Nevertheless, patent plaintiffs just keep filing cases in Marshall and Tyler, Tx., and pulling all sorts of maneuvers to make it seem as though they have business connections to that out-of-the-way region of the country. A company called Allvoice Developments is a good case in point. Allvoice operates its voice-recognition patent licensing business from the United Kingdom, where the inventor of its key patent lives. It also, however, has an office in Tyler. And 16 days before Allvoice filed an infringement suit against Microsoft in 2009, the company incorporated under the laws of Texas.
For Tyler federal district court judge Leonard Davis, those were reasons enough to deny Microsoft’s motion to transfer Allvoice’s case out of East Texas. (Microsoft’s lawyers at Weil, Gotshal & Manges proposed two alternative venues: the Western District of Washington, where most of Microsoft’s witnesses are located; or the Southern District of Texas, where a previous suit involving the same Allvoice patent was litigated.) Last April, Judge Davis adopted the findings of federal magistrate judge John Love, ruling that the case could stay in Tyler.
The U.S. Court of Appeals for the Federal Circuit disagreed. In an 8-page ruling Monday, a three-judge panel granted Microsoft’s mandamus petition and ordered Allvoice’s case transferred to Microsoft’s home court in Washington State. The per curiam order says Allvoice is no different from the plaintiffs in a short string of recent rulings in which the Federal Circuit found East Texas judges abused their discretion in refusing to transfer patent cases.
The panel–Judges Judith Newman, Daniel Friedman, and Alan Lourie–essentially told Allvoice (and Judge Davis) that patent plaintiffs can’t pull the wool over the eyes of the Federal Circuit. “Allvoice contends that…it has an established presence in the Eastern District of Texas,” the order says. “Allvoice’s argument, however, rests on a fallacious assumption: that this court must honor connections to a preferred forum made in anticipation of litigation and for the likely purpose to make that forum appear convenient.” Allvoice’s no-employee Tyler office and pre-suit Texas incorporation, the appellate panel concluded, were mere litigation tactics.
Microsoft’s team was led by David Lender of Weil, who referred our request for comment to Microsoft. The company sent us this e-mail statement: “Microsoft is pleased that the Federal Circuit agreed with our view of the case, and that its ruling continues the trend toward stricter standards on venue for patent infringement cases.”
Allvoice is represented by Gardere Wynne Sewell. Chris Perque of Gardere Wynne didn’t return our call.
For what it’s worth, Professor Lemley’s study says the win rate for plaintiffs in the Western District of Washington is 20 percent.
This story originally appeared in The Am Law Litigation Daily, a Corporate Counsel sibling publication.