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Transfer Motions Must Take Top Priority

The US Court of Appeals for the Federal Circuit granted an accused infringer’s mandamus petition to transfer a case from the Western District of Texas to the Northern District of California, concluding that the district court “barreled ahead” on the merits before addressing the transfer motion and clearly abused its discretion in denying transfer. In re. Apple, Inc., Case No. 20-135 (Fed. Cir. Nov. 9, 2020) (Prost, C.J.) (Moore, J., dissenting). In re. Apple, Inc

In September 2019, Uniloc sued Apple in the Western District of Texas alleging that several Apple products infringed one of Uniloc’s patents. In November 2019, Apple moved to transfer the case to the Northern District of California on the basis that it would be clearly more convenient to litigate the case in that district. In January 2020, Apple moved to stay all activity in the case unrelated to its transfer motion pending a decision on that motion. The district court denied the stay motion without explanation. In May 2020, the district court held a hearing on Apple’s transfer motion during which the court stated that it would deny the motion and issue a written order as soon as possible. After the hearing, but before issuing a written order, the court held a Markman hearing, issued its claim construction order, held a discovery hearing and issued a corresponding discovery order. In response to these advances in the case, in June 2020 Apple filed a petition for writ of mandamus requesting that the Federal Circuit transfer the case to the Northern District of California. One week after Apple filed its petition, the district court issued its written order denying transfer.

The Federal Circuit granted Apple’s mandamus petition and directed the district court to transfer the case to the Northern District of California. The Federal Circuit explained that the US Court of Appeals for the Fifth Circuit assesses transfer requests using private and public interest factors. The private interest factors are: “(1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive.” The public interest factors are: “(1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws [or in] the application of foreign law.” The parties agreed that the third and fourth public interest factors were neutral, but disputed whether the remaining factors weighed for or against transfer.

The Federal Circuit found numerous errors in the district court’s analysis. As to the first private factor (access to sources of proof), the Court found that the district court erred in determining that the location of witnesses weighed in favor of transfer. The Court explained that the “access to proof” factor relates to ease of access to non-witness evidence, such as documents and other physical evidence. The Court also found that the district court erred by overemphasizing the sources of proof nearer to Texas and failing to meaningfully consider the sources of proof in California. The Court explained that while it was noting these errors, it did not need to reweigh the evidence since the district court found that this factor was neutral and other factors convincingly demonstrated that the district court abused its discretion.

Turning to the third private factor (cost of attendance of willing witnesses), the Federal Circuit found that the district court misapplied the law to the facts by too rigidly applying the 100-mile rule. Specifically, while the inventors and patent prosecutors live in New York and would have to travel less distance to reach Texas than California, in either instance these individuals would have to leave home for an extended period of time and incur travel and lodging costs. In view of this misapplication of law, and in view of the district court’s finding that Apple and Uniloc had more witnesses in California, the Court found that this factor weighed slightly in favor of transfer.

As to the fourth factor (practical problems that make trial easy, expeditious and inexpensive), the Federal Circuit found two errors in the district court’s analysis. First, the district court relied on activities occurring after Apple filed its motion and after the district court’s May 2020 hearing on the motion. The Court explained that a “district court’s decision to give undue priority to the merits of a case over a party’s transfer motion should not be counted against that party in the venue transfer analysis.” Second, the Court found that the district court misapplied the law to the facts of the case in concluding that judicial economy weighed against transfer because California had more pending cases than Texas. Instead, the Court noted that because trial times in California are typically shorter than in Texas, and because there were pending cases in California with overlapping issues, this factor weighed slightly in favor of transfer.

The Federal Circuit next addressed the public interest factors, starting with the administrative difficulties flowing from the district court’s congestion and concluding that the district court relied too heavily on the scheduled trial date. The Court explained that “a district court cannot merely set an aggressive trial date and subsequently conclude, on that basis alone, that other forums that historically do not resolve cases at such an aggressive pace are more congested for venue transfer purposes.” The Court thus found this factor neutral.

Turning to the second public interest factor (localized interest), the Federal Circuit disagreed with the district court’s conclusion that this factor was neutral since Apple had a significant presence in California and Texas. The Court explained that the relevant inquiry is whether there are significant connections between the transferee forum and the events that gave rise to a suit. The Court found that this factor weighed in favor of transfer because Uniloc has a presence in California and not Texas; the accused products were designed, developed and tested in California; and the lawsuit called into question the work and reputation of several individuals residing in California.

Judge Moore dissented, cautioning that the Federal Circuit’s mandamus jurisdiction is not an invitation to exercise de novo dominion over a district court’s individual fact finding and balancing determination, or to criticize a district court’s management of its docket. Judge Moore, who is a former district court judge, found that the district court thoroughly analyzed each of the convenience factors. While acknowledging that Apple had identified several witnesses in California, Judge Moore ultimately found that transfer was not warranted because “Uniloc chose a venue in the district in which Apple maintains a large campus employing thousands of people, where one of the accused products is manufactured, where third-party information and potential witnesses are located, and which is convenient for potential witnesses and sources of proof and which would not impose a significant hardship on Apple.” Judge Moore believed that that rather than conducting a limited review, the majority panel usurped the district court’s role in the transfer process, disregarded the standard of review and substituted its judgment for that of the district court.

© 2020 McDermott Will & EmeryNational Law Review, Volume X, Number 324
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About this Author

Amol Parikh, McDermott Will Emery, Chicago, patent lawyer, Intellectual Property Litigation Attorney
Associate

Amol Parikh is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm's Chicago office.  He focuses his practice on IP litigation, counseling and prosecution. Amol has been recognized as a 2011 Illinois Rising Star in Intellectual Property by Law & Politics.  Rising Stars are lawyers under the age of 40 that have been in practice for 10 years or less.  No more than 2.5 percent of the lawyers in Illinois are named as Rising Stars.

Amol has...

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