules, it was easier to find a basis to sue in Albright’s Waco court. The Western District of Texas includes Austin, a major tech hub where brands like Google and Facebook maintain operations.

As Albright’s caseload grew, he too came under scrutiny.

In a bipartisan letter in 2021, Thom Tillis, a Republic senator from North Carolina, and Patrick Leahy, a Democratic senator from Vermont, asked Chief Justice John Roberts to look into Albright’s court. The “extreme concentration of patent litigation” was creating “unseemly and inappropriate conduct,” they wrote.

Roberts seemed to agree. In his year-end report for 2021, the chief justice zeroed in on the way patent plaintiffs chose venue.

While Roberts didn’t name Albright specifically, he expressed concern about rules like ones in the Western District that allowed a patent plaintiff to “select a particular judge to hear a case.” He warned the phenomenon could hurt “public confidence in the courts” and called for “random assignment of cases.”

Talk to lawyers who have had cases with Albright and the picture gets more complicated. Many, including both plaintiff and defense lawyers, described Albright as a fair-minded judge who simply loves patent cases and is good at them.

“There are benefits of having a patent case heard by Judge Albright,” Andy Powell, a Waco patents lawyer who typically handles defense, said in an email. Albright and his staff are “extremely well-versed in patent issues," Powell said.

U.S. District Judge Alan Albright speaks to lawyers during a virtual Q&A about intellectual property law in 2020. (YouTube screenshot via Courthouse News)

Albright is “one of the most affable people to put on a robe,” Erick Robinson, a patent lawyer who once ran a blog about patent cases in Waco, said in a phone interview. If patent owners were drawn to Albright’s court, he said, it was simply because they could get a “fair shake.”

“I’m not aware of a single lawyer who thinks Judge Albright is anything other than fair,” said Robinson, who has worked as both a plaintiff and defense lawyer in patent cases. He contrasted this with other districts, including the Northern District of California, where he said “the largest tech companies in the world” prefer to have cases “because they always win.”

Albright did not respond to multiple requests for comment for this story. In his interview with Clause 8, he said he’d loved patent law since the 1990s.

It was an “amazing combination” of trial law, nuances of the patent system and “learning about technology," Albright said of his career. To establish himself as a patent lawyer, “I just threw myself out there,” he joked. “Fortunately, I was able to fool enough people for long enough.”

Paul Gugliuzza, a law professor at Temple University, studies patent cases and has looked into Albright's court. In one paper, he and a co-author showed that Albright had adopted some of the same patent procedures as the Eastern District, which critics say skews in favor of plaintiffs.

In Gugliuzza’s view, there are problems with concentrating any type of case in a single court — regardless of the judge’s intentions or motivations.

“I think we should have some hesitation about giving one judge so much influence over patent law,” he said in a phone interview.

As Albright’s docket has grown, there’s also been an increase in what critics see as frivolous patent suits.

Take AML IP, a low-profile company with a registered address at a sleepy office park in Austin.

Since 2020, AML IP has filed dozens of patent lawsuits against major companies in Albright’s court, including Kohl’s, Bed Bath & Beyond, Nordstroms, Aldi and Blizzard Entertainment. Most recently, in a single day this month, AML IP sued three companies, including Ace Hardware, Bass Pro Shops and a New York hotel company.

AML IP has no apparent public presence and could not be reached for comment. When shown some lawsuits from AML IP, Gugliuzza said they showed why Albright’s court procedures were problematic.

“These cases are great examples of why patentees, particularly [non-practicing entities], really like Judge Albright,” Gugliuzza wrote. “He bends over backwards to avoid dismissing for improper venue.”

According to RPX Insight, a private firm focused on patent research, AML IP is linked to another intellectual-property company, Dynamic IP Deals. Its website advertises the company as “a full service intellectual property monetization firm.” It says it can help clients get “maximum yield” from their patents.

A lawyer for AML IP initially agreed to an interview but stopped corresponding with Courthouse News. Dynamic IP Deals also could not be reached for comment.

Profectus Technologies is another major patent litigant, including in the Western District, filing cases against companies like Apple, Kodak, Hewlett Packard and the Chinese telecom giant Huawei.

Steven E. Ross, a lawyer who represented the company, said his clients were two brothers who invented a digital picture frame in the 1980s that could respond to environmental conditions like ambient light. As personal digital devices surged with the advent of iPhone, the brothers felt that some of the richest companies in the world were using their patented invention.

Ross thought patent owners got an unfair rap. “It’s really come to the point where it’s almost as if anyone who files a patent lawsuit is labeled a troll or is somehow cast in a bad light,” he said.

“These big companies are coming along and using [private property] for their own benefit and not giving any compensation,” he added. “Wouldn’t that upset you?”

The new federal courthouse in San Antonio, home court of the Western District of Texas. In July, Chief U.S. District Judge Orlando Garcia, the top judge in the district, issued an order reassigning patent cases from Albright's court. (Erik De La Garza/Courthouse News)

Just a few months after Garcia's order reassigning patent cases, it remains to be seen how it will affect Albright’s court.

With a huge backlog of patent cases, Albright still regularly rules on them. Recently, he declined several motions by defendants to transfer cases, including in lawsuits filed by AML IP.

Without reform, another judge could replicate the model used by Albright and the Eastern District of Texas, said Brian Love, a law professor at Santa Clara University School of Law who studies patents.

“At the end of the day, the thing that really allows the concentration of cases is when rural divisions are staffed by a small handful of judges or a single judge,” he said. Like Chief Justice Roberts, Love called for random assignment of cases. Most people “assume case assignment is random,” he added.

Part of the criticism of Albright comes down to “how you feel about jury trials," he said.

“Do you feel jury trials are sort of the first best way to solve legal disputes, such that we should send a lot of cases to trial even if it’s expensive and takes a long time?” Love said. “I think Albright and a lot of the judges in the Eastern District of Texas have that worldview, that jury trials are part of what makes the U.S. legal system exceptional.”

Jacqueline Altman, a Waco-based lawyer, often handles patent defenses before Albright. Like other lawyers who know him, she thought he handled patent cases in a fair and efficient way.

There is a “huge benefit” to trying patent cases before a judge who understood and liked patents, she said. As for criticisms that Albright has actively encouraged patent suits in his court, Altman said it was “unfair to latch onto a few [anecdotes] and pull them out of context.”

“Judges go around and they speak at local bench bars,” Altman said. “I don’t see [Albright] as being that different.”

Altman predicted it could be a year or more before the full effects of Garcia’s order play out. Like other lawyers who spoke to Courthouse News, she hoped the Western District would keep letting Albright hear patent cases — or at least hire more judges.

In other divisions of the Western District, including Del Rio, judges are often inundated with other federal matters like criminal and immigration hearings.

“I honestly think there would be benefit to bringing more justices into every district,” Altman said. “I think everybody would benefit.”

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