- Almost one in five patent cases filed in the US last year went to a new judge in Waco, near Austin.
- “Patent trolls” love Judge Alan Albright’s speedy procedures, and everyone admires his patent savvy.
- A Waco jury recently awarded a Fortress entity $2.2 billion in a dispute with Intel.
- See more stories on Insider’s business page.
It’s hard to find a lawyer who doesn’t like Judge Alan Albright, the new federal judge in Waco, Texas. Even those who have previously sparred with him in the courtroom.
“He’s kind of one of these folksy, got-along-with-the-jury kind of lawyers,” said Erich Spangenberg, an attorney and businessman who sued a company that Albright, before becoming a judge, was defending. “I wanted not to like him, but I couldn’t.” After the trial, which Spangenberg won, he and Albright went out for beers.
But the lovefest stops when Big Tech companies want the patent lawsuits filed against them removed from Albright’s Waco courthouse.
Last year, Adobe accused Albright of engaging in “sheer speculation” when he held onto a case against it instead of sending it to a San Francisco court. Apple accused him — by name, instead of saying “the district court,” a deferential euphemism most lawyers use — of encouraging its adversaries to “judge-shop.” Intel said he was “rushing to trial” in a pandemic. Higher-court judges have sometimes agreed. In February, a panel of judges from the 5th US Circuit Court of Appeals said Albright showed a “blatant disregard for precedent” by letting a transfer motion languish for eight months.
Albright doesn’t seem to mind. Having been a trial lawyer, he understands that you sometimes have to go all-out for a client. “There’s not a single appellate brief of something I’ve done that doesn’t criticize what I did,” he told Insider. “So I don’t read any of that stuff.”
In just more than two years, Albright has become the nation’s busiest patent judge, with many lawyers praising his speediness and patent savvy. His court is a patent-law factory: Almost 800 patent lawsuits were filed with him last year, a fifth of the nation’s total. And yet he’s also become a magnet for “patent trolls” and faced criticism from appeals judges and companies that frequently face patent lawsuits. Some have questioned how long he can keep up his breakneck pace.
‘He just had this vision for Waco’
Judge Albright isn’t responsible for the Waco’s recent resurgence on the national scene. Chip and Joanna Gaines, the husband-and-wife home renovators at the center of the HGTV series “Fixer Upper,” can take much of the credit for that. The city is also home to Baylor University, whose football team draws huge crowds. But Waco also has a growing community of entrepreneurs, and Albright’s mission to hear more patent cases has gotten him noticed by the local tech crowd.
Albright, a Pennsylvanian by birth who grew up in Texas, has been described as outgoing and hardworking. He often starts work days with a run around Waco, and he has held hearings by phone while spinning on the training bike he has set up in his judicial chambers. Even on vacation, the judge has said he often works an hour or two a day to move cases forward.
Albright still lives in Austin on weekends, and for a time, he would ask lawyers to record audio versions of their written arguments so he could listen to them on the two-hour drive home. He no longer does that, but he still gets work done on the commute, often with a clerk or his technical adviser, Joshua Yi, sitting with him.
As a district judge, Albright has to handle all sorts of cases, from minimum-wage lawsuits to drug-trafficking prosecutions. But he loves patents; he teaches a course on them, and he compared the first patent trial he presided over to watching the Super Bowl or the Olympics.
Albright traces his fascination with patents to his time as a young magistrate judge in Austin in the 1990s. District judges typically delegate the less sexy parts of litigation to magistrates, and as Albright recalls, the district judges in Austin felt that way about patent cases. He was a generalist when he took the bench, but he was steeped in patent law when he left in 1999. He decided to turn that expertise into a career and spent the next two decades as a patent litigator.
He got his chance to return to the bench after Donald Trump was elected president. While not a “very political person,” Albright said he had a good rapport with Texas Sen. John Cornyn, who had the power to nominate him for a federal judgeship.
He had good timing.
For decades, the Eastern District of Texas was the nation’s top venue for patent disputes. In 2016, 40% of all patent cases were filed there. But in 2017, the Supreme Court made it harder to file patent cases in which a defendant doesn’t have a “regular and established place of business.” The Eastern District of Texas isn’t home to many high-tech companies, and it quickly fell out of favor for patent litigants.
Albright said he was originally being considered for a federal judgeship in Tyler, in the Eastern District. But Albright saw that the Western District, which includes Austin and Waco, had the potential to be the next great patent-litigation venue. About two days after the Supreme Court’s decision in that pivotal case, known as TC Heartland, Albright said he made it clear he’d prefer to take the open seat in Waco instead.
Even before the Senate confirmed him in late 2018, Albright had ambitious plans, according to Lewis Tandy, one of his first clerks. Albright wanted to become the go-to patent judge, known for speed and fairness.
“He just had this vision for Waco and what it could become,” Tandy said. “About four to five months in, my co-clerks and I looked around and said, ‘Oh my gosh, there are so many patent cases getting filed here.'”
How patent cases work
Patents are far removed from the romantic ideal of an inventor toiling at a workbench, modeling microchips, or brainstorming on a whiteboard. While patents include a plain-English section that explains how an invention works and why it matters, the parts that courts focus on, “claims,” are as dry as West Texas dirt. They aren’t written to be read, so much as to be linguistic puzzle pieces that fit together just so. Write a claim too broadly, and it might get struck down; too narrowly, and the competition might work around your patent instead of licensing it.
Infringement cases tend to be drawn-out and expensive. They might start with a lawsuit and a request for an import ban on unlicensed products. Defendants might respond by filing an action called an inter partes review to try to annul the patents being used against them, spending a few hundred-thousand dollars to roll the dice and try to nip the case in the bud.
Most cases settle. But if they don’t, the lawsuit might end up going to discovery, then to trial. Then there are appeals: In a typical case with more than $25 million at stake, going that far can cost $4 million, according to the American Intellectual Property Law Association.
Lawsuits typically get filed where the parties live, where they’re incorporated, or where disputed events took place. But the ubiquity of high-tech companies gives patent owners much greater choice of where to file.
‘Patent trolls’ and Big Tech square off in Albright’s courtroom
The concentration of deep-pocketed tech companies in Austin, which is in the same federal district as Waco, makes the area a target-rich environment for patent holders. Even before executives like Elon Musk and Dropbox CEO Drew Houston made much-hyped moves to Texas, tech companies were taking root in the area. Companies including Apple, eBay, Facebook, IBM, and Oracle have offices in the Western District.
This has also made Albright’s courtroom a cozy home for so-called patent trolls. Also known as nonpracticing entities, or NPEs, these litigants generate revenue by acquiring and licensing patents, or by suing companies to try to force them to license the patents. NPEs brought about 79% of patent cases Albright heard last year, compared with a national average of 61%, according to RPX Corp., which helps its clients avoid patent-infringement suits.
The most prolific plaintiff in Albright’s court, an LLC called WSOU Investments that holds a portfolio of at least 4,600 US patents, filed more than 160 cases in Waco last year against Huawei, Google, Microsoft, Canon, Cisco, and others. The company declined Insider’s requests for an interview.
Not all tech firms have big Austin offices, and some patent trolls even use retail stores or employees’ LinkedIn pages as a basis for jurisdiction in Waco. TracFone, a Miami prepaid-cellphone company, complained that the sole connection to Waco cited against it was a closed cellphone retailer in San Antonio, a three-hour drive away, that had a sign for one of TracFone’s wireless brands. The circuit court overruled Albright and sent that case to Miami in April.
Big Tech defendants often fight tooth and nail to have their cases transferred to their home courts, or at least moved out of Waco. Adobe, Apple, and Intel have all filed emergency appeals in cases before Albright, accusing the judge of ignoring their requests to transfer the case elsewhere. Albright indicated in a March 23 order that he’ll do a better job dealing with such requests.
Tandy, Albright’s former clerk, said he’s often caught off-guard by assertions that Albright is courting patent trolls. “There’s a reason people want to get in front of him,” he said. “It’s not because he was troll-friendly. It’s because he was a fantastic litigator.”
Indeed, Waco juries might not be as inventor-friendly as plaintiffs hoped. Defendants have won three of the four patent-infringement cases that have gone to trial in Waco so far.
Patent lawyers told Insider they like Albright because his cases move fast and he’s predictable. He gives lawyers a heads-up on his thinking, and his cases typically follow a set timeline.
But there is evidence that Albright’s procedures give plaintiffs — including patent trolls — “more negotiating power early in the case,” according to Geneva Clark, an intellectual property researcher with the legal-analytics company Lex Machina.
Albright said he disagrees “with the whole premise” that speed advantages plaintiffs. “If you’re Company X, and you’re in front of a judge who’s never going to get to trial, you’re going to end up spending a whole ton more attorney’s fees than you are in my court,” he told Insider.
Under Albright, Waco is one of just two courthouses (out of seven) in the Western District to hold trials during the COVID-19 pandemic. Face coverings, hand sanitizer and transparent barriers were on hand during Albright’s first patent trial, which pit a shell company called MV3 Partners against Roku. For the second, which led to a Fortress Investment Group-backed patent holder called VLSI Technologies getting a 10-figure verdict against Intel, participants had to get daily COVID-19 tests.
Intel tried to have the trial delayed, but Albright rejected its request. He even moved the case from Austin, where the courts were closed, to his own courthouse, so it could go forward. No one got sick, but at a November patent trial in Marshall, 15 people tested positive for COVID-19 after an outbreak sickened jurors, courthouse staff, and lawyers.
“There’s no place I get to go look that says, ‘Here’s what you take into consideration on whether or not to transfer a case during a pandemic,'” Albright said of his decision to hold the trials in-person.
Can anything stop Albright?
When the Eastern District of Texas was the country’s dominant patent venue, even nonlawyers could tell something funny was going on. Samsung sponsored an ice-skating rink outside the Marshall, Texas, courthouse, generating goodwill in the local jury pool, and Congress passed a law called the America Invents Act to help defendants neutralize patents that were wielded against them.
Yet the Eastern District remained popular, and policymakers in Washington debated more ways to curb the court’s power.
Already, some lawyers are asking the same questions about Waco. The law professors Paul Gugliuzza and Jonas Anderson argued in a recent paper that Albright’s actions to create a patent-focused court have encouraged patent trolls and “undermine public confidence in the impartiality of the judiciary.”
In their paper, Gugliuzza and Anderson said there are possible reforms to limit any one federal judge’s ability to choose cases, but Anderson told Insider that Big Tech companies don’t seem willing to push for legislative changes just yet. Many are still in wait-and-see mode, trying to figure out whether they can live with Albright before they start exerting political pressure.
Even without a policy change, Albright’s court could become a victim of its own success. Some lawyers say it already has; even with the judge cramming arguments into his calendar, pivotal hearings are being scheduled further out than they used to be, said Erick Robinson, a veteran patent litigator at Porter Hedges.
“Waco is not perfect,” Robinson said. But for plaintiffs, “your next-best alternative is probably California or Delaware, both of which are generally much slower, and in the case of California, has never seen a patent they didn’t want to invalidate.”
There’s also the question of resources. Albright has a magistrate judge, as many as 20 summer interns and four clerks and said he sometimes gets help from other judges’ clerks. But one key adviser, Yi, a former clerk with whom Albright has said he has a “mind meld,” isn’t a court employee. He’s a lawyer in private practice whose fees are paid by the litigants. In the first three months of 2021, he made more than $450,000 from helping the judge, according to public fee disclosures.
Asked about Yi’s fees, and whether parties who opted not to use Yi would have their cases move more slowly, Albright took offense and said no one had ever complained to him about Yi. He also noted Yi’s qualifications, which include a Ph.D. and several years of experience as a law-firm associate, unlike most federal clerks, who are recent law-school graduates.
But the judge made no bones about the fact that each new case requires attention that he can’t devote to other cases, and he has to work on the same broad range of nonpatent cases that other judges do. He said there’s no secret sauce to what he does. His patent procedures are posted online, and any other judge could copy them.
He knows he brings something unique to the table though. Asked a jargony question about standard essential patents and FRAND licensing, which refers to “fair, reasonable and nondiscriminatory” terms, he said, “I just understood every part of your question. And I’d pose to you, if you picked a federal judge at random and asked them that question, how many of them would understand any part of the question that you just asked?
“My guess is it’s a relatively small percentage.”
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