Federal Circuit Transfer Reversal Ripples Through West Texas Campaigns

  • July 9, 2021
  • Category: Patent Litigation Feature
    Market Sectors: Mobile Communications and Devices, Networking

Last week, the Federal Circuit issued its first precedential reversal of a convenience transfer denial from Western District of Texas Judge Alan D. Albright. In its June 30 In re: Samsung ruling, the appellate court held that Judge Albright erred in denying such a transfer request by LG Electronics (LGE) and Samsung—calling out plaintiffs Ikorongo Technology, LLC (“Ikorongo Tech”) and Ikorongo Texas, LLC for attempting to “manipulate venue” and keep the case in West Texas, and faulting Judge Albright’s ruling on the merits. That decision has now led the Federal Circuit to undo the denial of a transfer motion in another case, this one against Uber, from that same campaign. Meanwhile, Juniper Networks has cited the ruling in its own mandamus petition, seeking to force Judge Albright to transfer a set of cases filed against it by WSOU Investments, LLC.

 

The Federal Circuit’s Samsung and Uber Decisions

As detailed by RPX, the Federal Circuit reversed Judge Albright’s decision as to both stages of the convenience transfer inquiry in Samsung. In part, the court objected to his decision as to the initial, threshold inquiry of whether the case could have been brought in the transferee venue, the Northern District of California. That first step turned on a rather unusual corporate and ownership structure: the plaintiffs, both Concert Technology Corporation subsidiaries, stated that the recently formed Texas entity Ikorongo Texas held rights in the asserted patents that are limited to certain counties within the Western District of Texas, while North Carolina entity Ikorongo Tech held rights elsewhere. Judge Albright held that since the case could not have been brought in Northern California by Ikorongo Texas due to its geographically limited rights, neither could the entire case.

However, the Federal Circuit came to the opposite conclusion, holding that the plaintiffs’ arrangement was exactly the same type of “venue manipulation” that both the Supreme Court and Federal Circuit have both rejected in the context of similar bad-faith attempts to establish jurisdiction. Excluding the impact of that gamesmanship, the Federal Circuit ruled, the Ikorongo plaintiffs could have brought their case in Northern California.

As for the second stage of the transfer analysis, the Federal Circuit flagged several legal errors in Judge Albright’s application of certain private- and public-interest factors. Specifically, for the former, the court held that Judge Albright erred by underweighing the relative convenience of the Northern District of California, including by 1) giving too little weight to the presence of party witnesses, all of which were located in that venue; and 2) by presuming that nonparty witnesses also residing in that venue would likely not testify. Additionally, the Federal Circuit ruled that it was erroneous for Judge Albright to have weighed the public-interest “all practical problems” factor against transfer due to the presence of another case against Bumble in West Texas under a judicial economy rationale. The appellate court countered that the Bumble suit involved different accused features, while agreeing with Samsung that any overlap could be handled via multidistrict litigation. Yet another error was Judge Albright’s weighing of the “local interest” factor as neutral, despite the fact that the accused products were all developed in California, because acts of infringement occurred in his district. Such claims, explained the Federal Circuit, gave West Texas no more of a local interest than any other venue.

On July 8, the Federal Circuit reached the same result for a mandamus petition filed by Uber, another Ikorongo defendant that filed a transfer motion also denied by Judge Albright. In its five-page In re: Uber decision granting a writ of mandamus (2021-0150), the appellate court recapped its Samsung decision and explained that “[t]he district court here relied on the same improper grounds as in Samsung to diminish the clear convenience of the Northern District of California”. The same rationale for not allowing judicial economy to outweigh the convenience of the transferee venue “also apply with even more force here”. Similarly unavailing was Judge Albright’s emphasis on co-pending West Texas litigation, here including both Bumble and Lyft, underscoring that those cases too involved different accused products, while the LGE and Samsung cases were now in Northern California. The Federal Circuit also found error in Judge Albright’s emphasis on acts of infringement in his district for the “local interest” factor.

 

Juniper’s Mandamus Petition

The Samsung decision is just the latest in a series of recent decisions in which the Federal Circuit has pushed back on Judge Albright’s substantive handling of convenience transfers—and is among those cited in the mandamus petition filed by Juniper on July 2, seeking transfer of six cases filed against it by WSOU (2021-0160). In that petition, Juniper describes a similar set of facts and circumstances allegedly given improper weight by Judge Albright in his decision denying transfer to Northern California. The company alleges that his application of certain transfer factors “distorts them beyond recognition” and runs counter to the Federal Circuit’s guidance in a variety of respects.

For instance, Juniper draws parallels with Samsung in contesting Judge Albright’s decision to weigh the witness convenience only “slightly” in favor of transfer, despite the fact that eleven witnesses were located in Northern California and “at most” one is in West Texas. Juniper argues that discounting the convenience to party witnesses runs counter to both Samsung and the Federal Circuit’s second In re: TracFone Wireless decision (“TracFone II”), which held that “‘[t]he convenience of having several party witnesses be able to testify at trial without having to leave home’ outweighs any inconvenience to witnesses who live in neither district” (emphasis in petition). Relatedly, Juniper also contests Judge Albright’s weighing of the “compulsory process” factor as tipping slightly against transfer despite the presence of four nonparty witnesses in Northern California and none in Texas. Juniper argues that this conclusion was “patently erroneous” under the Federal Circuit’s In re: Apple decision, which held that this factor “weigh[s] heavily in favor of transfer when more third-party witnesses reside within the transferee venue than reside in the transferor venue”.

Additionally, Juniper alleges that venue machinations analogous to those from Samsung were also here ignored by Judge Albright, faulting him for finding that the testimony of plaintiff WSOU’s sole West Texas employee, a business development executive, could be relevant despite him lacking knowledge of or responsibility over patent licensing.  Giving weight to such “wholly irrelevant” testimony, Juniper argues, would reward “rank gamesmanship by plaintiffs” of the same type contemplated by Samsung.

Another objection raised by Juniper is Judge Albright’s assertion that his district’s short time to trial weighed against transfer under the “court congestion” factor, a conclusion that the Federal Circuit has criticized on several occasions. Among those decisions are Samsung and Apple, the latter of which held that “a court’s general ability to set a fast-paced schedule is not particularly relevant to this factor” and noted that for patent cases specifically (versus civil actions overall), the Northern District is actually faster.

Juniper further contests Judge Albright’s decision to weigh the “local interest” factor against transfer even though “the accused products were primarily designed and developed at Juniper’s Sunnyvale headquarters”. Under Samsung, the company argues that it is error to even find this factor neutral where “[t]he relevant events leading to the infringement claims here took place largely in Northern California, and not at all in the Western District of Texas”, let alone finding that it weighs against transfer. Also problematic, argues Juniper, was the court’s emphasis on the company’s purportedly “substantial presence” in West Texas and Texas overall, even though its only office in the district allegedly has nothing to do with the accused products. Under Apple, Juniper asserts, the “inquiry is ‘not merely the parties’ significant connections to each forum writ large,’ but instead the ‘significant connections between a particular venue and the events that gave rise to a suit’” (emphasis in original). Similarly erroneous in light of Apple, alleges Juniper, was Judge Albright’s reliance on WSOU’s alleged “generalized connections” to his district.

Additional coverage of the Federal Circuit’s decisions on venue rulings by Judge Albright can be found on RPX Insight, including Samsung (here), Apple (here), and TracFone II (here).

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