By Dennis Crouch
In a pair of decisions, the Federal Circuit has denied two different petitions for writ of mandamus that sought appellate oversight in the transfer motions. Both cases involved identical split panels with Judges Reyna and Prost in the majority (denying mandamus) and Judge Newman in dissent. Over the past several years, a number of § 1404 transfer petitions have been filed at the Federal Circuit following the court’s 2008 TS Tech decision. See, In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008).
In both cases here, the majority found that the movant had failed to “meet its exacting burden to demonstrate that the district court was clearly and indisputably incorrect in concluding that the case should not have been transferred” by the District Court judge.
Judge Newman’s dissents are interesting she writes in Apple:
The plaintiff, Core Wireless Licensing, S.A.R.L., is a Luxembourg company having one employee. Core Wireless maintains a wholly-owned subsidiary, Core Wireless USA, a Texas corporation with 6 employees who live in or near Plano, Texas. Core Wireless USA’s employees manage Core Wireless’s patent portfolio, including any licensing agreements deriving therefrom. Neither Core Wireless nor Core Wireless USA makes, uses, or sells the patented subject matter in Texas or elsewhere.
The accused products are versions of Apple Incorporated’s iPhone and cellular iPad products. Apple has been headquartered in Cupertino, California since 1976. Apple’s management and primary research and development facilities are also located in Cupertino where Apple employs over 13,000 people. The record also states that the research, design, and development of the accused products took place in Cupertino and that virtually all Apple business documents and records relating to the research, design, development, marketing strategy, and product revenue for the accused products are located in or near Cupertino. Additionally, Apple has stated that its foreseeable witnesses with knowledge of the research, design, and development of the accused products reside or work in or near Cupertino.
Refusal to transfer this case should be reversed, and the writ of mandamus should issue to account for the extreme imbalance of convenience as between California and Texas.
My colleagues defend the district court’s conclusion that it was unable to evaluate the convenience of witnesses in its transfer analysis because Apple failed to name its witnesses. The district court has greatly mischaracterized Apple’s proffered evidence. Apple may not have identified specific witnesses or singled out individual documents; however, the evidence proffered makes it clear that all relevant Apple witnesses and documents are located in the Northern District of California. The evidence also shows that the suppliers of the accused components are located in California—Qualcomm Incorporated is based in San Diego and Intel Corporation is based in Santa Clara. Under a proper transfer analysis, these facts lead to only one conclusion—this case should be transferred to the Northern District of California.
This case is analogous to In re Genentech, 566 F.3d 1338 (Fed. Cir. 2009). In that case, we granted a petition for a writ of mandamus directing the court to transfer the case to the Northern District of California because the Eastern District of Texas had no meaningful connection to the litigation. Such is the case here, as nothing else ties this case to Texas.
In Genentech we observed that there were “a substantial number of witnesses with material and relevant information residing in either the transferee venue or the state of California who will be unnecessarily inconvenienced in having to travel to Texas to testify.” 566 F.3d at 1348. We further noted that two of the three parties were headquartered in the Northern District of California or had facilities in San Diego, California, realizing that this would greatly reduce any transportation of documents related to the accused products. Id. We also explained that the Northern District of California would have the authority to compel many witnesses to appear at trial if necessary. Id. The similarities between the facts of this case and Genentech are striking.
In Genentech we also explained that “[i]n patent infringement, the bulk of the relevant evidence usually comes from the accused infringer. Consequently, the place where the defendant’s documents are kept weighs in favor of transfer to that location.” Id. at 1345 (quotation marks omitted) (citation omitted). There is nothing to suggest to the contrary in this case.
Finally, I am struck by how heavily the local interest factor favors the Northern District of California. Apple is a robust company that supports the local economy of Cupertino, California, employing over 13,000 people. Core Wireless, on the other hand, is a non-United States corporation with one employee that exists solely to license its patent portfolio. To carry out this task, Core Wireless employs 6 people through a subsidiary in Plano, Texas. Apple’s impact on the local economy in the Northern District of California is clearly much greater than that of Core Wireless in the Eastern District of Texas.
Thus, although transfer is within the sound discretion of the district court, “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.” In re Nintendo Co., 589 F.3d 1194, 1198 (Fed. Cir. 2009). This is such a case. From my colleagues’ denial of the petition, I must, respectfully, dissent.
Judge Newman’s dissent in B&N is similar:
Until just prior to filing this and 19 other pending infringement suits in the same forum, the plaintiff B.E. Technology, LLC was not registered to do business in the state of Tennessee. The company is run and operated by the patent owner out of his home. The plaintiff has no other employees, and does not make, use or sell the patented subject matter in Tennessee or elsewhere.
The defendant Barnes & Noble has a large office in Palo Alto, California, where it employs over 400 people. The record states that Barnes & Noble employees that are most knowledgeable about the design, development, and operation of the accused product work in Palo Alto. The record also states that substantially all of the documents relating to the development, design, and components of the accused product are located in Barnes & Noble’s Palo Alto office, including documents relating to device and component specifications, design drawings, contracts with key commodity suppliers and software development plans.
Although Barnes & Noble’s accused product is sold nationwide, the Barnes & Noble evidence relevant to this litigation is located in Northern California. Refusal to transfer this case should be reversed, and the writ of mandamus should issue to account for the extreme imbalance of convenience as between California and Tennessee. Although the sole employee of the plaintiff may live in Tennessee, we are required to consider not only the connection of the parties with the plaintiff’s choice of forum, but also whether the disparity of convenience is so marked as to outweigh the plaintiff’s traditional right to choose the forum. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-56 (1981) (noting that “the central purpose of any forum non conveniens inquiry is to ensure that the trial is convenient,” and thus “a foreign plaintiff’s choice deserves less deference.”).
Transferring this case would not simply shift the burden of inconvenience to B.E. Like the district court, my colleagues ignore the likelihood that a substantial number of witnesses, including non-party witnesses with relevant and material information regarding the prior art, are located in the Northern District of California, while only one witness is in the Western District of Tennessee. Thus, the convenience of two venues at issue in this case is simply not comparable. Moreover, all of Barnes & Noble’s evidence relating to the accused product is located in the Northern District of California, making it easier and more convenient to try this case in the transferee venue. See In re Genentech, Inc., 566 F.3d 1338, 1345 (Fed. Cir. 2009) (“‘In patent infringement cases, the bulk of the relevant evidence usually comes from the accused infringer. Consequently, the place where the defendant’s documents are kept weighs in favor of transfer to that location.'” (citation omitted)).
Our previous transfer cases well illustrate that the plaintiff’s choice of forum here should be accorded minimal deference. In analogous circumstances to this case, this court in In re Nintendo Co., 589 F.3d 1194 (Fed. Cir. 2009) and In re Hoffmann-La Roche, 587 F.3d 1333 (Fed. Cir. 2009) ordered transfer from the plaintiff’s chosen forum based on “a stark contrast in relevance, convenience, and fairness between the two venues.” Nintendo, 589 F.3d at 1198; Hoffmann-La Roche, 587 F.3d at 1336; see also In re Genentech, 566 F.3d 1338 (Fed. Cir. 2009). More recently, in In re Microsoft Corp., 630 F.3d 1361, 1364 (Fed. Cir. 2011) and In re Zimmer Holdings, Inc., 609 F.3d 1378, 1381 (Fed. Cir. 2010) we rejected the attempts of plaintiffs that do not practice their patents to rely on mere artifacts of litigation.
The reasons for transfer of the present case are just as compelling as for this precedent. Consistency of judicial ruling is no less important in procedural and discretionary matters than in questions of substantive law. See United States v. Burr, 25 F. Cas. 30, 35 (No. 14,692d) (CC Va. 1807) (Marshall, C.J.) (“But a motion to [the court's] discretion is a motion, not to its inclination, but to its judgment; and its judgment is to be guided by sound legal principles.”); see also Van Dusen v. Barrack, 376 U.S. 612, 643 (1964) (“The matters to be weighed in assessing convenience and fairness are prevasively shaped by the contours of the applicable laws.”).
The fact that the transfer decision is within the sound discretion of the district court does not mean that applicable legal principles may be ignored. See Martin v. Franklin Capital Corp., 546 U.S. 132, 139 (2005). Consistency and objectivity are essential. Accordingly, “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.” Nintendo, 589 F.3d at 1198; see also Reese v. CNH Am. LLC, 574 F.3d 315, 320 (6th Cir. 2009) (stating that the court would reverse a district court’s balance of the transfer considerations upon a finding of a clear abuse of discretion). This is such a case. From my colleagues’ denial of the petition, I must, respectfully, dissent.