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Things May Be Bigger in Texas, but Not Necessarily More Convenient

The US Court of Appeals for the Federal Circuit granted a mandamus petition after analyzing the Fifth Circuit’s public and private interest factors for transfer motions and ordered the US District Court for the Western District of Texas to transfer a case to the petitioner’s venue. In re Google LLC, Case No. 23-101 (Fed. Cir. Feb. 1, 2023) (Lourie, Taranto, Stark, JJ.).

Jawbone Innovations, LLC, had an eventful 2021:

  • February: Incorporated in Texas
  • May: Obtained ownership of nine patents (all directed to technologies behind the eponymous product line that liquidated in July 2017)
  • August: Rented office space in Waco, Texas
  • September: Asserted the nine patents it just acquired against Google in the Western District of Texas–Waco Division.

Google moved to transfer the dispute to the US District Court for the Northern District of California. That district was where (1) the accused products (earbuds, smartphones, speakers, displays and software) were researched, designed and developed; (2) the asserted technology was developed, and the asserted patents were prosecuted; and (3) the witnesses and sources of proof were primarily located. In contrast, no witnesses or sources of proof were located in the Western District of Texas. Moreover, Jawbone Innovations had no personnel in Waco nor activities related to the accused technology in the whole of Texas.

Judge Albright nevertheless denied Google’s transfer motion, weighing the Fifth Circuit’s four public interest factors and four private interest factors and finding that the transferee venue failed to meet the Fifth Circuit’s “clearly more convenient” standard. With the district court finding half of the eight factors not favoring either the transferee or the transferor, its holding boiled down to a ruling that considerations of “court congestion” and “judicial economy” (found to favor the transferor) outweighed considerations of “unwilling witness compulsion” and the “cost of attendance for willing witnesses” (found to favor the transferee).

Google petitioned the Federal Circuit for a writ of mandamus. The Court, applying the Fifth Circuit’s eight factor test, identified clear error in the district court’s analysis of five of the factors.

First: Addressing the “cost of attendance for willing witnesses” factor, the Federal Circuit found error in the district court’s conclusion that this factor only slightly favored transfer. Rather, the Court explained that this factor “weigh[ed] heavily in favor of transfer” because the transferee venue was clearly more convenient for potential witnesses, especially Google employees with technical, marketing and financial knowledge of the accused products. The error was localized to how the district court considered a Google declaration identifying at least 11 potential employee witnesses (all of whom were located in the transferee venue) and Jawbone Innovations’ assertions that the declaration omitted three potentially relevant Texas-based employees. The Court noted that while this 11 to three imbalance alone was sufficient to settle this factor, the district court’s error went further, finding Google’s declaration unreliable and less worthy of consideration because of the alleged omissions. The Federal Circuit determined this was error on error because the district court improperly ignored that the depositions [...]

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Venue Manipulation Obviates Geographically Bounded Claims in Venue Analysis

The US Court of Appeals for the Federal Circuit issued a rare grant of two mandamus petitions directing the US District Court for the Western District of Texas to transfer the underlying patent infringement actions to the US District Court for the Northern District of California pursuant to 28 U.S.C. § 1404(a). In re: Samsung Elecs. Co., Ltd., Case Nos. 21-139, -140 (Fed. Cir. June 30, 2021) (Dyk, J.)

Ikorongo Technology owned four patents directed to functionalities allegedly performed by applications run on the accused mobile products sold by Samsung and LG. Ikorongo Technology assigned to Ikorongo Texas—an entity formed only weeks before—exclusive rights to sue for infringement of those patents within specified parts of the state of Texas, including certain counties in the Western District of Texas, while retaining the rights to the patents in the rest of the United States.

Ten days later, Ikorongo Texas sued Samsung and LG in the Western District of Texas. Although Ikorongo Texas claimed to be unrelated to Ikorongo Technology, the operative complaints indicated that the same five individuals owned both Ikorongo Texas and Ikorongo Technology, and that both entities shared office space in North Carolina.

The day after filing the initial complaints, Ikorongo Texas and Ikorongo Technology filed first amended complaints, this time naming both Ikorongo Technology and Ikorongo Texas as co-plaintiffs, noting that together Ikorongo Texas and Ikorongo Technology owned the entire right, title and interest in the asserted patents, including the right to sue for past, present and future damages throughout the United States and the world.

Samsung and LG separately moved under 28 U.S.C. § 1404(a) to transfer the suits to the Northern District of California, arguing that “three of the five accused third-party applications were developed in Northern California, where those third parties conduct significant business activities and no application was developed or researched in Western Texas.” Samsung and LG also argued that potential witnesses and sources of proof were located in the Northern District of California.

The district court first concluded that Samsung and LG failed to establish § 1404(a)’s threshold requirement that the complaints “might have been brought” in the Northern District of California. Because Ikorongo Texas’s rights under the asserted patents were limited to the state of Texas and could not have been infringed in the Northern District of California, the district court held that venue over the entirety of the actions was improper under § 1400(b), which governs venue in patent infringement cases. Alternatively, the district court analyzed the traditional public- and private-interest factors, finding that defendants had not met their burden to show cause for transfer. Samsung filed for mandamus to the Federal Circuit.

The Federal Circuit found that the district court erroneously disregarded Ikorongo Technology and Ikorongo Texas’s attempts to manipulate venue when analyzing venue under § 1404(b). While no act of infringement of Ikorongo Texas’s geographically bounded rights took place in the Northern District of California, the Federal Circuit determined that “the presence of Ikorongo Texas is plainly recent, ephemeral, and [...]

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