Federal Circuit to WD Tex.: Denial of Transfer Motion was Clear Error, Abuse of Discretion
For the third time in as many months, the US Court of Appeals for the Federal Circuit found clear error in the US District Court for the Western District of Texas’s denial of a defendant’s motion to transfer venue. In re Juniper Networks, Inc., Case No. 21-160 (Fed. Cir. Sept. 24, 2021) (per curiam).
WSOU Investments d/b/a Brazos Licensing filed seven complaints against Juniper Networks in the Western District of Texas for infringement of seven different patents. Juniper, a Delaware corporation headquartered in Sunnyvale, California, moved the district court to transfer the case to the Northern District of California pursuant to 28 U.S.C. § 1404(a). Juniper pointed out that Brazos is a self-described patent assertion entity that does not conduct any business other than asserting patents and argued that “whatever ties Brazos has to this District appear to have been created for the purpose of its patent litigation activities in this District.” Additionally, two of Brazos’s officers, its CEO and its president, reside in California. Juniper argued that the Northern District of California was a clearly more convenient forum, noting that potential key witnesses were located in the Northern District of California. Juniper also asserted that the accused products were designed, developed, marketed and sold primarily from its Sunnyvale headquarters. While acknowledging that six of the actions could have been brought in the Northern District of California, the district court denied Juniper’s motion to transfer based on its analysis of the four private interest and four public interest factors. Juniper petitioned the Federal Circuit for writ of mandamus directing the district court to transfer the six cases.
Applying Fifth Circuit law, the Federal Circuit noted that a motion to transfer under § 1404(a) should be granted if “the movant demonstrates that the transferee venue is clearly more convenient.” The Court noted that district courts enjoy broad discretion in transfer determinations, but that it has routinely issued mandamus when a district court’s denial of a motion to transfer amounts to clear abuse of discretion.
The Federal Circuit explained that the “single most important factor” in transfer analysis is the relative convenience and cost of attendance for witnesses. Juniper identified 11 potential witnesses, all of whom were located in the Northern District of California, while Brazos only identified one Texas-based employee as a potential witness. The district court found that this only weighed slightly in favor of transfer, assigning “little weight” to both party and prior art witnesses and concluding that many of the witnesses were “unlikely to testify.” The Court disagreed, holding that the district court clearly erred in not giving sufficient weight to this factor in light of the “striking imbalance” in the parties’ 11-to-one listing of potential witnesses. The Court noted that it previously rejected both of the arguments used by the district court to discount the weight applied to Juniper’s witnesses. In August 2021, the Court held in In re Hulu, LLC that the district court’s discounting of party and prior art witnesses was “untethered from the facts” and “fundamentally at odds with the purpose of a transfer for convenience of the witnesses.” The Court also cited to its repeated holdings, rejecting the district court’s “categorical assumption” that witnesses were unlikely to testify.
The Federal Circuit also found that the district court erred in its application of the local interest factor. The district court concluded that this factor weighed against transfer because Juniper maintained a small office in Austin, despite acknowledging that the office only services a recently acquired startup that had no connection to the accused products. Again citing to multiple recent decisions on venue motions, the Court explained that the local interest factor regards the “significant connection between a particular venue and the events that gave rise to a suit.” The Court cited to its holding in In re: Apple, where it found that the district court misapplied the law and facts when it heavily weighed the party’s “untethered” contacts with the forum. The Court also rejected the weight applied to Brazos’s presence in the state by the district court, citing to its prior decisions in which it found “recent or ephemeral” presence in a forum to have little or no weight.
The Federal Circuit granted Juniper’s petition and directed the district court to transfer the cases.
Practice Note: The Federal Circuit made clear that this case was a reiteration of its “close cousins” in which it overturned Judge Alan Albright’s denials of motion to transfer. On October 4, 2021, in a non-precedential per curiam order in In re: Juniper Networks, Inc., Case 21-156, the Federal Circuit granted another of Juniper Network’s mandamus petitions, again finding a “clear abuse of discretion” based on “the same erroneous conclusions.”