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Message to Judge Albright: Venue Motions Are First Order of Business

The US Court of Appeals for the Federal Circuit vacated a scheduling order from the US District Court for the Western District of Texas and directed the court to postpone fact discovery and other substantive proceedings until it considered a motion for transfer. In re: Apple Inc., Case No. 22-162 (Fed. Cir. Nov. 8, 2022) (Reyna, J.) The Federal Circuit ordered that Apple’s motion to transfer must proceed expeditiously as the first order of business, precluding fact discovery and other substantive matters. The Court has repeatedly scolded Judge Albright for his refusal to transfer patent cases out of the Western District of Texas.

Aire Technology sued Apple for patent infringement in October 2021. In April 2022, Apple moved to transfer the action to the US District Court for the Northern District of California, pursuant to 28 U.S.C. § 1404(a). During venue discovery, Apple submitted declarations by its employees, offered to make the declarants available for deposition, and stated non-opposition to a “reasonable continuance” of the transfer proceedings. Judge Albright granted Apple’s motion but sua sponte ordered the parties to complete fact discovery (which the court extended by 30 weeks) followed by another six weeks of rebriefing before he would rule on Apple’s request to transfer. Apple filed a petition for mandamus with the Federal Circuit seeking an order to vacate the district court’s scheduling order and promptly rule on the transfer motion, staying all proceedings on the merits until the transfer was resolved.

Apple argued that the district court abused its discretion in ordering the parties to complete 30 more weeks of fact discovery and six weeks of rebriefing the issue to decide on Apple’s transfer request. Apple noted that by the time the district court considered Apple’s motion, a full year would have elapsed since Apple initially sought the transfer, fact discovery would be completed, the parties’ infringement and invalidity contentions would be served, the asserted claims and prior art references would be narrowed, and the parties would have exchanged preliminary trial exhibits and witness lists.

The Federal Circuit agreed with Apple that the district court’s scheduling order went too far. The Court stated that “it is a clear abuse of discretion to require the parties to expend additional party and court resources litigating the substantive matters of the case while Apple’s motion to transfer unnecessarily lingers on the docket.” The Court noted that Aire consented to resolving Apple’s transfer motion at any time, provided that no stay interfered with discovery, claim construction proceedings or preparation of the case for trial.

The Federal Circuit disagreed with the district court’s view that delaying the decision until after full fact discovery and rebriefing could reduce “speculation” and “allow the parties to provide the court with the best evidence for ruling on a motion to transfer.” The Court stated that discovery on the transfer motion itself was sufficient to allow a decision of that motion, especially because the parties agreed that further venue discovery was unnecessary. The Federal Circuit ordered the district [...]

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Golden State of Mind: Witness Convenience Isn’t Based Solely on Travel Distance

The US Court of Appeals for the Federal Circuit ordered a district court to transfer a patent infringement case from Texas to California because the district court had wrongly assessed facts relating to the convenience of witnesses when it originally denied a motion to transfer venue. In re: Apple Inc., Case No. 22-128 (Fed. Cir. Apr. 22, 2022) (Dyk, Reyna, Chen, JJ.) (non-precedential).

CPC Patent Technologies PTY Ltd. filed a lawsuit against Apple in the Western District of Texas, alleging that Apple’s mobile phones, tablets and computing products equipped with Touch ID, Face ID or Apple Card features infringed three of CPC’s patents relating to biometric security. Apple moved to transfer to the Northern District of California, arguing that its employees responsible for the design, development and engineering of the accused functionality resided either in California or outside of the United States, and that the employees most knowledgeable about the marketing, licensing and financial issues relating to the accused products resided in California. Apple explained that no employees with relevant information worked in Western Texas.

The district court denied Apple’s motion. After acknowledging that the action might have been brought in Northern California, the district court analyzed the private and public interest factors governing transfer determinations. The court determined that the factor concerning the convenience of willing witnesses slightly favored transfer. However, the court determined that the factor accounting for the availability of compulsory process weighed strongly against transfer. The district court also determined that court congestion and practical problems factors weighed against transfer based on its ability to quickly reach trial and the fact that CPC had another pending infringement suit in Western Texas. The district court recognized that Apple had identified seven relevant witnesses in California who would have to travel to Texas but found that inconvenience was counterbalanced by the presence of two Apple employees in Austin who CPC insisted had relevant information, and an Apple witness in Florida who would “find it about twice as inconvenient to travel to [Northern California] than to [Western Texas] because Texas sits halfway from Florida to California.” The district court also relied on its ability to compel the third-party Mac Pro manufacturer in Western Texas to attend trial. Finally, the Court noted that there was local interest in the dispute because Apple employs thousands of workers in Western Texas. Balancing these facts, the district court determined that Apple had failed to meet the burden of proving that Northern California was clearly more convenient that Western Texas, and thus denied the motion. Apple petitioned for mandamus review.

The Federal Circuit reversed, finding that Apple had shown clear entitlement to transfer to the Northern District of California. The Court found that the district court erroneously relied on two Apple employees in Austin whom CPC identified as potential witnesses and concluded that it was far from clear that either employee had relevant or material information. One employee had testified that he worked on authentication technology that was different from that accused by CPC, [...]

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