May 2, 2019
Apple is set to close two retail stores, severing its business operations in eastern Texas. The closure is thought to be a strategic move to avoid the federal court in the Eastern District of Texas, which has become the venue of choice for patent assertion entities targeting technology companies.
In 2017, the United States Supreme Court ruled that a patent holder alleging infringement can only initiate lawsuits where the company is incorporated or where they have a “regular and established place of business”. By closing the two locations in Eastern Texas, Apple is seemingly hoping to fend off patent infringement suits brought under the jurisdiction of the Eastern District.
Earlier this year, following a jury trial in the Eastern District, Apple was ordered to pay $440 million in damages to a patent holder named VirnetX over infringements related to the FaceTime app. The VirnetX dispute was one of many which Apple has faced before the courts of the Eastern District in recent years.
Apple is planning to open a new store in the Northern suburbs of Dallas. Though the new store will be in close proximity to the two Apple stores set to close, the new store will fall within the jurisdiction of the Northern rather than the Eastern District.
Authors: Amanda Bertucci and Ti-Anna Wang