Federal Circuit Directs Transfer Of Patent Suit From Western District Of Texas To Northern District Of California
On Friday, July 28, 2020, the United States Court of Appeals for the Federal Circuit (“CAFC”) directed the United States District Court for the Western District of Texas (W.D. Tex.) to grant Adobe Inc.’s (“Adobe”) motion to transfer pursuant to 28 U.S.C. § 1404(a) to the United States District Court for the Northern District of California (N.D. Cal.). In re: Adobe Inc., F.3d __, (Fed. Cir. Jul. 28, 2020). The CAFC found that the court (i) did not properly accord weight to convenience of the transferee forum; (ii) overlooked that the willing witness factor favored transfer; and (iii) “ran afoul of governing precedent in giving dispositive weight to its ability to more quickly schedule a trial.” The CAFC ultimately held that “the district court’s denial of transfer here was a clear abuse of discretion.”
Plaintiff SynKloud Technologies, LLC (“SynKloud”) brought a suit in the W.D. Tex. against Adobe, a company with its headquarter in California, alleging infringement of six patents by various Adobe products related to cloud storage. Adobe moved to transfer the case to the Northern District of California pursuant to 28 U.S.C. § 1404(a), which authorizes transfer “[f]or the convenience of parties and witnesses, in the interest of justice.” Adobe argued that (i) SynKloud had no connection to Texas, (ii) even though Adobe had offices in the W.D. Tex., the teams responsible for the development, marketing, and sales of the accused services were primarily based in the N.D. Cal., (iii) the inventor of the asserted patents was located in the N.D. Cal., and (iv) non-party documents concerning system prior art were located in the N.D. Cal.
The district court denied Adobe’s motion from the bench, despite finding only one factor weighed in favor of retaining the case. In favor of transferring the case, the court found that the convenience of having Adobe’s, the inventor’s, and prior art documents in the N.D. Cal. outweighed SynKloud’s purported convenience, and that the compulsory process factor slightly favored transfer because the inventor was located in the N.D. Cal. The single factor in favor of retaining the case was the court congestion factor, because the default scheduling order in the W.D. Tex. would result in an expeditious trial.
On a petition for a writ of mandamus, the CAFC found the district court committed three errors, which taken together amount to a “clear abuse of discretion” and granted Adobe’s petition for a writ of mandamus to direct transfer to N.D. Cal.
First, the CAFC found that the district court failed to accord proper weight to the convenience of the transferee venue. The district court found that no private convenience factor favored retaining the case and several such factors favored transfer, but nonetheless weighed those factors as “slightly” favoring the transferee forum.
Second, the district court failed to weigh the cost of attendance for willing witnesses factor in its discussion, yet this factor also favored transfer. Adobe identified a significant number of its own employees as potential witnesses who reside in the N.D. Cal. On the other hand, SynKloud’s own employees will be coming from outside both districts.
Third, the district court erred in denying transfer based solely on its perceived ability to more quickly schedule a trial, which “does not withstand scrutiny.” The CAFC cited its prior decision in Genentech, that “where several relevant factors weigh in favor of transfer and others are neutral, then the speed of the transferee district court should not alone outweigh all of those other factors.” In re Genentech, Inc., 566 F.3d 1338, 1348 (Fed. Cir. 2009). The CAFC also explained that this factor concerns whether there is an appreciable difference in docket congestion between the two forums and that a district court’s general ability to set a schedule does not speak to docket congestion.