6 ms·

East Texas was popular with plaintiffs because it was very troll-friendly. East Texas knew what side it's bread was buttered. Delaware is popular with compani

• wahern 9y ago
  There are plenty of other states with more favorable tax laws than Delaware. Delaware is popular because of it's well developed corporate caselaw and unmatched judicial experience, which is particularly attractive to investors (i.e. potential plaintiffs) because it minimizes legal risk. If you want investment, there are only two states to consider when incorporating: your home state or Delaware. Any other state will give investors and their legal counsel pause.
  • dhimes 9y ago
    I thought Nevada was favorable as well. Perhaps only for certain types of companies?
  • CPLX 9y ago
    That's not quite true. States do specialize, for example Nevada is known for those seeking beneficial living trusts, Montana is known for holding companies for expensive motor vehicles, and so on.
  • godzillabrennus 9y ago
    Wyoming let’s you pay a registered agent to form a company using a nominee manager. You can pay in bitcoin with some of them. No wonder the USA is the best in the world at being a tax haven.
    • chimeracoder 9y ago
      > No wonder the USA is the best in the world at being a tax haven. The US could hardly be any less of a tax haven.
      • freddie_mercury 9y ago
        There is a large body of research and a wide variety of actors across the political spectrum who are all in agreement that the US is one the largest tax havens in the world. I can only assume that you've never been exposed to any of that and are simply making a knee-jerk reaction comment. Here's one recent report from just the past few weeks: "Report Says US Is World's Second Biggest Tax Haven": https://www.bloomberg.com/news/articles/2018-01-30/u-s-seen-as-world-s-second-biggest-tax-haven-after-switzerland https://www.bloomberg.com/news/articles/2018-01-30/u-s-seen-... There are many, many more such things written over decades. Here's a 2009 article from The Economist on the same subject of America's status as one of the world's premiere tax havens: http://www.economist.com/node/13382279 http://www.economist.com/node/13382279
      • gamblor956 9y ago
        You're technically correct, the best kind of correct. Most countries around the world have higher effective tax rates than the US, and this was true even before the tax cuts. (People who claim otherwise are citing flawed political studies that ignore how tax deductions and credits are actually used by companies, and the ultimate average corporate tax burden. Even in industries subject to high effective rates, like retail, they still pay lower effective tax rates than their Euro counterparts. If they're not, they need to hire better accountants.) The US is also the premiere information disclosure haven in the world...as long as you're comfortable sharing your info with the US government. We require most other countries to share financial information with us but we don't return the favor. But the fact of the matter is that the US is not an actual tax haven. We impose taxes and enforce tax collections. There are real tax havens, like the Isle of Man or the Cayman Islands, which don't have taxes and which have legal entity laws that promote tax-shelter holding companies.
    • deleted 9y ago
      [deleted]
• bluGill 9y ago
  These are federal courts - in theory state law differences should have no effect. In theory, a judge has a lot of ability to influence a result.
  • dragonwriter 9y ago
    State law differences do effect federal courts, but they don't affect federal law questions like patent law.
  • btian 9y ago
    Actually it's the juries in East Texas that are troll friendly
    • dragonwriter 9y ago
      Actually, its the local court rules in the US District Court for the Eastern District of Texas that are plaintiff-friendly in patent cases.
• DannyBee 9y ago
  "I would expect Delaware courts to will be very defendant-friendly." The main person dealing with patents as a whole there used to be Judge McElvie, https://en.wikipedia.org/wiki/Roderick_R._McKelvie https://en.wikipedia.org/wiki/Roderick_R._McKelvie (he's retired now). He wrote the model jury instructions for patents, etc I talked with him a number of times, and he seemed quite reasonable (he pushed folks towards settlement, tried to make sure patent cases had the expertise, in the form of special masters or whatever, that it requires for judges to understand them, etc) By statistics, Delaware was not "defendant friendly" in patent cases (There are some papers with the numbers i'm too lazy to look up, but google can find them for you) Can't say how it is now though.
  • DannyBee 9y ago
    FWIW: Recent data i saw tells me D. Del is not actually defendant friendly in patent cases :) https://www.bna.com/rural-texas-judge-n57982086954/ https://www.bna.com/rural-texas-judge-n57982086954/ If it was defendant friendly, they'd grant more summary judgement motions than most courts. They don't. They grant less. The graph difference is that they split the summmary judgement outcome more on both the positive and negative side (IE they grant in part, deny in part). It's hard to say more than that (because people who file in each court may file more types of claims, etc. So outside of the two extremes, which is grant in full or deny in full, it's hard to say whether the outcomes were "right") However, you can see ED Tx is plaintiff friendly by far.
• theandrewbailey 9y ago
  We might be seeing a gradual end to the oil well/rights to patent analogy. Except a patent troll doesn't work like that. Those work like this (keeping the oil idea): You acquire the rights and land to build a oil well. You dig one, and everything's great. It's all legit. Then someone comes along and says that because your dump truck looks an awful lot like his (which was stolen), all your oil belongs to him.
  • andrei_says_ 9y ago
    I think we could skip the stolen part.
  • wtetzner 9y ago
    > Then someone comes along and says that because your dump truck looks an awful lot like his (which was stolen), all your oil belongs to him. More like: your dump truck looks an awful lot like a drawing he has.
• rhino369 9y ago
  Delaware is still somewhat plaintiff friendly because the judges rarely grant summary judgement. Once you get to a jury, all bets are off as a defendant. If you think judge's are bad at technology, you should see how juries deal with it.
• deleted 9y ago
  [deleted]
• dragonwriter 9y ago
  > East Texas was popular with plaintiffs because it was very troll-friendly. Plaintiff-friendly, whether or not the plaintiff was a troll. And even that has noticeably been changing in the last couple years. > Delaware is popular with companies because of its tax laws. No, it popular because it is perceived as having both very well settled and very well understood corporate governance law, so that investors are secure. > Delaware knows what side it's bread is buttered. Delaware has only limited influence over the composition, court rules, and judgments of the US District Court for the District of Delaware, which the State of Delaware does not control. So, even to the extent that Delaware wants the court to rule a particular way, its ability to influence it is quite limited.
  • kelnos 9y ago
    ... and given that many companies are incorporated in Delaware, it's not unlikely that the defendant and plaintiff in a suit would often both be Delaware companies. So it's unclear that favoring one or the other would be better for Delaware from the perspective of maintaining their status as the go-to destination for incorporation.
• jldugger 9y ago
  One of the side effects of this dynamic is that there's less chance for a circuit split if the vast majority are filed in one specific circuit. Which is generally a precondition for Supreme Court cases, and leaves them somewhat helpless to grant cert on cases they'd otherwise prefer to overturn. > I would expect Delaware courts to will be very defendant-friendly. Not really a given when you're talking about companies suing companies. In fact the article even mentions a defendant's motion to dismiss was rejected. This suggests the company would have preferred to defend in a different court, perhaps California.
  • umanwizard 9y ago
    Can’t the Supreme Court grant certiorari whenever it wants to?
    • jldugger 9y ago
      Not without changing the rules they set for themselves: https://www.law.cornell.edu/rules/supct/rule_10 https://www.law.cornell.edu/rules/supct/rule_10 I'm not sure how the rules are established, but I assume it's something along the lines of the Senate rules (ie the filabuster) -- changes are subject to majority consent by vote.
      • umanwizard 9y ago
        That rule seems to be basically non-binding commentary. "The following, although neither controlling nor fully measuring the Court's discretion, indicate the character of the reasons the Court considers". And, in any case, the last possible reason reads: "(c) a state court or a United States court of appeals has decided an important question of federal law that has not been, but should be, settled by this Court [...]"
        • jldugger 9y ago
          What the court considers important is described later on. While the court can't establish any rules it cant later undo, it is a statement from the court and gives us an idea of when and why the accept the petitions they do. As I understand it, it's _very_ rare to grant cert 'because it's important we do so.' The court accepts something like 1 in 70 petitioned, and a very small number within there are granted under Rule 10(c).
• staticautomatic 9y ago
  I'm a jury consultant who regularly works on patent cases in both east Texas and Delaware. The judges in Delaware are definitely more friendly to defendants than in East Texas but that doesn't say much. From what I've observed, they're fine. They're actually not any worse on average than judges in notoriously defense friendly venues like Northern California San Jose division. On the jury side, I'd say Delaware is fine for either a plaintiff of defendant. They're pretty even-keeled juries. You might expect Delaware to have fewer defense jurors than some venues because of the area demographics, but most Delaware jurors who would prove to be really bad for a defendant will be dismissed during hardship qualification and never make it onto the jury. There is definitely going to be a shift away from east Texas but it's not happening as quickly or precipitously as we (in the industry) thought it would be.
  • quickthrower2 9y ago
    > I'm a jury consultant who regularly works on patent cases Thanks for chiming in. There are a lot of "Go Delaware!" comments here, but it is easier to trust ones based on some experience/expertise like this.