Guest post by Paul Gugliuzza and Jonas Anderson. Paul Gugliuzza is Professor of Law at Temple University Beasley School of Law. Jonas Anderson is Associate Dean for Scholarship and Professor of Law at American University Washington College of Law.
We’ve discussed in this space a few times the remarkable lengths Judge Alan Albright has gone to to attract patent cases to his Waco, Texas courtroom. Judge Albright’s efforts have succeeded in large part because his court, the U.S. District Court for the Western District of Texas, assigns cases to judges in a way that allows plaintiffs to know, with absolute certainty, that their case will be assigned to Judge Albright and not one of the fifteen other judges in the district.
Judge Albright’s been back in the news the past couple weeks because he’s granted two motions to transfer cases out of the Western District of Texas—something he’s rarely done in his two-plus years on the bench.
But, at the same time, Judge Albright has been drawing a roadmap for patentees who want to make sure their cases aren’t transferred away from Waco in the future.
The relevant cases all have the same basic facts: the patentee, a North Carolina LLC called Ikorongo Technology, created a Texas LLC and assigned the Texas LLC the right to several patents only in certain counties in Texas, including counties in the Western District. The LLCs jointly filed infringement suits in Waco against Samsung, LG, Lyft, Uber, and Bumble. Each defendant filed a motion to transfer to the Northern District of California.
In a series of orders—including one issued earlier this week—Judge Albright denied the motions. According to Judge Albright, Ikorongo’s assignment to the Texas LLC made transfer out of Texas impossible. Under the transfer of venue statute, the proposed transferee district must be one in which the case “might have been brought.” Because the defendants infringed the Texas LLC’s patent rights only in Texas, Judge Albright reasoned, the case couldn’t have been “brought” anywhere else.
The patentee’s tactic here is a brazen and transparent attempt to manipulate venue. If Judge Albright’s decisions are allowed to stand, patentees will be able to guarantee their cases are never transferred away from the Western District of Texas by simply creating a shell company that has an exclusive license to the patent only in the Western District of Texas. When the companies file suit as co-plaintiffs in Judge Albright’s Waco courtroom, escape will be impossible.
Fortunately, the Federal Circuit has a chance to step in and condemn these machinations in a pair of pending mandamus proceedings challenging orders by Judge Albright denying motions to transfer in cases filed by Ikorongo. [LG Mandamus Petition; Samsung Mandamus Petition].
We’re optimistic the Federal Circuit will grant those petitions. Both the Supreme Court and the Federal Circuit have repeatedly and forcefully condemned the sort of jurisdictional and venue gamesmanship Ikorongo is plainly engaged in. Moreover, there’s a good argument based on the patent venue statute that the question is not whether the plaintiff’s patent rights have been infringed in the proposed transferee district, as Judge Albright ruled, but whether the defendant has committed acts of infringement in the district.
Regardless of what the Federal Circuit rules in these cases, patentees will continue to develop clever strategies to keep their lawsuits in the Western District of Texas. As we discuss in a forthcoming law review article, the stakes surrounding venue choice are just too high and the advantages Judge Albright offers to patentees are just too great. Congress, the Judicial Conference of the United States, or the district courts themselves need to step in and stop the case assignment practices that enable plaintiffs to shop for specific judges, that incentivize judges to favor the parties who choose the forum, and that have repeatedly led to a single judge—whether in the Eastern District of Texas or, now, the Western District of Texas—hearing a quarter or more of all patent cases nationwide.