by Dennis Crouch
The Federal Circuit recently denied a petition for mandamus seeking to overturn a district court order transferring a patent case from the Western District of Texas to the Northern District of California. In re Haptic, Inc., No. 2024-121 (Fed. Cir. June 25, 2024). This case was filed in Austin and assigned to Judge Robert Pittman with Haptic alleging that Apple’s “Back Tap” feature on iPhones infringes U.S. Patent No. 9,996,738 relating to gesture detection systems. Haptic is headquartered in Austin at the home of its longtime CEO and listed inventor Jake Boshernitzan. The company was part of Techstars Austin Accelerator as it developed its product known as Knocki that allows users to tap on ordinary surfaces to control various actions on phones and other devices. Knock on wood. The patent and Knocki product are designed to expand touch interfaces beyond traditional touchscreens, potentially opening up new modes of interaction with smart devices and appliances. The ‘738 patent particularly issue covers systems and methods for detecting tapping or knocking gestures on surfaces to control electronic devices.
Apple also has a major presence in Austin, with about 10,000 Austin employees and a billion-dollar second headquarters campus in the city. Nevertheless, Judge Pitman granted Apple’s motion to transfer the case to the Northern District of California, finding that the convenience factors strongly favored transfer.
The statute at issue 28 U.S.C. 1404(a) lists one reason for transfer: “for the convenience of parties and witnesses” and also indicates that transfer should be done only “in the interest of justice.” This simple wording has been expanded by the courts to a set of public and private interest factors to guide any transfer decision:
The public and private interest factors for 1404(a) transfer motions, as outlined in the district court’s order and followed by many courts, are derived from the Fifth Circuit’s decision in In re Volkswagen AG, 371 F.3d 201 (5th Cir. 2004).
Private Interest Factors:
1. The relative ease of access to sources of proof
2. The availability of compulsory process to secure the attendance of witnesses
3. The cost of attendance for willing witnesses
4. All other practical problems that make trial of a case easy, expeditious and inexpensive
Public Interest Factors:
1. The administrative difficulties flowing from court congestion
2. The local interest in having localized interests decided at home
3. The familiarity of the forum with the law that will govern the case
4. The avoidance of unnecessary problems of conflict of laws or in the application of foreign law
These factors are used by courts to determine whether transferring a case would be clearly more convenient for the parties and witnesses and in the interest of justice. Courts typically analyze each factor individually and then weigh them collectively to determine whether transfer is appropriate. See, In re Volkswagen AG, 371 F.3d 201 (5th Cir. 2004). On the private interest side, the court found that the relative ease of access to sources of proof strongly favored transfer. While Haptic argued its documents were in Texas, the court cited Federal Circuit precedent establishing that “the bulk of the relevant evidence usually comes from the accused infringer” in patent cases. In re Nintendo Co., 589 F.3d 1194(Fed. Cir. 2009). Apple provided declarations showing that the engineers who developed Back Tap, as well as relevant documents and source code, were primarily located in California.
The court found the availability of compulsory process for unwilling witnesses to be neutral, as both parties identified several potential third-party witnesses in their preferred venues. However, the cost of attendance for willing witnesses heavily favored transfer. The court emphasized that patent cases typically focus on the alleged infringer’s activities. Apple showed that the engineers and employees knowledgeable about Back Tap’s development were concentrated in Northern California, with none in Texas. While Haptic identified some witnesses in Texas, including its CEO, the court found this outweighed by the location of Apple’s relevant personnel.
On the public interest factors, the court found administrative difficulties from court congestion to be neutral or slightly favoring transfer. More significantly, it determined the local interest factor weighed heavily toward transfer — concluding that key events – Apple’s development of the accused Back Tap feature – occurred primarily in California, not Texas. The district court’s analysis aligns closely with recent Federal Circuit guidance emphasizing the importance of considering where the accused technology was designed and developed. See, e.g., In re Apple Inc., 979 F.3d 1332, 1345 (Fed. Cir. 2020). Notably, the court gave little weight to a 2016 meeting between Haptic and Apple representatives in Houston, which Haptic argued supported its willful infringement claim. The court found this meeting occurred outside the Western District and was outweighed by the subsequent California-based development work on Back Tap. In addition, it appears that the invention itself took place in Houston.
In denying mandamus, the Federal Circuit found no clear abuse of discretion in the district court’s analysis. The appeals court emphasized the deferential standard of review, noting that mandamus is a “drastic and extraordinary remedy” reserved for clear abuses producing “patently erroneous” results.
In my mind, this decision to transfer has so many problems. The patentee is developing a product with deep ties to south Texas, including a long relationship with UT Austin and has no apparent ties to the Northern District of California. Just like with ITC jurisdiction, the question of venue should also consider the development of the invention by the patentee as well as products covered by the invention.
Jurisdiction as a Factor: Although venue and jurisdiction are different beasts, they are closely related and I am surprised that the venue question largely ignores personal jurisdiction — particularly jurisdiction over the patentee plaintiff. As you know, a court must have personal jurisdiction over the parties — power over the parties — in order to move forward with a lawsuit, and the Supreme Court has generally tied this to the ideas of “fair play and substantial justice.” We normally don’t spend much time on personal jurisdiction over the plaintiff because the plaintiff typically consents to jurisdiction by filing the lawsuit within the district. But, transferring of venue is a different situation because the plaintiff has not consented to a lawsuit in California. A factor in the private analysis should consider whether the new court would have jurisdiction over the patentee absent consent. Does the patentee have broad enough ties with the proposed forum to be subject to general jurisdiction; or perhaps have there been contacts sufficient related to the case sufficient to create specific jurisdiction. The absence of such jurisdiction should weigh against transfer and should also require a consideration of whether the transfer comports with the constitutional due process requirements.
The case has been moving forward in San Francisco. Most recently with Judge Jacqueline Scott Corley denying Apple’s motion to dismiss. This ruling allows Haptic’s claims of direct and contributory infringement of U.S. Patent No. 9,996,738 to proceed. Apple had argued for a narrow claim construction of the claimed “impact on said mounting surface,” but Judge Corley concluded that such claim construction disputes are inappropriate for resolution at the motion to dismiss stage. The court also found Haptic’s contributory infringement claim sufficiently pled, citing allegations of Apple’s prior knowledge of Haptic’s technology and the ‘738 patent before launching Back Tap.
“We normally don’t spend much time on personal jurisdiction over the plaintiff because the plaintiff typically consents to jurisdiction by filing the lawsuit within the district. But, transferring of venue is a different situation because the plaintiff has not consented to a lawsuit in California. A factor in the private analysis should consider whether the new court would have jurisdiction over the patentee absent consent.”
Hmm. This case isn’t your grandma in Austin filing a case against Apple based on her uncommercialized knitting needle patent. Haptic is a substantial sized company based in Texas but which surely does business with customers in California and around the world and probably brags about that in their marketing materials.
Companies who file a patent lawsuit in Federal Court against a defendant based in California should not be surprised when a transfer motion is brought by the defendant and in most cases they should not be surprised when it’s granted.
But pleas gaslight some more about how you are not anti-patent…
I lelzed.
We normally don’t spend much time on personal jurisdiction over the plaintiff because the plaintiff typically consents to jurisdiction by filing the lawsuit within the district. But, transferring of venue is a different situation because the plaintiff has not consented to a lawsuit in California.
This is an interesting point. Did the patentee make this argument?
No – that one is mine.
If the plaintiff doesn’t consent to jurisdiction in California, he can dismiss his lawsuit. But in the absence of a specific law governing personal jurisdiction over plaintiffs (weird), the question should at most be whether exercising jurisdiction offends the Constitution.
Right, but that is an interesting question. Is it unconstitutional to transfer a plaintiff’s suit to a district where the courts could not properly exercise personal jurisdiction over the plaintiff except by consent?
I am kind of surprised to think that this question has not been settled already, which is why I asked if Lode Runner knows a precedent on point. If there is not a precedent, however, the plaintiff here totally should have raised the issue. I think that Prof. Crouch makes an interesting point.
“f” – Drum’s “adjusting for inflation” is itself dubious with any such timeframes graphed (inflation itself is dubious, as the “basket of goods” is a rigged game).
I doubt the patentee would have made that argument, because it’s irrelevant from a legal standpoint.
The reason we do not normally talk about personal jurisdiction in reference to a plaintiff is not because “the plaintiff typically consents to jurisdiction by filing the lawsuit within the district,” as Dennis writes. The real reason is that personal jurisdiction in federal courts is actually about the defendant, i.e., the party against whom a claim has been asserted, and against whom any judgment on that claim will be entered. Personal jurisdiction thus depends on the defendant’s connections with the forum, not the plaintiff’s. As a result, personal jurisdiction does not prevent a court from transferring a case to another district where the plaintiff has zero connections.
The real reason is that personal jurisdiction in federal courts is actually about the defendant…
Is there precedent on this point? A holding, that is, not just dictum?
“o”n — the inability of the OMB-TDS to move on.
I sense a great void coming upon many of the Sprint Left come this fall.
Yes, one can assume that Judge Robert Pittman of the Austin division of the Western District of Texas is not nearly as interested in accumulating and trying patent cases as his fellow-district judge Albright of the Waco division.
Re the Fed. Cir. mandamus refusal citing In re Nintendo Co., 589 F.3d 1194 (Fed. Cir. 2009) for “the bulk of the relevant evidence usually comes from the accused infringer” in patent cases [not that this should be so controlling], note that the patent venue statute itself also favors the accused infringer.
BTW, this 2009 Fed. Cir. assumption that “the bulk of the relevant evidence usually comes from the accused infringer” in patent cases is worth reconsidering? Its not relevant to the large number of patent cases ended by Alice 101 exceptions to patentability or IPRs or non-infringement summary judgments after Markman’s, etc. How or why infringement occured is legally irrelevant [even if relevant to influening juries], except for obtaining willfull infringement enhanced damages. The plaintiff’s expert witnesses will normally be the key claim interpretation and infringement witnesses. Nor are infringer’s product-designer witnesses normally relevant to claim validity issues? Perhaps they are if the product accused of infringement is very complex or hard to back-engineer in operation re the claims in suit?
The overwhelming majority of the evidence relates to issues of infringement and it does come from the accused infringer. The exceptions that I can quickly think of are: (1) competitor cases, (2) the ITC, and (3) inequitable conduct.
This is absolutely true, and the three exceptions you identify don’t apply in the vast majority of patent disputes. In some NPE district court cases that I have seen, the only documents the plaintiff produced in discovery were a copy of the patent and a copy of the file history that they downloaded from PAIR.
Re: “In some NPE district court cases that I have seen, the only documents the plaintiff produced in discovery were a copy of the patent and a copy of the file history that they downloaded from PAIR.”
Thanks, I had failed to consider that huge document discovery disparity in the now many PAE suits against large companies these days. Where the PAE can assert lack of any knowledge about the purchased patent, with no responsibility for producing any documents about how the invention occured, or its background, or any prior art known to the inventors, or any product marketing information. Whereas very broad and costly document discovery and deposition demands can often be made against a large defendant company.
The one exception may now be that in some district courts the defendant is allowed some discovery as to who is funding or who is getting a percentage of the PAE’s recovery.
“Usually.” There may be some circumstances where that isn’t the case, but as a general rule, it is generally true. In particular, where and how the plaintiff developed his product doesn’t go to any element of a patent-infringement claim.
>Apple provided declarations showing that the…relevant documents and source code, were primarily located in California.
I’m a bit bemused that Apple apparently stores its source code in CA file cabinets. Archival copies, maybe??
And, for that matter, that they plan to comply with their discovery obligations by photocopying those CA documents and then delivering in boxes (OK, I could actually see Apple doing that… to run up the plaintiff’s legal fees).
Didn’t processing during COVID show that location is not what it used to be?
“In my mind, this decision to transfer has so many problems.”
Big +1.
Including this: “the cost of attendance for willing witnesses heavily favored transfer.”
Because one of the World’s most valuable, most profitable companies in history can’t afford such costs.
This was a shameful, get-this-patent-case-off-my-docket, ends-justifies-the-means transfer decision.
Regardless of Apple’s ability to pay, cheaper is still cheaper, and it is one of the factors to be considered. While there may be many good reasons to question this decision, Apple’s ability to pay for a higher cost of attendance is not one of them.
I simply don’t believe that it will be cheaper for Apple to litigate in San Francisco than it would be to litigate in Austin — except that the SF court is more likely to dismiss the case prior to trial.
I was referring specifically to the cost of attendance for willing witnesses. As for Apple’s overall litigation expense (assuming trial), I agree that it probably won’t make much difference.
> I simply don’t believe that it will be cheaper for Apple to litigate
> in San Francisco than it would be to litigate in Austin — except
> that the SF court is more likely to dismiss the case prior to trial.
With respect, Dennis, I find it strange that you’ve gone absolutely apoplectic in response to a transfer ruling that almost any other district judge would have entered under these facts. I think your views have been skewed by the approaches adopted by the small number of judges who are the subject of most of the Federal Circuit mandamus challenges. Their perspectives, whether you agree or disagree with them, indisputably differ from the way most other federal judges evaluate transfer motions. I’ve read hundreds of 1404 transfer orders from judges throughout the country, and the result here was not unusual.
Here, you’ve got a case where a defendant’s witnesses are heavily concentrated in California with none in Texas. If you’ve ever worked on a trial you’d know that out-of-town witnesses don’t just fly up of their testimony and leave. Because a ton of unpredictable things happen during trials, you usually cannot predict precisely when your witnesses will have to take the stand so they often have to block out a big time window and remain on standby in the district, away from their homes, their families and work colleagues, sometimes for the entire length of the trial. You balance that inconvenience against the plaintiff, who in this case had (at most) one relevant witness in the district, the inventor/CEO whose testimony is not relevant to infringement and validity, and it’s not all that surprising to see how the judge came out the way he did.
Not clear why you think it’s such a big deal that the defendant had a lot of employees in the district; why does that matter if none of them are going to testify at trial. The convenience factors focus on the location of the witnesses who will actually testify. The existence of 10,000 or even 10 million irrelevant Austin employees who will never testify, obviously, does not diminish the inconvenience of the California employees who will.
Again, after COVID, is “location of witness” really that big a deal?
Re: “the SF court is more likely to dismiss the case prior to trial.”
Interesting observation. Why is that true? Is is strict enforcement of the N.D. CA D.C. local rules requiring patent suit plaintiffs to produce specific claim infringement demonstrations earlier in the litigation, or other reasons?
“or other reasons?”
’cause the N.D. judges are biased in favor of their area Big Tech infringer – neighbors.
“Apple’s ability to pay for a higher cost of attendance is not one of them.”
And yet; with such a high degree of subjectivity (and bias) present in such transfer rulings . . .
>Apple’s ability to pay for a higher cost of attendance is not one of them.
I respectfully disagree, as reducing Apple’s legal costs necessarily increases the plaintiff’s legal costs. And, as between the two, one party’s greater ability to pay should be a major factor if we are really deciding the question “in the interest of justice.”
Maybe even the deciding factor; it’s a bit absurd to exclude “practical access to justice” from your test for “in the interest of justice.”
+1. Great point OC.
And as everyone knows: “Apple respects the intellectual property rights of others.”
As we see in case, after case, after case, after . . .
Completely OT, but I gotta lulz at SCOTUS slapping down the 5th Circuit for the SIXTH time this term.
Of course I’m sure Night Wiper still thinks J. Ho is a great legal mind.
Lulz
Missouri v. Murtha is also interesting as a forum shopping case. Missouri federal courts are part of the 10th circuit, but in order to ensure that the 5th circuit heard any appeal, Missouri AG’s office collaborated with folks in Louisiana to file the case there.
link to lawyersgunsmoneyblog.com
Case should have died at summary judgement in USDC. But when you have Drumpf appointed judges willing to ignore the law it is allowed to go all the way to SCOTUS, where not even a supermajority of the worst conservative hacks ever assembled could stomach it.
Meh, that spin is a bit unrealistic (the Executive saying they don’t like something and nothing more – who’s kidding whom?)
And this has nothing to do with “R” versus “D,” as were the roles reversed, the Big Brother effect would still have been as reprehensible.
“Meh, that spin is a bit unrealistic…”
You are such a cl0wn.
As are you if you want to clench tight your eyes to reality.
Or is it only when “D’s” are in control of the Executive branch that you think that malfeasance is like totally absent (and 180 that when “R’s” are in power)?
My position exists for both, while yours is “conveniently” one-sided.
Who then be the clown?
The three not (yet anyway) totally insane “justices” of the carefully crafted conservative supermajority of SCOTUS found the plaintiff’s case to be a steaming pile of dog poo. But go ahead and think it’s me whose eyes are clenched tight to reality.
UFB
That’s simply because the facts were not well established enough as I understand it. The reasoning though in the case where they expound on “nothing prevents the government from asking a platform to do so” is in fact somewhat dangerous. Yes, they may politely request, obviously. But having a high power gov official call up your little outlet “requestinglol” that you take down xyz is literally the method used in many a repressive govs. Obvious implication is that they are taking note of your org and will be scrutinizing you overall (inclusive of various regulatings that may take place, or legislatings that may take place which affect your org etc. if not outright imprisonments). You leftoids should know this like Taibbi (and his bro Dore also) rightly mention a thousand times.
In any event, yeah this particular case may not have been well founded, but overall this sort of thing does need to be scrutinized. Regardless of political affiliation.
Precisely my point, 6 – but happy pants (now, with “D” in control) cannot see past that and to the possible reversal of roles (when he would no doubt be screaming something else).
“That’s simply because the facts were not well established enough as I understand it.”
You obviously don’t understand it.
Why would forum shopping be needed/wanted here?
Talk about deliberately obtuse.
Lulz
Please Pardon Potential rePeat….
Your comment is awaiting moderation.
June 27, 2024 at 10:43 am
No deliberate 0btuseness at all – looking for the expl1c1t statement of why one would be preferred over another from the Crouch perspective.
(This is called dialogue – I recognize that you may not be used to it)
“…in order to ensure that the 5th circuit heard any appeal, Missouri AG’s office collaborated with folks in Louisiana to file the case there.”
Seems pretty explicit to me.
Does not explain the “why” which is the point of my question.
Deliberately 0btuse indeed.
Missouri federal courts are part of the 10th circuit…
Um, Missouri federal courts are part of the eighth circuit. The CA8 is headquartered in St. Louis, Missouri.