In the old days, once you rounded up patent infringers, you could (in nearly all cases) file a lawsuit in the Eastern District of Texas without much fear that it would be transferred out of the District. After all, cases filed in the Eastern District of Texas were “not being consigned to the wastelands of Siberia or some remote, distant area of the Continental United States.” Jarvis Christian Coll. v. Exxon Corp., 845 F.2d 523, 528 (5th Cir. 1988).
Those days are long gone. The old regime began to fall with the Fifth Circuit’s en banc decision in 2008 in In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008).[1] The case involved an auto accident in Dallas, Texas. The plaintiffs (a grandfather injured in the accident and the mother of a young girl who died from the accident) filed a design defect lawsuit against Volkswagen, the maker of the car the grandfather and young girl were driving in, in the Marshall Division of the Eastern District of Texas.
Volkswagen “asserted that a transfer was warranted [to the Northern District of Texas, Dallas Division] as the Volkswagen Golf was purchased in Dallas County, Texas; the accident occurred on a freeway in Dallas, Texas; Dallas residents witnessed the accident; Dallas police and paramedics responded and took action; a Dallas doctor performed the autopsy; the third-party defendant lives in Dallas County, Texas; none of the plaintiffs live in the Marshall Division; no known party or non-party witness lives in the Marshall Division; no known source of proof is located in the Marshall Division; and none of the facts giving rise to this suit occurred in the Marshall Division.” Id. at 307-08.
Judge Ward, the district judge in the Eastern District handling the case, denied Volkswagen’s transfer motion and the case eventually made its way up to the Fifth Circuit en banc. The Fifth Circuit had two principal holdings.
First, the court held that mandamus was appropriate when the district court clearly abused its discretion in ruling on a transfer request. (Typically, errors committed by the district court can only be appealed only after a final judgment.)
Second, the court found that the district court “gave undue weight to the plaintiffs’ choice of venue, ignored our precedents, misapplied the law, and misapprehended the relevant facts,” thereby reaching “a patently erroneous result and clearly abus[ing] its discretion in denying the transfer.” Id. at 309. Accordingly, a writ would issue requiring the district court to transfer the case to the Northern District of Texas, Dallas Division.
Other notable aspects to the court’s decision include the following:
- The Sources of Proof Transfer Factor Remains Meaningful: “[T]his Court has recently reiterated that the sources of proof requirement is a meaningful factor in the analysis. That access to some sources of proof presents a lesser inconvenience now than it might have absent recent developments does not render this factor superfluous.” Id. at 316 (citation omitted).
- The “100 Mile” Rule Applies: “When the distance between an existing venue for trial of a matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of inconvenience to witnesses increases in direct relationship to the additional distance to be traveled. . . . [I]t is an ‘obvious conclusion’ that it is more convenient for witnesses to testify at home and that ‘[a]dditional distance means additional travel time; additional travel time increases the probability for meal and lodging expenses; and additional travel time with overnight stays increases the time which these fact witnesses must be away from their regular employment.’” Id. at 317.
- The Plaintiff’s Choice of Venue Is Not a Factor In The Transfer Analysis: “[T]he district court considered the plaintiffs’ choice of venue as an independent factor within the venue transfer analysis. A plaintiff’s choice of forum, however, is not an independent factor within the forum non conveniens or the § 1404(a) analysis.” Id. at 315 n. 10 (5th Cir. 2008) (emphasis added). This is an odd holding for two reasons. First, the Volkswagen court itself stated, at the beginning of the opinion, that “[w]e begin by observing that the only factor that favors keeping the case in Marshall, Texas, is the plaintiffs’ choice of venue.” Id. at 308 (5th Cir. 2008). Second, the court cited two Supreme Court decisions in support of its holding that the plaintiff’s choice of forum is not a factor. But neither of these decisions said this, and they both involved forum non conveniens motions, not § 1404(a). In fact, the Fifth Circuit itself had earlier stated that it “believe[s] that it is clear under Fifth Circuit precedent that the plaintiff’s choice of forum is clearly a factor to be considered” in the § 1404(a) analysis. In re Horseshoe Entm’t, 337 F.3d 429, 434 (5th Cir. 2003) (emphases added). The Volkswagen court, although it cited Horseshoe, did not reference this language from the decision.
Volkswagen was a watershed decision with respect to patent cases filed in the Eastern District of Texas, because the Federal Circuit applies the law of the regional circuit when deciding transfer motions. And the Volkswagen court knew that, although Volkswagen involved a product liability claim, its holding would apply in patent cases filed within the Fifth Circuit as well. In fact, a group of Eastern District of Texas patent litigators filed an amicus brief in support of the plaintiffs.
The Federal Circuit took In re Volkswagen and ran with it, granting mandamus after mandamus after mandamus in patent infringement cases arising from the Eastern District of Texas:
- In re TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir. 2008) (granting mandamus petition where “the district court gave too much weight to [the plaintiff’s] choice of venue”; “[t]he district court’s order here completely disregarded the 100-mile rule”; citizens of the Eastern District of Texas did not have a “substantial interest” in the case simply because several of the accused vehicles had been sold in the Eastern District).[2]
- In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009) (granting mandamus where the Eastern District of Texas had “no connection to any of the witnesses or evidence relevant to the cause of action”; “[i]t was not necessary for the district court to evaluate the significance of the identified witnesses’ testimony”; European witnesses’ convenience should be discounted since they would have to travel a great deal no matter where the trial was held; “the district court improperly used its central location as a consideration in the absence of witnesses within the plaintiff’s choice of venue”; “[i]n patent infringement cases, the bulk of the relevant evidence usually comes from the accused infringer [and] [c]onsequently, the place where the defendant’s documents are kept weighs in favor of transfer to that location”; “district court’s consideration of the previous case [the defendant filed in the Eastern District of Texas] was clear error”; “[t]here is no requirement under § 1404(a) that a transferee court have jurisdiction over the plaintiff or that there be sufficient minimum contacts with the plaintiff; there is only a requirement that the transferee court have jurisdiction over the defendants in the transferred complaint”; court congestion factor “appears to be the most speculative”). [3]
- In re Hoffmann-La Roche Inc., 587 F.3d 1333 (Fed. Cir. 2009) (granting mandamus petition; “the Eastern District of North Carolina’s local interest in this case remains strong because the cause of action calls into question the work and reputation of several individuals residing in or near that district and who presumably conduct business in that community”; “[a] plaintiff’s attempts to manipulate venue in anticipation of litigation or a motion to transfer” are prohibited). [4]
- In re Nintendo Co., 589 F.3d 1194 (Fed. Cir. 2009) (granting mandamus petition because “in a case featuring most witnesses and evidence closer to the transferee venue with few or no convenience factors favoring the venue chosen by the plaintiff, the trial court should grant a motion to transfer”). [5]
- In re Zimmer Holdings, Inc., 609 F.3d 1378 (Fed. Cir. 2010) (granting mandamus petition where plaintiff’s “presence in Texas appears to be recent, ephemeral, and an artifact of litigation” because “[t]his is a classic case where the plaintiff is attempting to game the system by artificially seeking to establish venue by sharing office space with another of the trial counsel’s clients”). [6]
- In re Acer Am. Corp., 626 F.3d 1252 (Fed. Cir. 2010) (granting mandamus petition where the plaintiff and five of the twelve defendants were headquartered in the Northern District of California, even where one defendant was headquartered in Texas). [7]
- In re Microsoft Corp., 630 F.3d 1361 (Fed. Cir. 2011) (granting mandamus petition where plaintiff established connections in the Eastern District of Texas in anticipation of litigation and for the likely purpose of making the Eastern District of Texas appear convenient). [8]
- In re Verizon Bus. Network Services Inc., 635 F.3d 559 (Fed. Cir. 2011) (granting mandamus petition requesting transfer to Dallas Division where many witnesses resided within 100 miles of Dallas Division and none resided within 100 miles of the Marshall Division, even where district court had previously construed 25 terms of the patent-in-suit). [9]
- In re Morgan Stanley, 417 F. App’x 947 (Fed. Cir. 2011) (granting mandamus petition where the plaintiff and 27 out of 41 defendants were located in or near the transferee venue, despite district court’s prior familiarity with some patents-in-suit; court congestion statistics given little weight where plaintiff was a non-practicing entity). [10]
- In re Biosearch Technologies, Inc., 452 F. App’x 986 (Fed. Cir. 2011) (granting mandamus petition where both plaintiffs were located in California, as was one of the moving defendants).
There were several decisions, however, where the Federal Circuit denied mandamus petitions:
- In re Apple Inc., 456 F. App’x 907 (Fed. Cir. 2012) (mandamus petition denied where, among other things, the defendant waited three and a half months after the district court denied its transfer request to petition the Federal Circuit for mandamus, and did nothing (e.g., file a mandamus petition requesting that the district court decide the motion) in the nearly fifteen months it took the district court to decide the defendant’s transfer motion).
- In re Google Inc., 412 F. App’x 295 (Fed. Cir. 2011) (denying mandamus petition where plaintiff was located in the Eastern District of Texas, as were four defendants).
- In re Vistaprint Ltd., 628 F.3d 1342 (Fed. Cir. 2010) (denying mandamus petition where district court had become “very familiar” with the patent-in-suit from a previous litigation and had before it a co-pending litigation involving the patent-in-suit). [11]
- In re VTech Communications, Inc., Misc. No. 909, 2010 WL 46332 (Fed. Cir. Jan. 6, 2010) (denying mandamus petition where the district court had completed claim construction, even though defendant claimed that this occurred due to the trial court’s delay in ruling on the transfer request; “[i]t was incumbent upon [the defendant] to actively and promptly pursue its motion to transfer venue before the district court invested considerable time and attention on discovery and completing claim construction”).
- In re Volkswagen of Am., Inc., 566 F.3d 1349 (Fed. Cir. 2009) (denying mandamus petition because the district court’s decision was based on the rational argument that judicial economy is served by having the same district court try the cases involving the same patents). [12]
- In re Telular Corp., 319 F. App’x 909 (Fed. Cir. 2009) (mandamus petition denied where defendant “waited five months after the district court’s ruling to file its petition”).
To summarize, then, it’s not impossible to keep a patent infringement case in the Eastern District of Texas, but the case must have some “real” connection to the Eastern District.
In In re Volkwagen’s wake, there appears to have been a marked drop in patent infringement cases being filed in the Eastern District of Texas, and many cases are being transferred out of the Eastern District by the district courts. At the same time, and perhaps in view of the Northern District of Texas’ participation in the patent pilot project, there has been a substantial increase in the number of patent infringement cases filed in the Northern District of Texas. There have been relatively few transfer decisions involving patent infringement cases in the Northern District of Texas post-Volkswagen:
- AT&T Intellectual Prop. I, L.P. v. Airbiquity Inc., 08-CV-1637, 2009 WL 774350 (N.D. Tex. Mar. 24, 2009) (denying transfer request where “[t]he proposed transfer would shift almost all of the logistical burdens to one party and impose significant inconvenience on many nonparty witnesses”) (Lynn, J.). [13]
- Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC, 09-CV-0488, 2009 WL 2634860 (N.D. Tex. Aug. 26, 2009) (granting transfer motion, even where plaintiff was headquartered in the Northern District of Texas) (Fitzwater, C.J.). [14]
- Mannatech, Inc. v. Country Life, LLC, 310-CV-533, 2010 WL 2944574 (N.D. Tex. July 26, 2010) (denying transfer request where plaintiff was a Texas corporation with its principal place of business in Coppell, Texas) (O’Connor, J.). [15]
[1] Volkswagen was represented by Danny Ashby, Robert Mow, Jr., and Christopher Kratovil, (then) all of K&L Gates, LLP; and Ningur Akoglu and Ian Ceresney, all of Herzfeld & Rubin. Various amici curia were represented by Earnest Wotring, of Connelly Baker Wotring, LLP; Peter Sullivan, of Hughes, Hubbard & Reed; Oscar Rodriguez, of Fulbright & Jaworski; and Samuel Baxter, Robert Goodfriend, and Rosemary Snider, all of McKool Smith, P.C. The plaintiffs were represented by Martin Siegel, of the Law Offices of Martin J. Siegel; Carl Roth, of the Roth Law Firm; Michael Smith, of Siebman, Reynolds, Burg, Phillips & Smith, LLP; Jeffrey Embry, of Hossley & Embry; and Thomas Crosley, of The Crosley Law Firm, P.C.
[2] Nicholas Coch and Vito DeBari, of Kramer Levin Naftalis & Frankel LLP, represented the petitioners. Respondents were represented by Frank Angileri, Thomas Lewry, and Brian Tobin, (then) all of Brooks Kushman P.C.
[3] Charles Verhoeven, Victoria Maroulis, Gabriel Gross, and Melissa Baily, (then) all of Quinn Emanuel Urquhart Oliver & Hedges, LLP, represented Genentech, Inc. Donald Ware, Claire Laporte, and Jeremy Younkin, all of Foley Hoag LLP, represented Biogen Idec, Inc. Paul Berghoff, and Joshua Rich, all of McDonnell Boehnen Hulbert & Berghoff LLP, represented Sanofi-Aventis Deutschland GmbH.
[4] Hoffmann-La Roche Inc. was represented by Stephen Rabinowitz and Randy Eisensmith, both of Fried, Frank, Harris, Shriver & Jacobson LLP. Novartis Vaccines and Diagnostics, Inc. was represented by Rachel Krevans, Matthew Kreeger, and Jason Crotty, all of Morrison & Foerster LLP; and Samuel Baxter, Rosemary Snider, and John Garvish, all of McKool Smith, P.C.
[5] Nintendo was represented by Alex Chachkes and Peter Bicks, both of Orrick, Herrington & Sutcliffe LLP. Motiva, LLC was represented by Christopher Banys, of The Lanier Law Firm, P.C.
[6] Zimmer Holdings, Inc. was represented by Bryan Hales, of Kirkland & Ellis LLP; and Michael Jones, of Potter Minton PC. MedIdea, LLC was represented by Joseph Vanek and Jeffrey Moran, Jr., both of Vanek Vickers & Masini, P.C.
[7] Acer America Corp. was represented by Elaine Chow and Holly Hogan, both of K&L Gates LLP. Apple Inc. was represented by Mark Scarsi, of Milbank, Tweed, Hadley & McCloy LLP. ASUS Computer International was represented by Joshua Masur, of Turner Boyd, LLP. Dell Inc. was represented by Scott Partridge and Roger Fulghum, both of Baker Botts, LLP. Microsoft Corporation was represented by George Pappas, Jason Fowler, and Ranganath Sudarshan, all of Covington & Burling LLP. Nero, Inc. was represented by Craig Tyler, of Wilson Sonsini Goodrich & Rosati, PC. Sonic Solutions was represented by Roderick Thompson and Andrew Leibnitz, both of Farella Braun & Martel LLP. Sony Corporation was represented by Lewis Popovski, Michelle Carniaux, and Zaed Billah, all of Kenyon & Kenyon LLP. MedioStream was represented by Gregory Bishop and Andy Chan, both of Goodwin Procter LLP.
[8] Microsoft Corporation was represented by David Lender, Paul Torchia, Amber Rovner, and Steven Kalogeras, (then) all of Weil, Gotshal & Manges LLP. Allvoice Developments US, LLC was represented by Stacy Obenhaus and Chris Perque, both of Gardere Wynne Sewell LLP.
[9] AT&T Corporation was represented by Bryant C. Boren, Jr., Christopher Kennerly, Kevin Cadwell, and Joshua Parker, all of Baker Botts LLP. Qwest Communications Corporation was represented by Brian Roche and Doyle Johnson, both of Reed Smith LLP. Verizon Business Network Services Inc. was represented by Geoffrey Eaton, Charles Molster, III, Peter McCabe, III, and Kurt Mathas, all of Winston & Strawn LLP. Red River Fiber Optic Corp. was represented by Douglas Cawley, David Sochia, Christopher Bovenkamp, and Steven Callahan, all of McKool Smith, P.C.
[10] Petitioners were represented by Daniel Devito and David Hansen, both of Skadden, Arps, Slate, Meagher & Flom LLP. Respondent was represented by Dirk Thomas, of McKool Smith, P.C.
[11] Vistaprint Limited and OfficeMax Incorporated were represented by Thomas Friel, Lori Ploeger, and Christopher Campbell, all of Cooley LLP. ColorQuick, L.L.C. was represented by Michael Shore, Alfonso Garcia Chan, Justin Kimble, Theresa Dawson and Daniel Olejko, (then) all of Shore Chan Bragalone DePumpo LLP.
[12] Petitioners were represented by Michael Lennon, Mark Hannemann, and Susan Smith, all of Kenyon & Kenyon LLP. Respondent was represented by David Doyle and Mark Woodmansee, both of Morrison & Foerster LLP; and Samuel Baxter, Garret Chambers, John Garvish II, and Rosemary Snider, all of McKool Smith, P.C.
[13] Plaintiffs were represented by Bryant Boren, Travis Thomas, Christopher Kennerly, and Kevin Cadwell, all of Baker Botts LLP. Defendant was represented by Charles Hosch, Lauren Becker, both of Strasburger & Price; and Alexander Baehr, Douglas Stewart, and Paul Meiklejohn, (then) all of Dorsey & Whitney LLP.
[14] Plaintiff was represented by Kevin Meek, Chad Terrell, and Ryan Bangert, all of Baker Botts LLP; and Janice Mitrius, Katherine Fink, and Marc Cooperman, all of Banner & Witcoff Ltd. Defendants were represented by Linda Stahl, of Andrews Kurth; and Ira Silfin, Kenneth George, and Nathan Weber, (then) all of Amster Rothstein & Ebenstein LLP.
[15] Plaintiff was represented by Eric Pinker and Mark Turk, both of Lynn Tillotson Pinker & Cox LLP. Defendants were represented by Josh Budwin and Laurie Fitzgerald, both of McKool Smith P.C.; Michael Smith, of Siebman, Burg, Phillips & Smith LLP; and Mei Tsang and Robert Fish, both of Fish & Associates.