by Dennis Crouch
The 5th Circuit Court of Appeals recently decided an important convenient venue case. Granting TikTok’s mandamus petition to have its trade secret case transferred from W.D.Tex to N.D.Cal. The decision does not really break ground in the venue/mandamus debate, but does solidify the Federal Circuit’s parallel approach in patent cases out of the same district. In re TikTok Incorporated, — F.4th —-, 2023 WL 7147263 (5th Cir. 2023). Decision.
A Chinese company – Beijing Meishe Network Tech.Co. (“Meishe”) – sued TikTok for infringing its copyrights and misappropriating traded secrets associated with AV editing software. Although both companies are Chinese in origin, the plaintiffs sued in Judge Albright’s Waco Texas courtroom. Judge Albright is seen as tech-plaintiff friendly and so likely was the key driver for the filing location. Still, TikTok has numerous employees within the district, including 300 in the Waco area. Further, most of the actions associated with the underlying claims took place in China — and so the plaintiffs argued that there was no particular US court that would be clearly better. The reality though is that TikTok has most of its US employees in California.
Judge Albright denied TikTok’s motion to transfer venue and TikTok then petitioned the 5th Circuit for a writ of mandamus who has now granted the motion and ordered the case transferred to N.D. Cal.
28 U.S.C. § 1404(a) is the federal statutory provision that governs requests to transfer venue in civil cases. It applies particularly in situations where venue in the original court is “proper,” but still inconvenient or may otherwise frustrate justice. It provides that a district court may transfer a civil action to another federal district court if the court determines the transfer is warranted based on the “convenience of the parties and witnesses” and “the interests of justice.”
Under § 1404(a), district court generally has broad discretion to grant or deny a transfer motion. But, the party requesting transfer must at least show that convenience and justice factors weigh in favor of litigation proceeding in the proposed transferee district rather than the district where the action was initially filed. Although a district court has discretion, the Fifth Circuit has held that § 1404(a) motions should be granted if the movant demonstrates that the transferee venue is “clearly more convenient.” In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008). This process requires weighing factors like the ease of access to sources of proof, availability of witnesses, and the connection between the venue and the events underlying the dispute. Prior Fifth Circuit decisions have emphasized that the analysis focuses on convenience, not on “any particular circumstance in isolation.” In re Radmax, Ltd., 720 F.3d 285 (5th Cir. 2013). Mandamus is designed as a rare mechanism similar to interlocutory appeal, and only permitted based upon “clear and indisputable” abuse of discretion. In TikTok, the appellate panel explained:
Mandamus is an extraordinary remedy that should be granted only in the clearest and most compelling cases. To obtain mandamus relief, TikTok must show (1) there are no other adequate means to attain the desired relief; (2) the right to issuance of the writ is clear and indisputable; and (3) the issuance of the writ is appropriate under the circumstances.
In re TikTok Inc., 2023 WL 7147263, at *3 (5th Cir. 2023) (internal citations omitted). In most situations, a district court error can only be appealed after final judgment. But, inconvenient venue (absent a greater due process violation) is generally not appealable post-trial and not a justification for a new trial. What that means is that mandamus is typically the only mechanism available to obtain reversal of an erroneous inconvenient venue decision.
The Fifth Circuit granted TikTok’s petition. It held that the district court clearly abused its discretion in analyzing multiple § 1404(a) factors. Two examples: (1) The district court erred in finding that access to sources of proof was neutral when the relevant source code and TikTok employees with access were located in California, not Texas. (2) The district court abused its discretion in weighing the cost of attendance for willing witnesses and court congestion against transfer.
The In re TikTok Decision Does Not Reflect a Change in Precedent
In my view, this new decision applies the Fifth Circuit’s established § 1404(a) jurisprudence, and also solidifies the Federal Circuit’s parallel patent cases that purport to apply Fifth Circuit law. There has been a paucity of 5th Circuit precedent on point, and so this helps back-fill that foundation.
On the one hand, the Fifth Circuit explained that mandamus should be rare. But, on the other hand, the panel still granted the mandamus and transfer. The insight then is that rare things happen — perhaps more often than we think. Here, the appellate court identified this case as an “unprecedented situation” with no connection between the plaintiff’s claims and the Western District of Texas. This, the case turns on the case’s unique lack of any connection between the forum and the dispute. As the court stated, “[o]ur holding today is restricted to the outlandish facts of this case.” The appellate panel did not mention that the plaintiffs had alleged that copyright infringement occurred in the W.D.Tex.
The Fifth Circuit’s decision in In re TikTok provides support for the Federal Circuit’s approach to venue transfer in patent cases. Like the Fifth Circuit, the Federal Circuit has shown a willingness to grant mandamus to transfer patent cases out of the Western District of Texas in situations where the convenience factors strongly favor another venue. Although the Federal Circuit applies Fifth Circuit precedent to the issue, there has been limited Fifth Circuit authority directly on point regarding venue transfer and mandamus in civil suits. The In re TikTok decision thus lends support to the Federal Circuit’s body of law.
Every alleged quotation of the Fifth Circuit’s decisions in this post is fabricated aside from the short quotation of In re Volkswagen. Even its characterisation of the quote from Volkswagen is highly questionable (and fails to mention its en banc status).
If this post was intended as a test to see whether readers would be wise or alert enough to not fall for this trick, it is a dangerous test, because any lawyer who assumed this post was telling the truth might wind up being sanctioned for trusting it. And it harms this blog’s credibility. From now on, why should I trust anything said in a post here?
I’m not saying I absolutely trust anything said in this blog’s posts: Professor Crouch and his co-bloggers are all human like everyone else and make quite a few unintentional errors in many of their posts. (Remember, this blog is a free service, not paywalled, so you get more than you pay for.) But now I MIStrust everything it says, because who’s to tell whether such tests will be repeated?
I think it was an unfortunate mistake to post this without honestly disclosing what it was, and it is a mistake that may have lasting effects.
“now I MIStrust everything it says, because who’s to tell whether such tests will be repeated?”
You can always ask one of those awesome new computers that people are talking about these days to double-check the accuracy. They work pretty well now but just wait 6 months and they’ll work ten times or maybe even a hundred times better! It’s a whole New Age, you can trust me on that.
^^^ and yet again, please abstain from any innovation that you would deny innovation protection to.
Please Pardon Potential rePeat
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November 10, 2023 at 8:46 am
^^^ and yet again, please abstain from any innovation that you would deny innovation protection to.
In comment #4 below, I speculated that maybe this was just a social experiment to see if readers could detect that the article was drafted (in substantial part) by an AI. Or perhaps Crouch delegated the first draft of this article to one of his students, who took the ChatGPT shortcut that has become too common on university campuses these days.
But I have to agree with your general point, as any site that posts articles with fabricated quotes and incorrect facts, will invariably damage its own reputation, which is made worse here by the fact that the article has stayed online for days with no correction or acknowledgement. I have never taken any article posted here as gospel, but always assumed that non-opinion statements had at least some factual basis in the underlying documents. I will not make that assumption going forward and will approach articles here with more caution, as I suspect others will as well.
ALL THOSE PATENT PROSECUTORS THAT KEEP WHINING THAT THE FEDERAL CIRCUIT IS NOT “APPLYING FIFTH CIRCUIT LAW” CAN NOW PLEASE TAKE A 30 DAY SELF-IMPOSED REFLECTION PERIOD BY NOT POSTING
Lol – all caps….?
OR…. You can view the actual facts of this case, and note that one person’s implicit may not actually reach.
On the one hand, the Fifth Circuit explained that mandamus should be rare. But, on the other hand, the panel still granted the mandamus and transfer. The insight then is that rare things happen — perhaps more often than we think.
It is important to remember that “rare” is a relative term. Weekends are “rare” relative to weekdays, but that does not mean that Saturday is a freak occurrence that surprises everyone.
Even Judge Albright gets affirmed on mandamus more often than he is reversed. It is true that he is presently the judge most frequently reversed on mandamus (perhaps ever, in the history of common law jurisdictions), but that means he gets reversed on mandamus 0.00001% of the time*, while other judges get reversed on mandamus 0.000000000001% of the time. One way or the other, mandamus reversals are still—rightly, and as they should be—a rare occurrence, even under the controlling CA5 precedent.
* I am making up these percentages for illustration purposes. I do not pretend actually to have calculated the real numbers.
Satur”d”ay – talk about your Drum OMB-TDS and getting the story 180 from the facts while missing the COVID context….
You really have to try HARD to screw up that bad.
I suspect this article was a social experiment to see if readers could spot when an article was written by AI. Aside from several errors in the article’s substantive analysis, and in its recitation of some of the basic facts, the actual quotes attributed to the Fifth Circuit opinion all appear to have been made up (including the prominently featured block quote and the “outlandish facts” and “unprecedented situation” quotes).
Wow. That’s annoying. The quotes are completely made up.
I wonder if this is the only post like this.
I just searched the St.Louis Examiner archives and found this sad news from August 2023: “Professor Dennis Crouch died Thursday from injuries sustained in a river rafting accident. Memorial services will be held sometime in September.”
Maybe someone should let Jason know …?
your ‘humor,’ while not new, is just not funny.
I think the key takeaway is found on pages 19-20 of the Slip Opinion:
“This case concerns Chinese intellectual property that was allegedly infringed and misappropriated by employees located in China. The only individuals in the United States who have any documented connection to this dispute are located outside the district.”
Chinese IP, Chinese actors, and conduct taken in China. This doesn’t have the same look and feel as situations involving US companies, performing infringing actions in WDTex, and having huge campuses in Austin TX.
Yeah, the headline here is that the CA5 is implicitly endorsing the CAFC’s approach to mandamus out of WDTX, but I am not sure that is the whole story. It is certainly possible to read the opinion here as a favorable to the CAFC’s take, but it is also possible to read the opinion here is an idiosyncratic result of a very quirky set of facts. On balance, I share your suspicion that the outcome might have been different with a U.S. litigant in the mix, although it is a close call.
it is also possible to read the opinion here is an idiosyncratic result of a very quirky set of facts.
The facts certainly do matter, but this again raises a point about the standard of review for these situations, which is abuse of discretion.
Abuse of discretion is not quibbling over the facts — it is about a judge simply do something plainly incorrect (i.e., “a clear error of judgment”) with great deference being given to the trial judge. Consistent with your characterization, I think this “very quirky set of facts” could support the Appellate Court’s finding that nothing ties the case to the Western District of Texas.
As an aside, I think that ByteDance’s fairly-recent initiative, entitled Project Texas, which involves spending $1B to bring all of TikTok’s technology into the US, had it been considered, could have changed the Court’s view of the facts. However, I cannot determine whether those facts were before the Court.
I think the headline is less that they are endorsing the Federal Circuit’s approach in *every* case so much as they are endorsing what appears to have been a strong factual record, and rejecting Judge Albright’s yadda yadda-ing over that. There are two key facts that the record showed, which TikTok’s counsel clearly did a good job of proving: 1) no employees in the Western District of Texas have any access to source code, which is a critical source of evidence in this specific case; and 2) there were absolutely no employees in the Western District of Texas who worked on the technical implementation of these products. I think the Fifth Circuit is trying to really emphasize that when you are considering transfer, there are case-specific facts that need to be taken into account.
Three other things that stuck out: 1) the Fifth Circuit basically agreed with the Federal Circuit’s approach that mandamus is appropriate because 1404 issues can’t be effectively reviewed on direct appeal, 2) the Fifth Circuit did endorse the Federal Circuit discounting post-transfer motion events, and 3) the Fifth Circuit emphasized that the balance of convenience is not between the states but between the specific judicial districts.
Incidentally, it is interesting to ask why this order was from the CA5 instead of the CAFC. This was an IP dispute about software, but only copyright and trade secrets were asserted. Is it really plausible that there were no relevant patents covering the products at issue here? I cannot name a relevant patent, but it just seems implausible to me to think that Meishe does not own any.
More likely, they made a strategic decision not to assert their patents. Why not? Could it be that they: (1) wanted to be in Judge Albright’s court; (2) rightly expected that TikTok would seek transfer to ND Cal; and (3) wanted to ensure that the CAFC would not have jurisdiction to hear the ensuing mandamus petition?
More likely, they made a strategic decision not to assert their patents.
Maybe they had Chinese patents but not US patents. The Court characterized it as Chinese IP.
w”h”y – you will own nothing and be happy about it.
(An edict, not a self-reflecting phrase)
TikTok, ya don’t stop in WDTX
“ The insight then is that rare things happen — perhaps more often than we think.”
Oh, please. Human beings with agency (plaintiffs, defendants and judges) are on all sides of this. The judges are looking at the facts and applying a law which has no limit (top or bottom) on the number of times that it can be applied over a given time period.
Looking at the phenomena in another context, most people will say that punishing public officials and their attorneys for conspiring to subvert an election “should be rare”. But the law against such behaviors was written for a reason and the reason was presumably not just to find excuses to avoid applying it when the bad behavior is rampant or “popular” within a group of desperate, disgusting humans.
like this:
link to youtube.com
By the by, Malcolm:
link to linkedin.com
That’s 100,000,000+ weekly users.
“My name is Biwee. I am impwessed by shiny things and big wownd numbers but most of all I wike big stwong men who tell me what I want to hear.”
U m, sure – let’s go with that.
Perfectly descriptive
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