Kathi Vidal of Winston & Strawn.

Since the U.S. Supreme Court's venue-limiting decision in TC Heartland v. Kraft Foods Group Brands, it is clear that there is a significant shift in where patent cases are being filed, with many more cases in Delaware, some in Northern and Central District of California, and a growing number of cases filed in Waco, Texas.

But venue changes are not the only challenge law firm IP practices have been facing. According to Kathi Vidal, a veteran IP litigator and managing partner of the Silicon Valley office of Winston & Strawn, several recent Supreme Court decisions have created uncertainty with respect to patent subject matter eligibility—which some argue makes patents too easy to invalidate and discourages innovation. How these issues evolve could have a great effect on innovative companies, and the IP practices that serve their legal needs.

The Recorder caught up with Vidal at the 2019 Disruptive Technologies Legal Summit at Santa Clara University, to hear more about her observations of the changing landscape in IP litigation.

Editor's note: Vidal's answers have been edited for length, style and clarity.

Q: How have things changed after the TC Heartland decision? What is your observation?

Vidal: Everybody thought cases were going to go to Delaware, because they really thought it was all going to be based on incorporation. And what we have predicted is, based on your personal place of business and where the activities were, that we'd see a lot more cases in the Northern District of California.

We did a survey of all the companies in the Northern District and where they were incorporated and where their businesses were. And what we found was there was a lot of business in the Northern District and in the Central District. So we predicted that based on that factor, a lot of cases would be coming either to the Northern District or the Central. And the one thing that caused a deviation from all that is really Waco in the Western District of Texas, because that was a sleeper at the time TC Heartland came around. [There has been] a huge uptick of cases that are filed down in Texas, in this case, Western District versus these other jurisdictions. 

How have venue changes impacted your practice?

It hasn't impacted my practice because I litigate throughout the country, so I've never focused just on cases in the Northern District of California. And I think that's true for a number of lawyers. When the cases were primarily filed in Delaware and in the Eastern District of Texas, a lot of my cases [used to be] there. I represent a lot of clients in Silicon Valley, but I represent them no matter where they're sued.

Other than the TC heartland decision, are there any other trends have you observed with regard to IP litigation?

Other than TC Heartland, I would say it's a law around patent eligibility, which is called 101, it is the provision, that 35 U.S.C. § 101.

The way that law is being interpreted, is in such a way that many patents are being construed as being invalid. So that's the dilemma. So, there are many fewer cases being brought because the risk of bringing a case is higher. Because if you bring a case now, your patent might be killed early on, and you lose your asset. And you don't win the case. You wasted your asset, for no reason. Now, I do think that's going to change.

How and when do you think it will change?

It could happen anytime this year. So, the Supreme Court goes back into session in October, and there are cases in the queue. [If the justices] choose to hear on cert, that could dramatically change the law. That's probably the quickest way it'll change. There's also been testimony before Congress, there were two days of testimony … where a lot of companies have spoken up and said the law is broken [because] the law does not protect these emerging disruptive technologies.

Because right now, under the current law, it's difficult to have a patent on something that's, for example, [artificial intelligence] running on a computer. Even if you did [patent it], the courts would likely strike it as being patent ineligible. So, the companies have stepped forward and said the law needs to change, [and even] the Federal Circuit itself [has said so]. 

What do you see as the biggest challenge for IP litigation going forward?

I do think the law around [35 U.S.C. § 101] is the biggest challenge in not just where the law is right now, but coming up with laws that strike the right balance between protecting real innovation [and] allowing so many patents that there's no space to innovate. And that's going to be impacted not only by the actual Supreme Court and legislature in the way they evolve it, but [also by] some of these newer technologies like AI, [which] are going to challenge that system.