Orange County’s federal district judges have been a key to the emergence of Santa Ana as a venue of choice for patent litigation among lawyers throughout the U.S.
Another factor: a diverse economy driven by intellectual property in industries ranging from computer chips and medical devices to traditional manufacturing of everything from patio furniture to slot machines.
Add those up, and the Santa Ana court for the southern division of the U.S. Central District has become one of the most popular places in the U.S. for filing patent cases—on par with the historically patent case-heavy Eastern District of Texas and District of Delaware courts.
“It’s the judges—that’s what’s driving it much more than anything else,” said Joseph Re, a litigation partner at Knobbe Martens Olson & Bear LLP. The Irvine-based firm focuses exclusively on intellectual property work and is the largest law office in the county.
“Very Efficient”
Re said the OC court functions in a “very efficient” and systematic way, pointing to its patent judges’ practice of posting tentative rulings online on Fridays for lawyers to access in advance of potential hearings on Mondays. It’s something that’s more common in state courts but still unusual at the federal level.
“That’s an effective way of getting decisions to the parties throughout the course of a case,” he said. “It’s very common here.”
Issuing drafts of tentative rulings before hearings—and having hearings at all—are procedures U.S. District Judge Andrew Guilford said he appreciated when he was a practicing lawyer. Guilford, a patent judge in the Santa Ana courthouse, worked at Sheppard Mullin Richter & Hampton LLP in Orange County for more than 30 years before George W. Bush appointed him to federal judicial service.
“I think tentative rulings are a positive thing that could attract lawyers to get their cases into our division,” Guilford said. “Sometimes it’s inconvenient, but if the attorneys appreciate it, we’ll do it. We think those steps help the process and pursuit of the goal of justice. Fewer judges seem to be even having hearings on things in general. Judge [James] Selna and I still have hearings. Today’s Friday, so I’ll be working pretty hard and late today to get the tentative out for Monday’s hearing.”
Selna is the other “patent judge” at the Santa Ana court. Others resident at the local courthouse, who also hear patent cases but aren’t necessarily focused on them, are judges Cormac Carney, David Carter, Josephine Staton and Alicemarie Stotler.
Not that the patent judges only work on intellectual property cases. Selna, for instance, has managed the ongoing, multidistrict consolidated litigation involving hundreds of lawsuits against Toyota Motor Corp. over charges of sudden-acceleration problems in its vehicles.
“Our other cases … It’s everything that gets filed in federal court,” Guilford said. “Whether handling criminal trials, major patent cases in OC, all the district judges are handling these. I like all my cases. It’s just that it’s a fascinating and important time in patent law. I like the fact that we’re particularly involved in that.”
Also funneling patent cases to the Santa Ana court is its place in the federal patent pilot program, a 10-year initiative Congress launched in 2011 to “enhance expertise in patent cases among U.S. district judges.”
Volunteers
The court for the Central District of California and 13 other district courts were selected for participation in the program. Six of the 60 or so judges in the Central District are taking part, including Selna and Guilford.
“We volunteered for it,” Guilford said. “There was a legitimate debate about whether [the program] was a good idea. Some thought that federal district judges should not specialize, so the debate went on. Eventually the Central District decided to be part of the program, and I decided I wanted to be one of the judges.”
The program is designed so that a patent case filed in a participating district court can either be handled there or be reassigned to one of the pilot-program judges.
“That has increased the number of patent cases for people in the program like me,” Guilford said. “I get many more patent cases than I would otherwise.”
Business Journal research using data from Justia, a Mountain View-based legal resources firm, found that 40 patent cases were filed before Guilford in 2013 and 37 in 2012. The total for the past two years surpassed the numbers for the four previous years combined.
Selna said the pilot program is bringing “almost 50% of all patent cases and concentrating them among a handful of judges who really have an interest” in doing patent work.
“That’s always helpful when a judge has an interest,” he said. “It helps increase their proficiency. There’s a synergy when you have that many judges doing the same thing.”
View From Texas
The Eastern District of Texas unwittingly gave the Santa Ana court a hand in its development as a patent law center by way of its propensity for jury trials, said Brett Williamson, a partner in O’Melveny & Myers LLP’s office in Newport Beach and a founding member of the firm’s intellectual property and technology practice.
“There were a handful of judges in the Eastern District of Texas who were interested in patent cases, and they felt that patent cases should have the benefit of a jury to hear them,” Williamson said. “The court developed a reputation for allowing cases to go to trial. That attracted plaintiffs who wanted a jury trial, and from then, it was a snowball effect.”
The Texas court racked up a backlog of cases over time, he said, and a subsequent slowdown in the trial period.
“It still remains a very attractive forum for plaintiffs who want to file, and they’re more likely than average to get a trial,” Williamson said. “But there’s not nearly the same fast track as there used to be.”
It takes about 25 months for the Central District verses about 28 for Texas—“not … a huge difference … but the important point is the trend line,” he said. “The latter district’s time to trail keeps getting longer and longer.”
Growth Market
Patent litigation has been on an uptrend in the U.S. in general, buoyed by corporate America’s rising interest and investment in intellectual property, as well as by a growing number of individuals and nonpracticing entities that are trying to monetize patents, said Kenneth Parker, a partner at the Irvine office of Haynes and Boone LLP.
Parker pointed to the America Invents Act passed in 2011 that makes it tougher for a plaintiff to consolidate multiple defendants into one patent-infringement case.
“Then it becomes more important about where you file,” Parker said. “And generally speaking, other things being equal, you’d prefer to litigate in a county where you live as a corporation, [where] you’re involved … and well regarded.”
Orange County’s profile as a hub for intellectual property-oriented businesses has paralleled the development of the local court and the legal practice here, said O’Melveny’s Williamson.
“What’s notable about the technology- and intellectual property-based businesses in the county is how diverse the field is,” he said, citing the pharmaceutical, semiconductor, software and entertainment business sectors. “There are patent cases that we handle that are even ‘low tech’—I personally handle cases dealing with consumer products—things like patio tables. One of my practice areas is in the gaming area, like patents on slot machines and casino management systems. All these sub-areas of emerging technologies are represented here. I think that benefits legal practitioners. We become familiar with and comfortable with a wide range of technologies.”
Local Economy
Selna said Orange County’s economy has transformed in the years he’s been a lawyer and a judge here.
“It was a real estate-driven economy when I moved down in 1983,” he said, recalling his career at O’Melveny. He joined the firm in 1970 in Los Angeles as an associate and moved to its Newport Beach office in 1983 as a partner.
“Today OC’s economy is high-tech, medical, pharmaceutical … an entirely different business community,” he said. “One parallel is that the 30 to 40 major law firms in the U.S. have located offices in OC. You have a talent pool here, as well as the court.”
The proximity of the district court is crucial to the businesses here, Selna said, especially considering those companies are the primary generators of intellectual-property issues.
“It’s largely a function of where we are and the kinds of problems that the companies here have,” he said. “Most of the time, the plaintiff is here, or the defendant is here. I can’t think of any patent case that doesn’t have that link one way or another.”
Guilford and Re recently headed the establishment of a patent-focused group of judges, practitioners and other professionals in OC focused on intellectual property—a periodic gathering known as an “inn of court.”
“I’m excited about that—patent law is growing, and firms and courts that are serving the community need to be following it,” Guilford said. “I’m happy to see the Santa Ana court participating in this important debate in this important time.”
