Federal Circuit’s NPE Venue Ruling, Though Characterized as “Made Out of Whole Cloth”, Binds Judge Albright

May 27, 2023

Western District of Texas Judge Alan D. Albright may no longer be the nation’s top district court patent judge as of Q1 2023, but his back-and-forth with the Federal Circuit, which has repeatedly reversed him on the issue of convenience transfer motions, remains. Some had expected the Fifth Circuit’s October 2022 In re: Planned Parenthood ruling to tip that back-and-forth in Judge Albright’s direction, since that decision appeared to require more deference to district judges on venue. This February, though, the Federal Circuit held otherwise, doubling down on its prior approach in In re: Google. Judge Albright has now acknowledged the binding impact of that holding, though not without offering a passing criticism. In refusing to reverse a prior order granting transfer of a Motion Offense, LLC case against Alphabet (Google), Judge Albright remarked that the Federal Circuit’s determination in Google that NPEs lack an interest in getting cases to trial quickly “appears to be made out of whole cloth”.

RPX’s prior coverage extensively details the Federal Circuit’s recurring objections to Judge Albright’s application of the convenience transfer factors. Over the course of numerous mandamus decisions reversing against him on that issue over the past few years, the appellate court has highlighted a series of legal errors in his transfer analyses, including his underweighing of the convenience for and/or cost of attendance of witnesses, his tendency to discount sources of proof in the transferee district, and his misapplication of factors related to compulsory process and willing witnesses. Judge Albright has also erred, per the Federal Circuit, by counting a defendant’s generalized presence in the district—e.g., through local offices not connected to acts as infringement—as supporting the “local interest” factor. An especially long-standing issue, among those dating back to reversals in 2020, has been Judge Albright’s argument that his district’s quick time to trial tips the “court congestion” factor against transfer, as discussed further below.

Those prior Federal Circuit decisions—as well as questions over their alleged inconsistency with the approach of the Fifth Circuit, the regional circuit that sets the law the Federal Circuit must apply for transfers in Texas cases—loomed heavily over Motion Offense’s May 2021 lawsuit against Google, in which the defendant moved for transfer to the Northern District of California that same December. The following May, Motion Offense argued in its opposition to that motion that the court should reject the Federal Circuit rulings cited by Google in favor of transfer, asserting that “Fifth Circuit precedent controls. Any conflicting precedent from another sister Circuit yields to that of this Circuit. The Federal Circuit cannot bind this Court or the Fifth Circuit on regional law”. In other words, per the district court’s later summary, “Motion Offense implore[d] this court to strictly apply only Fifth Circuit law”.

However, Judge Albright ruled to the contrary in his October 4, 2022 decision granting transfer, explaining that he is obligated to follow the Federal Circuit’s interpretation of Fifth Circuit law: “[T]his Court cannot and does not overrule the reasoning of the Federal Circuit in a patent case”. That said, Judge Albright underscored that he was granting transfer “only because of those Federal Circuit cases”: After scrutinizing the testimony of Google’s venue declarant (a frequent point of contention in other cases with transfer motions before Judge Albright) and finding him “credible but limited”, Judge Albright then noted the ways in which that appellate caselaw required him to tip certain substantive factors toward transfer.

Most relevant here are Judge Albright’s rulings as to three factors. Judge Albright held that he must weigh the factor relating to the need for compulsory process to secure the attendance of witnesses “heavily in favor of transfer” because he is bound by Federal Circuit caselaw requiring courts to presume that their subpoena power will be necessary when there is no indication of willingness (In re: DISH, 2021-0182) and that this factor weighs more heavily when more witnesses reside in the transferee venue than in the transferor (In re: Apple, 2014-0143). Here, he held that under Fifth Circuit law alone, this factor would have weighed toward transfer due to the lack of a showing of unwillingness. Additionally, for the factor concerning the location of sources of proof, Judge Albright concluded that this factor must weigh toward transfer under a different Federal Circuit In re: Google decision from October 2021 (2021-0171), which held in part that where some sources of proof are located in both venues, the equal access to electronic versions does not answer the inquiry as to their relative ease of access. In contrast, he again observed that Fifth Circuit law on its own would have led to the opposite result, as it imposes the burden on the movant to establish “that transfer will result in easier access to sources of proof”. Moreover, for the factor considering relative “court congestion”, Judge Albright found that his district had a much shorter time to trial than the Northern District of California, making this factor weigh against transfer. But he nonetheless concluded that because the Federal Circuit considers this metric factor the most speculative, and has held that this factor alone could not outweigh multiple other factors, it did not do so here (the balance of the remaining factors tipping toward transfer). Here, Judge Albright observed that in its 2009 In re: Genentech decision, the Federal Circuit had been much more deferential to the district court’s time-to-trial factfinding and did not overturn its conclusions on that factor.

Then came the Fifth Circuit’s October 31 Planned Parenthood decision, which appeared to depart from the Federal Circuit’s prior take on several of these issues. In particular, it reiterated its prior posture on the location of sources of proof: in reaffirming a lower court’s finding that this factor weighed against transfer because “the vast majority of the evidence was electronic, and therefore equally accessible in either forum”, the appellate court additionally held that the “location of evidence bears much more strongly on the transfer analysis when, as in Volkswagen, the evidence is physical in nature”. The Fifth Circuit also ruled that the factor related to the availability of compulsory process “receives less weight when it has not been alleged or shown that any witness would be unwilling to testify”, again reiterating a posture apparently distinct from the Federal Circuit’s approach. Perhaps most notably, though, the Fifth Circuit emphasized that “district courts have broad discretion in deciding motions to transfer”, and that under its Volkswagen I opinion, such transfer rulings may be overturned “only for clear abuses of discretion that produce patently erroneous results”. Per the Fifth Circuit, “[t]he standard for reversing that holding is high”. Motion Offense and Google then proceeded to brief the impact of this decision as the court considered the plaintiff’s motion for reconsideration of its transfer ruling.

However, the Federal Circuit’s precedential In re: Google opinion, issued on February 1, 2023, determined that Planned Parenthood does not undercut the court’s current approach. In Google, which overturned another transfer denial from Judge Albright, the court held that a clear showing that a venue is more convenient takes precedence over the district judge’s discretion. This bore most significantly on Judge Albright’s factfinding on relative time to trial in support of the court congestion factor, for which he had cited a lengthy list of recent decisions with times to trial shorter than the transferee venue as tipping this factor slightly against transfer. The Federal Circuit deferred to his “assessment of the average time to trial data” for the court congestion factor (citing Planned Parenthood and Genentech), but it held that “in this case it was a clear abuse of discretion to accord this factor any weight”—essentially, ruling that it does not owe any deference to the weight that the district court gives time to trial under Planned Parenthood, just to the underlying factfinding.

More dramatically, the Federal Circuit held that this was an abuse of discretion because the plaintiff is an NPE and, according to the court, thus has no urgent need for a quick trial to protect any market share. Here, the court cited its In re Juniper decision, which it characterized as “discounting time-to-trial difference because there was no ‘need of a quick resolution’ where patentee lacked ‘position in the market . . . being threatened’”.

On May 23, Judge Albright denied Motion Offense’s motion for reconsideration (with a minor amendment on May 25 to fix a typographical error), which relied primarily on Planned Parenthood—finding that under the Google decision’s reading of that case, Planned Parenthood “does not weigh in favor of granting reconsideration of this Court’s order granting transfer”. The decision focused most of all on the Google decision’s treatment of the court congestion factor, and its holding that NPEs lack an interest in quick time to trial. Judge Albright found that like the plaintiff in the Google case (Jawbone Innovations, LLC), “there is no evidence that Motion Offense is involved in product competition in the marketplace”. As a result, while the court had previously “‘weigh[ed] this as a single factor against transfer’ in its order transferring this case, under In re Planned Parenthood and In re Google, the Court would now have to find that this factor is neutral”.

Judge Albright then took the opportunity to again argue that the Federal Circuit had gotten this wrong, finding no basis in Fifth Circuit’s law for its position on this issue—but conceding that he had no power to ignore Google:

The Court notes, however, that the Federal Circuit in In re Google cites no binding Fifth Circuit precedent that compels its conclusion that a plaintiff or patentee be engaged in product competition in the marketplace. Although the Federal Circuit’s determination that the patentee must be engaged in product competition appears to be made out of whole cloth, In re Google is binding precedent on this Court and the Court will therefore follow it.

Here, he noted in a footnote that the only authority cited by the Federal Circuit in support is its own precedential decision from In re: Juniper I, which established that Judge Albright could not rely on scheduling orders versus actual statistics on court congestion. Per Judge Albright, that case only cites another Federal Circuit ruling (its 2011 In re: Morgan Stanley decision) that “does not rely on any Fifth Circuit law suggesting that a plaintiff or patentee must be engaged in product competition in the marketplace for a court to accord any weight to this factor”.

Moreover, in that same footnote, Judge Albright appeared to read the Google “product competition” requirement as logically requiring some form of request for injunctive relief for the “court congestion” factor to have any weight. Since Planned Parenthood still concluded that this factor weighed against transfer, despite the fact that the plaintiffs and intervenor there (which, it should be noted, did not raise patent claims) had primarily sought monetary damages “and did not seek preliminary injunctive relief”, Judge Albright appeared to imply that Google had misread Planned Parenthood on this point.

Judge Albright then proceeded somewhat differently for the other two factors addressed in the decision. For one, the factor concerning ease of access to sources of proof, the Google decision did not invoke Planned Parenthood or address the applicable substantive requirements at all, merely holding that under the facts of that case, his finding in that case that this factor was neutral was “clearly erroneous as this factor favors transfer” under the applicable facts. In other rulings since Planned Parenthood, Judge Albright has applied that case directly and, where necessary, has sought to reconcile it with prior Federal Circuit caselaw. He did the former here, finding that under Planned Parenthood, “[w]hen most of the evidence is electronic and equally accessible in either forum, this factor weighs against transfer”. However, he found that when read under the Fifth Circuit’s decision, this factor “does not have as much bearing” as the other applicable factors and would not “[e]ven if the Court had found that most of the evidence in this case was electronic (which it did not expressly find)”. As a result, Judge Albright declined to reconsider his transfer order on the basis of that factor.

The other remaining factor concerned the availability of compulsory process, in particular as it relates to the treatment of witness willingness. Here, Judge Albright noted that “the Federal Circuit in In re Google affirmed this Court’s reliance on [its 2018 decision from] In re HP Inc. that when there is no indication that a non-party witness is willing, the witness is presumed to be unwilling”. While he observed that the Federal Circuit did not explicitly cite Planned Parenthood in its holding as to that factor, Judge Albright nevertheless found “that the Federal Circuit’s reliance on In re Planned Parenthood elsewhere in its decision implies that the Federal Circuit is maintaining its steadfast opinion that repeatedly presumes third-party unwillingness and weighs this factor heavily in favor of transfer”. As a result, Judge Albright “decline[d] Motion Offense’s invitation to reconsider here in light of In re Planned Parenthood”, and then proceeded to deny the motion altogether.

For more on the Google decision, see “Federal Circuit Sidesteps Fifth Circuit Ruling on Convenience Transfers” (February 2023). Further details on Planned Parenthood and Judge Albright’s prior treatment of it can also be found here.