In re Acer: Transfer Out of the Eastern District of Texas

By Jason Rantanen

In re Acer America Corporation (Fed. Cir. 2010)
Panel: Gajarsa, Schall (Author), and Moore

In 2008, MedioStream, a company headquartered in the Northern District of California, brought a patent infringement suit in the Eastern District of Texas against twelve hardware and software companies, five of which are also headquartered in the Northern District of California.  The defendants moved to transfer venue to the Northern District of California pursuant to 28 U.S.C. 1404(a), which authorizes transfer "[f]or the convenience of parties and witnesses, in the interest of justice."  The district court denied the motion, primarily because one of the defendants, Dell, Inc., is headquarted in Round Rock, Texas, relatively close to (albeit outside) the Eastern District of Texas. The defendants petitioned the Federal Circuit for a writ of mandamus. 

On appeal, the Federal Circuit agreed with the Petitioners, concluding in a precedential opinion that the district court abused its discretion in denying the request to transfer venue.  Particularly important in the panel's analysis was the fact that a substantial number of party witnesses reside in or near the Northern District of California, and requiring them to travel to the Eastern District of Texas would result in substantial expenses for airfare, meals, lodging, and the loss of productivity from time spent away from work, as well as the personal costs imposed on the witnesses.  While it was possible that more than one Dell employee might testify, that number was likely to be insignificant in contrast with the substantial number of party witnesses that would be required to travel to Texas.  Similarly weighing in favor of transfer to California was the venue's ability to compel testmony through subspoena power, the presence of a significant portion of the evidence in the Northern District of Caliornia (and none in the Eastern District of Texas), and the local interest of the Northern District flowing from the residence of many of the parties in that district.

Note: Last month, the court granted a temporary stay of the district court proceedings.

13 thoughts on “In re Acer: Transfer Out of the Eastern District of Texas

  1. Nice blog!!!!!!!!!!Really a great knowledge about different thing about interim.I refer my friend to this site for more information.They also impressed by this site.Attorney

  2. justice delayed is justice denied

    ranks right up there with

    If it don’t fit, you must acquit

    Pssst, Ronnie – don’t look now but the rocket docket’s heyday has passed.

  3. It looks to me like everyone commenting on this post is missing the big picture.

    Inventors go to TX because they need swift justice. We all know that justice delayed is justice denied and that big companies thrive on delay.

    All that the venue issue has done is create a strong incentive for inventors to actually locate in TX.

    I predict that this area will become the next Silicon Valley. So as Silicon Valley becomes a has been under the feet of large companies whose business model is based on serial infringement Texas will thrive.

    I wonder how long it will take other communities to create the same kind of favorable start up climate as Easter TX?

    Guess who the joke is on?

    Ronald J. Riley,

    President – http://www.PIAUSA.org – RJR at PIAUSA.org

    Other Affiliations:
    Executive Director – http://www.InventorEd.org – RJR at InvEd.org
    Senior Fellow – http://www.patentPolicy.org
    President – Alliance for American Innovation
    Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
    Washington, DC
    Direct (202) 318-1595 – 9 am to 9 pm EST.

  4. quite a few no longer happily enjoying thriving lucrative new businesses

    fixed, now thanks to your meddling.

  5. Re: “Just what is there in E.D. TX?”
    I’m sure there are lots of nice friendly small town people, with quite a few now happily enjoying thriving lucrative new businesses due to E.D. TX becoming a favorate place to bring patent infringement lawsuits against companies from all over the rest of the United States.

  6. There are not many… companies having a significant infringing business activity… in E.D. TX either

    Just what is there in E.D. TX besides Post Office boxes and offices empty sans a single desk and phone, eh Paulie?

  7. Yes, I meant plaintiff’s, thank you.
    [There are not many patent suit defendant companies having a significant infringing business activity, documents or witnesses in E.D. TX either]

  8. Yes, but in many of those cases the “defendant’s location in E.D.TX” is nothing more than an empty desk or mailbox set up for the litigation in one of the [patent litigation enriched] local law firms, and maybe a CD or two with some electronic documents on it. But that trick is not buying as much venue retention as before either.

    Perhaps you’re thinking of the plaintiff’s location in EDTX?

  9. Re: “in many cases at least one of the defendants IS located in EDTX, which makes venue transfer more difficult.”
    Yes, but in many of those cases the “defendant’s location in E.D.TX” is nothing more than an empty desk or mailbox set up for the litigation in one of the [patent litigation enriched] local law firms, and maybe a CD or two with some electronic documents on it. But that trick is not buying as much venue retention as before either.

  10. Paul, in many cases at least one of the defendants IS located in EDTX, which makes venue transfer more difficult. Here, none of the defendants are in EDTX, and while one (Dell) is elsewhere in Texas, all of the US-based companies whose technologies are really on the line are located in NDCA, as are most of their witnesses. This was a no-brainer for the CAFC.

  11. This decision is significant in that previously plaintiffs thought that suing several different companies at once in E.D.TX was a foolproof way to avoid a venue transfer to a more appropriate location, and keep the case pending there. [It probably still is, in most cases.]

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