Federal Circuit Holds That Court Congestion Factor Of The Transfer-For-Convenience Analysis Has Less Significance For Plaintiffs Not Engaged In Product Competition In The Marketplace
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  • Federal Circuit Holds That Court Congestion Factor Of The Transfer-For-Convenience Analysis Has Less Significance For Plaintiffs Not Engaged In Product Competition In The Marketplace
     
    02/14/2023
    On February 1, 2023, the United States Court of Appeals for the Federal Circuit (CAFC) granted a petition for writ of mandamus directing the United States District Court for the Western District of Texas (W.D. Tex.) to vacate its order denying transfer and to transfer the case to the United States District Court for the Northern District of California (N.D. Cal.).  In re Google LLC, No. 2023-101, —F.4th— (Fed. Cir. Feb. 1, 2023).  The Federal Circuit found that the W.D. Tex. clearly abused its discretion in, inter alia, weighing the court congestion factor against transfer where plaintiff did not compete in the market and is not threatened in the market in a way that might otherwise add urgency to case resolution.
     
    On September 23, 2021, Jawbone Innovations, LLC (Respondent) filed suit against Google LLC (Petitioner) in the W.D. Tex. for infringement of nine patents related to voice detection and acoustic technology.  Respondent was incorporated in Texas and was assigned ownership of the asserted patents only months before filing suit.  On April 29, 2022, Petitioner moved to transfer for convenience under 28 U.S.C. § 1404 to the N.D. Cal., where the accused technology was developed, where the technology underlying the asserted patents was developed by the prior patent owner, and where witnesses and sources of proof for both sides were primarily located.  Petitioner also argued that there were no witnesses or sources of proof in the W.D. Tex.
     
    Courts evaluate private and public interest factors in connection with determining whether a case should be transferred under § 1404.  The private interest factors are: (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; and (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive.  The public interest factors are: (5) the administrative difficulties flowing from court congestion; (6) the local interest in having localized interests decided at home; (7) the familiarity of the forum with the law that will govern the case; and (8) the avoidance of unnecessary problems of conflict of laws or in the application of foreign law.
     
    The W.D. Tex. denied transfer finding that, although the availability of compulsory process and witness convenience factors favored transfer, the judicial economy and court congestion factors weighed against transfer and all remaining factors were neutral.  Petitioner petitioned for a writ of mandamus in connection with such denial, which the CAFC granted.
     
    First, the CAFC found that the W.D. Tex. erred in weighing the court congestion and judicial economy factors against transfer, instead of finding them neutral.  Noting that it was undisputed that Respondent was not engaged in product competition in the marketplace and not threatened in the market, the CAFC found that the W.D. Tex. erred in according any significance to the time-to-trial difference between transferee and transferor venues in evaluating the court congestion factor because there was no urgency to case resolution.  The CAFC also found that the W.D. Tex. erred in relying on co-pending cases involving different defendants and accused products to weigh the judicial economy factor against transfer, noting that such considerations cannot undermine the clear case for transfer based on other factors such as witness convenience.
     
    Second, the CAFC found that the W.D. Tex. erred in weighing the witness convenience factor only slightly in favor of transfer, instead of significantly in favor of transfer.  The CAFC found that the three Texas employees Respondent identified pale in comparison to the eleven employees located in the N.D. Cal. identified by Petitioner.  The CAFC further noted that there was no case law to support the W.D. Tex.’s decision to discount an employee declaration submitted in support of Petitioner’s motion on the ground that the declarant did not personally work on the design, development, or testing of the accused products or based on perceived gaps in the declarant’s knowledge.
     
    Last, the CAFC held that the W.D. Tex. erred in finding that the local interest and relative ease of access to sources of proof factors were neutral, instead of favoring transfer.  The CAFC found that the W.D. Tex. erred in ignoring evidence of witnesses and evidence from both sides located in the N.D. Cal. and in giving significant weight to Respondent’s presence in Waco, when such presence was established less than a year before filing suit, Respondent had no personnel in Texas, and Respondent conducted no activities from Texas related to the accused technology.
    CATEGORIES: IP Litigation Procedure, Transfer

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