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Federal Circuit Grants Mandamus Directing Transfer From Eastern District Of Texas To Northern District Of California
01/25/2022On January 19, 2022, the United States Court of Appeals for the Federal Circuit (CAFC) granted mandamus directing the United States District Court for the Eastern District of Texas (EDTX) to transfer the case against petitioner to the United States District Court for the Northern District of California (NDCA). In re Netflix, Inc., No. 2022-110 (Fed. Cir. Jan. 19, 2022). The CAFC found that Chief Judge Rodney Gilstrap’s denial of transfer under 28 U.S.C. 1404(a) was a clear abuse of discretion.
In March 2021, CA Inc. and Avago Technologies (Respondents) filed suit against Netflix, Inc. (Petitioner) in EDTX asserting five patents covering networking techniques for improving the quality and efficiency of content delivery. Petitioner moved for transfer to NDCA under 28 U.S.C. Section 1404(a). Judge Gilstrap denied the motion, finding that, although the “local interest” factor favored transfer because the NDCA—where both Petitioner and Respondents were headquartered—was the center of gravity of the suit, the remaining factors were either neutral or weighed against transfer. After considering Petitioner’s writ of mandamus, the CAFC found that Judge Gilstrap clearly erred in denying transfer to NDCA.
First, the CAFC found that Judge Gilstrap erred in finding that the “sources of proof” factor weighed against transfer even though Petitioner provided evidence that its source code and engineering and financial documents were located in NDCA. The CAFC found that Judge Gilstrap legally erred in requiring Petitioner “to identify [] specific evidence in the record and articulate the precise way that evidence supports its claim” when no authority imposed such level of precision for a transfer motion. The CAFC found that Judge Gilstrap also improperly relied on the availability of contracts involving Petitioner in EDTX without any finding that such contracts were not also available in NDCA.
Second, the CAFC found that Judge Gilstrap abused his discretion in finding that the “compulsory process” factor weighed against transfer even though far more nonparty witnesses were located in NDCA than in EDTX. The CAFC found that Judge Gilstrap erred in requiring Petitioner to show that its 13 identified nonparty witnesses would provide important testimony—for transfer motions, a defendant need only show that potential witnesses have relevant and material information. The CAFC found that Judge Gilstrap also erred substituting his own generalization that Petitioner’s prior art and patent prosecution witnesses are unlikely to testify for any case-specific reason why a particular potential witness would not testify.
Third, the CAFC found that Judge Gilstrap erred in finding the “willing witnesses” factor neutral even though Petitioner had identified twenty-one witnesses in NDCA to Respondents’ seven witnesses in EDTX, all employees of Petitioner. Specifically, the CAFC found that Judge Gilstrap erred in giving equal weight to the witnesses identified by Respondents, who had no particular tie to the facts of the case, while discounting the witnesses identified by Petitioner, who had demonstrated knowledge of the accused technology—including the authors of articles cited in Respondents’ complaint.
Finally, the CAFC found that Judge Gilstrap had no sound basis to premise his denial of transfer on the EDTX’s modestly faster average time to trial when the other relevant factors weigh in favor of transfer or are neutral.
