I just Googled “Improper Venue Texas”

This post serves as a complement to Prof. Gugliuzza’s new remarks on a parallel case of In re Apple. – DC

by Dennis Crouch

In re Google (Fed. Cir. September 18, 2020) (Google III)

Google’s business pervades the lives of most Americans, including most citizens of the E.D. of Texas.  Google has millions of customers in the district; serves terabytes of data to, from, and within the district; and keeps detailed files on the activities of its citizens. Google also has lots of Texas lawyers.  Google is doing everything it can to move this case out of E.D.Texas.  The reality is though that Google doesn’t mind being in Texas, it just doesn’t want Texas style justice — where patent cases are on a direct path to a jury trial.

28 U.S.C. 1400(b) has a specific test for proper venue. An infringement lawsuit can only be filed in a district where either:

  1. The defendant resides [is incorporated]; or
  2. The defend has (i) committed acts of infringement and (ii) has a regular and established place of business.
Id. Under this test, Google argues that it should not be sued for patent infringement in E.D. Texas.

This week, the Federal Circuit released “In re Google” — the third in a series of venue mandamus decision with the same caption.  The new decision denies Google’s petition for mandamus and transfer in a case involving PMC.

PMC’s initial complaint alleged that venue was proper in E.D.Tex because of several “Google Global Cache” servers located within the district.  In a separate mandamus action, the Federal Circuit found that those servers were insufficient to show a “regular and established place of business.”  In re Google LLC, 949 F.3d 1338 (Fed. Cir. Feb. 13, 2020) (Google II).  In particular, those servers were maintained and operated by various ISPs on Google’s behalf, but the Federal Circuit found that the connection was not enough for an agency-implication relationship.

At that point, PMC altered its argument venue argument to focus on another Google vender – CDTI.  CDTI warehouses, ships, and repairs Google hardware (phones & speakers) from its E.D. Tex. facility in the north-Dallas suburb of Flower Mound.

In PMC v. Google, Judge Gilstrap took the Restatement (Third) of Agency language used by the Federal Circuit in Google II and decided that CTDI was acting as Google’s Agent — and therefore that CTDI’s regular-and-established-place-of-business counted as Google’s regular-and-established-place-of-business.  Q.E.D. Proper venue.

In its petition for mandamus, the Federal Circuit indicated that Google’s argument is “viable … based on the law of agency and this court’s precedent.”  In addition, the court chastised Chief Judge Gilstrap for not moving quickly to resolve Google’s motion.

To get a hearing on mandamus, the court generally requires both a good legal argument and also a clear demonstration that an immediate appeal is necessary. The petitioner must show why it cannot simply wait until final judgment and then appeal.

A party seeking a writ bears the heavy burden of demonstrating to the court that it has no adequate alternative means to obtain the desired relief.

Slip. Op.

In this case, the Federal Circuit found that mandamus standard had not been met.  A trial date in the case has been set for October 2020; and mandamus here would require postponing the trial and upsetting the process.  Rather than hearing the petition, the court suggests that Google seek “meaningful review of the district court’s venue ruling after final judgment in the case.” At that point, if venue was improper then we get a transfer and new trial.

Note – Check out the 1981 priority date on PMC’s patent.

35 thoughts on “I just Googled “Improper Venue Texas”

  1. 7

    Rather than hearing the petition, the court suggests that Google seek “meaningful review of the district court’s venue ruling after final judgment in the case.”

    Rather than waiting for final judgment, Google should petition for reconsideration en banc. Other panels have recently granted mandamus in similar circumstances. Google probably just drew an atypical panel here, who decided to distinguish the prior precedents a little more finely than would most other panels. I expect that the en banc court would consider this case to be materially indistinguishable from the others that it has recently mandamused out of TX.

  2. 5

    OT, but Greg here is an article about Ginsburg’s patent dissents and judgments.

    1. 5.1

      Thanks, Night Writer. As noted in the article, the only two dissents that Justice Ginsburg wrote in patent cases were both instances in which the Court held against the patentee, but Justice G would have held for the patentee. It is hard to square this observation with the idea that her being replaced will be good for patentees. It is possible, but it is just as likely that she will be replaced with someone even less sympathetic to patentees.

    2. 5.2

      The Notorious RBG was an exceptional Human Being, even if you think she wrecked the patent system.

      And if you think she wrecked the patent system she had a lot of help, including some of the paid bloggers in this forum. Not to mention the USPTO itself.

      At this point it does not appear that there are any Senate Republicans who have even a shred of decency left in them (not even Romney) so Trumpo will get another one of his lackeys put on the Supreme Court.

      With that he can do anything.

      When he sends his storm troopers to all of the counties to seize the ballots and count them they will report that Trumpo won with 95% of the vote. No, make that 99% for Trumpo’s ego.

      There will be lawsuits, and when they get to Trumpo’s Supreme Court they will decide that everything was done properly and the results stand.

      There will be demonstrations like this country has never seen before.

      Trumpo will order his storm troopers to fire live ammo at the demonstrators.

      Then we will find out if the members of the military will be faithful to their oath to preserve, protect, and defend the Constitution of the United States.

      1. 5.2.1

        At this point it does not appear that there are any Senate Republicans who have even a shred of decency left in them (not even Romney) so Trumpo will get another one of his lackeys put on the Supreme Court.

        NOIP, I suggest that you look into the actual facts of the situation and note that the (false) view of ‘lack of decency’ is exactly that: false.

        The actual facts and LONG history actually suggest that what is going on is EXACTLY what is normal to go on.

        Your personal feelings are getting in the way of objective reasoning.

        (and this is from someone who did NOT vote for Trump)

      2. 5.2.2

        [I]t does not appear that there are any Senate Republicans who have even a shred of decency left in them (not even Romney)…

        I am a Democrat, so I feel a bit out of place defending Sen. Romney, but the above seems unfair. The wrongfulness of senate Republicans lies not with their willingness to confirm Justice Ginsburg’s replacement, but rather with their unwillingness even to hold hearings for Judge Garland. The wrongfulness of this unwillingness is compounded by the butter-would-not-melt-in-their-mouths (in)sincerity with which they predicated this unwillingness on to supposed principle that nominations should not be considered in an election year.

        But Mitt Romney was not elected to the senate until 2018, so he can hardly be held responsible for the misdeeds that his colleagues committed back in 2016. Meanwhile, he never made these absurd arguments about the importance of never considering a nomination during an election year. As far as I can see, Sen. Romney has behaved as honorably as is possible in the world of national politics. It is unfair to tar him for the bad behavior of genuine scoundrels like Sens. Cruz or Graham or McConnell.

  3. 4

    Speaking of google. Denis maybe you can post this story and ask the ‘community’ to share their stories. link to iam-media.com

    1. 4.1

      Any Trademark folk out there cringing in HOW Prof. Crouch used the term “google” (as a verb)….?

        1. 4.1.1.1

          (sigh) – see Sir Thomas More.

            1. 4.1.1.1.1.1

              He refused to throw out the law in order to get to the Devil.

              It is a critical concept for attorneys.

              1. 4.1.1.1.1.1.1

                I agree, if I was an attorney in a case involving Google, I would need to advocate for my client based on the law.

                But as an uninvolved member of the public who has witnessed Google’s rampant copying and advocacy for positions that hurt the patent system in general, I don’t think I have a duty to care what happens to them.

                1. Understood – and appreciate that you may understand that this is a legal blog, and most views here SHOULD hew to the legal as opposed to the mere ‘feelings’ type.

  4. 3

    It is difficult to ascertain what the Federal Circuit was trying to accomplish by punting the improper venue issue for post-judgment appeal, while telegraphing to the parties that the district court likely erred in denying the transfer motion.

    This doesn’t afford justice to anyone. For Google, they now have to prepare for and conduct a through a trial in a less convenient forum–not great for them but not a huge deal considering their resources. But for the plaintiff, they will now be proceeding to trial under the dark cloud that even if they win, there’s a decent chance the Federal Circuit will wipe out the judgment and transfer the case to start over in another district. For both parties, all of the resources spent preparing the case and going to trial in E.D. Texas will all have been for naught if, as the Federal Circuit telegraphed in this decision, venue will likely be found improper. This potentially enormous waste of resources is the very reason mandamus is the proper vehicle to resolve venue questions before trial.

    1. 3.1

      How often is a judgement wiped out though?

      1. 3.1.1

        Not often, because people most of the time don’t bother to challenge venue when they appeal an adverse final judgment. This is because appellants have limited pages for their appeal briefs, so they have to be selective on what issues they raise on appeal. Venue typically doesn’t make the cut.

        But this is a somewhat unusual situation; Google has basically already previewed its venue argument and got a preliminary indication that it might have merit. So I would imagine that Google will (if it it loses at trial and appeals) reserve a few pages of its appeal briefs to re-raising the venue argument.

    2. 3.2

      Why would the judgment and the record be wiped out? Although I agree it’s strange that ‘venue’ is ONLY? for post-judgment appeal. I thought venue – was of the nature of subject matter jurisdiction in contrast to forum non conveniens – and therefore was always subject to immediate challenge.

      1. 3.2.1

        iwasthere:

        A lot of confusion in your post. In federal court, very, very, very few decisions are subject to immediate appellate challenge (other than through mandamus). A grant or denial of a preliminary injunction, for example, is immediately appealable. But venue decisions are not. The only options to obtain appellate review of venue decisions are mandamus (for immediate review) or direct appeal (only after final judgment). Google sought mandamus here, and the Federal Circuit punted and basically said, “come back after final judgment.”

        On our other question, the judgment could be wiped out because, if venue is improper under 28 U.S.C. 1400(b), there was no statutory authority to proceed in that district. The outcome is basically the same as if there was no personal jurisdiction in the venue. This issue can be challenged on direct appeal after entry of judgment.

        But that outcome might be different if venue was proper but challenged as merely being inconvenient under 28 U.S.C. 1404(a). In the case of inconvenient venue, appellate courts generally apply a “harmless error” analysis and won’t overturn a judgment unless the challenger can show that the error in denying venue transfer under 1404(a) prejudiced the trial. This generally requires that the challenger show that they would have won the case if it was transferred to the more convenient venue (and of course there’s no way for the challenger to show that).

        1. 3.2.1.1

          Thanks Lode Runner.

  5. 2

    OT, but “maintenance fee collections are down almost $20M for June-August. Patent revenue for the year is off 4.1%. RCE filings are down over 10%.”

    I am sure Lemley can spin it in some way as being good.

    The scary part is that if the Chinese pull out of the PTO, the bottom is pretty far down.

    1. 2.1

      Interestingly, the prices for services (starting in next week’s new fiscal year) are most all set to increase.

      Guess who the inverse use/cost relationship benefits most (hint: those who would prefer that patents be the Sport of Kings).

      You tell me whether this is by ‘accident’ or not…

      1. 2.1.1

        I know. Reality is that the PTO should have a 20 percent pay cut across the board.

    2. 2.2

      Also, Gene’s blog said: “..yesterday, USPTO Director Andrei Iancu said that, despite sharp declines in filings and renewals, COVID-19 seems to have spurred innovation in some areas. “Small and micro entity patent filings are at a historic high, with more than 112,000 filed during the first 11 months of fiscal year 2020,” …”
      [But of course the latter generate far less PTO revenue because of their large fee breaks, and is only roughly one fifth of total new filings and an even smaller share of maintenance fees.]

      1. 2.2.1

        From what I read, more than 50% of PTO revenue is generated from issue and maintenance fees.

    3. 2.3

      … scary part is that if the Chinese pull out of the PTO, the bottom is pretty far down

      You have made this (excellent) point before, to which, no one seems to be able to meaning fully mitigate.

      I would but add one additional aspect in that not just China, but other “participants” (the type that Greg DeLassus would bend over backwards to placate) such as large transnational firms, who may not have the US Sovereign’s best interests in mind, should have their relative influence MADE LESS imposing, instead of the current ‘inverse’ effect I noted above.

    4. 2.4

      Keep in mind that the pandemic-related maintenance fee extension for small entities remains in effect for small entities until September 30th. Accordingly, I would be cautious trying to read too much into maintenance fee collections until the expiration of that extension period.

  6. 1

    Not about the merits of this Google III mandamus denial, but rather about this additional remark at the end: “Moreover, Google can obtain meaningful review of the district court’s venue ruling after final judgment in the case, In re HTC Corp., 889 F.3d 1349, 1353 (Fed. Cir. 2018).”
    ? Neither said case explains how review at that point can be meaningful. How likely is an appeal from a final judgement going to throw out that decision because of an inconvenient forum transfer refusal decision? So what meaningful consequence can there be of finding that transfer decision refusal erroneous at that point in time? The witness and attorney travel costs and other burdens have already occured. Have sanctions for those sunk costs ever been awarded? Even if the plaintiffs sued in Samoa?

    1. 1.1

      Hi Paul – you point is a good one when it comes to inconvenient-forum. If you try to argue that after-the-fact, the court will say its just a harmless error — and certainly more inconvenient to have to try the case twice.

      This particular mandamus, however, is focused in improper-forum. If the forum is improper then there really is no discretion to move forward and the defendant will have a right to a new trial, convenient or not.

      1. 1.1.1

        You have to understand the limited nature of mandamus. The lead Supreme Court case involved a forum selection clause — Italy was chosen for a cruise ship ticket — that was enforceable. The Court held that even the improper denial of a motion to transfer was reviewable on appeal: if the clause was enforceable then a new trial would be had in Italy. The barrier to mandamus is to maintain the final judgment rule. Think about it: if showing reversible error is enough to obtain mandamus relief, then that means all of the cases you read where there is reversal on appeal should have been appealable by mandamus, such as claim construction, personal jurisdiction, subject matter jurisdiction, standing… everything.

        1. 1.1.1.1

          Think about it: if showing reversible error is enough to obtain mandamus relief, then that means all of the cases you read where there is reversal on appeal should have been appealable by mandamus, such as claim construction, personal jurisdiction, subject matter jurisdiction, standing… everything.

          This argument is an instance of the slippery slope fallacy. Surely it is possible to lessen the standard for mandamus relief on venue questions specifically, without it necessarily following that the mandamus standard drops in all of those other circumstances that you list

          1. 1.1.1.1.1

            Is it really a ‘slippery slope?’

            I don’t think so.

            A slippery slope fallacy features an item with ‘creep,’ Prof. Hricik’s item is not one of such ‘creep,’ but is instead a binary condition, if this, then that, and he notes that the “this” is NOT constrained to the present subject.

            I wonder what logical fallacy it is to accuse a position (incorrectly) if being a fallacy?

          2. 1.1.1.1.2

            I agree with Greg.

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