In re TracFone Wireless, Inc. (Fed. Cir. 2021)
In its second go-round in the case, the Federal Circuit has ordered District Court Judge Albright to grant TracFone’s motion to transfer its case to the S.D.Fla. on convenience grounds under 28 U.S.C. § 1404(a). “We conclude that the district court clearly abused its discretion in denying transfer under § 1404(a).” Generally, Section 1404(a) provides substantial discretion to the district court to determine whether or not to transfer a case to a different venue. The statutory guidelines focus on “the convenience of parties and witnesses [and] the interest of justice”
In its opinion, the appellate panel walked through the parties/witnesses:
- Patentee Precis is a Delaware company with “no disclosed place of business.”
- The key inventor likely to testify (Karvenon) lives in Mankato.
- The attorney involved in patent prosecution likely to testify lives in Arizona.
- Defendant TracFone is also a Delaware company, its principal place of business is in Miami Florida. TracFone has identified for Florida-Based witnesses likely to testify.
Effectively, there is no reason for this case to be in Waco, Texas. Still, the district court explained that the convenience here, in his discretion, did not rise to being “clearly more convenient” so as to demand transfer. On appeal, the Federal Circuit disagreed — finding the district court’s conclusion “clearly flawed.”
The court did not reach the issue of improper venue that was also raised.
Read it here: TracFone Decision April 2021
“Go West, young, man; go West!” they all said.
Western District of Texas, that is!
Well, I’m surprised. I thought that if Tracfone was going to win, they’d win on improper venue rather than the 1404 transfer.
Is it normal for the reversal of a single factor in a multi-factor test to demonstrate a clear abuse of discretion?
Is it normal…
Definitely not. Reversal for any reason is definitely not normal for an issue reviewed on abuse-of-discretion standard.
We see so many of these mandamus requests out of the WD Tex of late, however, that this might be on the way to becoming the new normal for a while, until a new equilibrium sets in.
I am not surprised it was transferred but I also expected them to resolve this based on improper venue under 1400(b), before reaching a 1404(a) convenience analysis. Proper venue is an express legal requirement, akin to personal jurisdiction, so it’s not entirely proper to simply assume compliance with the mandatory legal requirements to resolve the question on wishy-washy discretionary factors.
But by resolving the case on 1404(a), the case may be a signal that the Federal Circuit is now willing to entertain more mandamus petitions for the more blatant instances of W.D. Texas forum shopping.
LR, I can buy that.
It doesn’t matter in practice because if venue is improper the statutory cure is to transfer venue under Section 1406(a). So either way the same result is reached. That’s why parties usually file a MTD and a motion to transfer simultaneously.
The key element of Albright’s analysis appears to be that he is in WDTX, and it would be inconvenient for him to get himself put on the court in Florida just to hear this case.
That’s more than a bit of stretch.
What is at play here was that travel was going to be required for one party no matter which venue, and that fact was weighed.
The other party though clearly was more convenient in their home court.
So what the CAFC did here was basically dismiss the home court advantage as having any negating effect on the calculus of BOTH parties and the travel to any particular forum.
This is a HUGE win – on a de factobasis for Efficient Infringers to set up camp in those areas that just don’t like patents.
This is NOT merely a “Texas LOVES patents” thing. Texas loves the idea of actually treating patent rights appropriately (in a strong manner).
While on the surface, there is certain plausibility in the ‘cold calculations’ of the CAFC decision, it is itself wooden (when it claims the Texas Court was being wooden), and does not take the reality of larger picture into view.
That being said, that degree of plausibility does appear to be enough to satisfy the Means to the End reached. Those who do not want to cater to Efficient Infringers will simply have to write better justifications as to denying transfer )I and others have already commented that THIS Judge in THIS case did NOT do a great job of his writing of his decision).
Anon, bro, you’ve lost the forest for the trees. The Judge has gone off the rails and needs to be put back in line with precedent. 28 USC 1404 exists for a reason and this Judge simply doesn’t like to let ANY case go to a more convenient and logical venue.
I would push back that I see BOTH the forest and the trees.
I DO indicate here that in this case, the Means are proper for the Ends.
But that is NOT the end of the discussion — for the reasons (at least) that are given.
Certainly, one CAN view this as a “Judge has gone off the rails,” and just as certainly, the CAFC (and the Supreme Court) can more than equally be viewed as having “gone off the rails.”
I will note that from ‘on high,’ one of the beacons of the Supreme Court’s enmity towards bright line rules is that ‘discretion’ is and must be ‘maintained.’ They just do not like (nor want) clear rules. One of the (necessary) ramifications of that beacon is that one will have lower level judges with ‘discretion’ that differs from any “desired narrative.”
So one district judge can have many hundreds of cases with virtually no connection to the forum and deny every single motion to transfer? It is absurd on its face. At least some fraction of those motions should be granted. It’s the law. Denying every single motion isn’t an act of “discretion,” but rather an attempt to disregard the law.
Granted I am suggesting a change in law (or perhaps an interpretation that is simply more reasonable), but if a business is choosing to capture the benefits of doing business IN a State, why in the world would one expect that choice not to carry the liability (flip side of the same coin) OF doing business in that State?
Further, patents (and patent protection and thus liability against that protection) is a Federal matter, unlimited to any single State, and thus should carry to any place at which a business has chosen to capture the benefits side of the coin.
Don’t like Texas? Simple: don’t avail yourself of the benefits of doing business IN Texas.
Problem solved.
You’re conflating personal jurisdiction with venue. Moreover even if venue is technically proper in a forum 28 USC 1404 is about convenience-moving the dispute to a convenient forum. Under your theory Apple could get sued in Alaska just because people have iPhones there. That would not be an improvement to law.
I am not conflating anything – I am laying out the plain reasoning.
“That would not be an improvement to law”
Says you – I say the opposite.
On my side, we have the alignment of both sides of the coin – choice of obtaining benefit married with accompanying liability.
What do you have on your side? Unrestrained benefit with NO sense of liability? How is that ‘better?’
Changing venue is NOT a liability issue. It’s just that the forum chosen to determine liability is inconvenient (and often illogical$
You are missing the point – the benefit/liability is but ONE COIN.
“the CAFC (and the Supreme Court) can more than equally be viewed as having “gone off the rails.”
Yup; and especially so when it come to patent eligibility.
Indeed, they can no longer . . . even see the rails.
No Zamboni for You WD Texas. CAFC ain’t havin’ it again.
Note that the other, and statutory, venue dispute here [over whether the defendant even had a place of business open in WDTX when the complaint was filed] never got decided and is now moot.
Yeah, revisiting the current state of silliness of someone being able to avail themselves of the benefits of doing business in a state without any of the liability of doing business in that state will have to wait another day.
No Waco ice rink to rival EDTX’s? Why not, if estimates of maybe 2000 collected patent suits still there before one judge, including many major PAEs, are correct?
Mandamus-a-rama on the horizon…
…or not.
Do you really think that the prospect of ‘losing all that business’ won’t spur the judge to actually write a better analysis?
Further WDTX “mandamus-a-rama” is unlikely, first because of the two existing venue-training-wheels, secondly because mandamus is even rarer for just forcing all parties to full trials by denying all S.J.s [even with early Markman’s] and all IPR stays. Also by getting IPR discretionary institution denials based on unrealistic early trial dates. [This inherently leads to most patent case disposals being by defendant cash payments just to avoid discovery and trial expenses, so the asserted patents will never get tested or appealed on validity, infringement or anything else.]
Waco is several times bigger than Marshall. This might call for something on the scale of a small amusement park rather than a mere ice rink.
I can imagine it now: Appleland the Most Skeptical Place on Earth.
I would say Albright may be on thin ice with CAFC though.
That’s what you get for building and ice rink in Texas.
What? You think Texas gets that February weather all year round?
Comments are closed.