Federal Circuit Continues Transfer Trend, Orders Gilstrap to Send Google and Samsung Cases to Northern California

On May 23, the U.S. Court of Appeals for the Federal Circuit issued an order in In re: Google, LLC granting petitions by Google, Waze and Samsung seeking writs of mandamus to direct the Eastern District of Texas to transfer a trio of patent infringement suits brought by patent owner AGIS Software Development to the Northern District of California. Although the Federal Circuit’s order is non-precedential, it continues the appellate court’s recent penchant for exercising mandamus relief in venue issues that some commentators have found questionable, at best.

Judge Gilstrap Denies Motions to Transfer Venue Over Judicial Economy, Court Congestion

The petitions for mandamus relief were filed by Google, Samsung Electronics, and Google subsidiary Waze Mobile Limited in patent infringement suits targeting accused mobile applications enabling users to view the locations of other members in a group and communicate with those group members. Claims from two AGIS-owned patents were asserted in all three cases. Those patents are U.S. Patent No. 9749829, Method to Provide Ad Hoc and Password Protected Digital and Voice Networks, and U.S. Patent No. 9820123, same title as the ‘829 patent. AGIS’ patent infringement lawsuit against Google included another three patents not included in the Samsung or Waze actions.

Each of these three defendants moved to transfer their respective patent cases brought by AGIS to Northern California under 28 U.S.C. § 1404(a), which enables a district court to transfer a civil action to any other U.S. district court where the action might have been brought if the convenience of parties and witnesses weigh in favor of a transfer. In denying the motions to transfer venue, the Eastern Texas court acknowledged that Northern California had a comparative advantage in being able to compel witnesses unwilling to appear in Eastern Texas. However, Eastern Texas found that several factors weighed against transfer, including judicial economy considerations including the fact that AGIS had previously litigated the asserted patents before the same judge, U.S. District Judge Rodney Gilstrap, Chief Judge of the Eastern District of Texas, up to the pretrial conference. The Eastern Texas court also cited court congestion as a factor weighing against transfer, concluding that it was capable of holding a trial on the infringement allegations more quickly than could the Northern California district court.

Applying regional circuit court case law to the motions to transfer under Section 1404(a), the Federal Circuit noted that the U.S. Court of Appeals for the Fifth Circuit has recognized several public and private interest factors relevant to the transfer determination. The public interest factors assessed by the Fifth Circuit include the administrative difficulties flowing from court congestion, the local interest in having disputes regarding activities occurring principally within a particular district, the familiarity of the forum with the law governing the case, and the avoidance of unnecessary problems involving conflicts of law or applications of foreign law. The private interest factors include ease of access to sources of proof, the availability of compulsory process to secure the attendance of non-party witnesses, the relative convenience of the two forums for potential witnesses, and all other practical problems impacting the ease and efficiency of trying the case. The standard of appellate review applied by the Federal Circuit for rulings on motions to transfer venue is for clear abuse of discretion.

CAFC: Denials on Venue Transfer Motions Were ‘Patently Erroneous Result’

Despite the highly deferential standard of review applied by the Federal Circuit, which only overturns a denial to transfer venue if it produced a “patently erroneous result,” the appellate court granted each petition for mandamus relief to compel transfer of AGIS’ patent infringement suits from Eastern Texas to Northern California. In part, this determination was made due to the sheer number of witnesses identified by either side in the three cases. While AGIS identified one witness located within Eastern Texas, Google and Samsung both identified 10 witnesses located in Northern California, five with information relevant and material to the development of the accused mobile applications and five who could testify on prior art. AGIS had identified more than one witness who would appear in the Eastern Texas actions, including potential witnesses in Austin, TX, but the district court found that these witnesses were not to be given significant weight because their visits to Eastern Texas “would require hours of travel regardless.”

The presence of technical documents and source code relating to the accused functionality also weighed in favor of transferring the three cases to Northern California. The district court had not weighed the presence of documents and code as favoring Northern California, reasoning that such information could have been produced electronically for the Eastern Texas action. However, citing to In re: Juniper Networks (2021), the Federal Circuit noted that electronic storage of documents does not render obsolete the first private interest factor on access to sources of proof.

The Federal Circuit also faulted the Eastern Texas district court’s analysis of public interest factors including Northern California’s interest in resolving claims against Google and Samsung. The appellate court reasoned that Northern California had a substantial local interest in resolving the dispute as both Google’s design of the accused instrumentality, at issue in the lawsuits against Google and Samsung, and Waze’s development of the accused Waze Carpool mobile application occurred within the Northern District of California. The Federal Circuit found that the district court clearly abused its discretion in weighing this forum transfer factor as neutral, especially in light of the fact that AGIS’ sole presence in Eastern Texas is a single office in Marshall, TX, shared with another AGIS subsidiary without an employee working regularly from that office. While the district court weighed the general presence of Google and Samsung, including a facility in Flower Mound, TX, at which Google devices are repaired by an independent company, against transferring the case to Northern California, the Federal Circuit explained in a footnote that under Juniper, a defendant’s general presence in a particular forum does not establish a local interest that weighs more heavily than the local interest tied to events giving rise to the alleged infringement.

After considering the remaining public interest factor, the Federal Circuit found that those weighed in favor of transferring all three suits to Northern California as well. Although AGIS’ patent claims had previously been construed by Judge Gilstrap in Eastern Texas, the judicial economy gained by maintaining the suits in that district was clearly insufficient to outweigh the other factors favoring transfer. As well, the Federal Circuit found that Eastern Texas’ ability to schedule a trial faster than Northern California had more to do with the “considerable delay in resolving the transfer motions” rather than actual court congestion. The Federal Circuit vacated Judge Gilstrap’s orders denying transfer and directed the Eastern Texas district court to grant each of the three motions to transfer AGIS’ patent infringement suits to Northern California.

Why Is the Federal Circuit So Concerned With Texas Federal Courts?

The Federal Circuit has spilt a great deal of ink in recent months granting petitions for mandamus relief to transfer patent infringement suits out of Texas federal district courts. Although U.S. District Judge Alan D. Albright of the Western District of Texas has been the main focus of those orders to transfer forum on remand, this isn’t the first instance in which the Federal Circuit has ordered Judge Gilstrap to transfer a patent infringement case to the defendant-friendly Northern District of California. As IPWatchdog’s President and CEO Gene Quinn has pointed out in the past, the standard for granting mandamus relief requires the Federal Circuit to grant substantial deference to district court decisions, and in Juniper the Federal Circuit overturned Judge Albright’s denial of transfer despite the fact that Juniper Networks provided no evidence that any witness would have to be compelled to testify in Western Texas. “Like in so many areas of law, the Federal Circuit has jumped the shark with respect to venue,” Quinn concluded.

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