Federal Circuit Again Rebukes an Eastern District of Texas Judge for Refusing to Transfer Case

A note to the judges of the Eastern District of Texas: The Federal Circuit will be very unhappy if you refuse to transfer patent cases out of your district that don't have a significant connection to the area. For the fourth time in the last year, the circuit issued a writ of mandamus ordering a federal judge there to transfer a patent infringement case to another district. Thursday's ruling is another setback to the plaintiffs intellectual property bar, which has in recent years viewed the district as an attractive forum.

Susan Beck

The American Lawyer

2009-12-18 12:00:00 AM
A note to the federal district court judges of the Eastern District of Texas: In case it wasn't already clear, the Federal Circuit will be very unhappy if you refuse to transfer patent cases out of your district that don't have a significant connection to the area. For the fourth time in the last year, the Federal Circuit took the extraordinary step of issuing a writ of mandamus ordering a federal judge there to transfer a patent infringement case to another district. Thursday's ruling is also another setback to the plaintiffs intellectual property bar, which has in recent years viewed the Eastern District of Texas as an attractive forum.

The most recent mandamus request was filed by Nintendo, which in November 2008 was sued by Motiva and its Texas lawyer Mark Lanier for patent infringement over its wildly popular Wii game. At the time, Lanier told us there was a good chance of the case going to trial. He was probably thinking of a Texas trial.

Nintendo, represented by Orrick, Herrington & Sutcliffe, had other ideas. It asked the court to transfer the case from the Eastern District of Texas to the Western District of Washington, arguing that the dispute had no meaningful connection to Texas. Nintendo is a Japanese company with a Redmond, Wash.-based affiliate; Motiva is an Ohio company; none of the primary witnesses had any connection to Texas, and no evidence was located there, Nintendo maintained. Motiva countered that Nintendo had not met its burden of proving that another venue would clearly be more convenient. The sale of Wii prodcuts in Texas was sufficient to give the court jurisdiction over the case, Motiva argued. In June federal district court Judge Leonard Davis sided with Motiva, and denied Nintendo's request.

In its mandamus order, the Federal Circuit panel found that Davis "clearly abused his discretion" for refusing to transfer the Nintendo case, explaining that "this case features a stark contrast in relevance, convenience, and fairness between the two venues. ... No parties, witnesses, or evidence have any material connection to the venue chosen by the plaintiff." The court pointedly noted that for similar reasons it had also ordered the transfer out of the Eastern District of Texas of cases brought against TS Tech, Genentech and Hoffmann-La Roche. We wrote about the Hoffman-LaRoche decision when it came down earlier this month.

The briefs that Motiva filed with the Federal Circuit can be found here and here. We were not able to get copies of Nintendo's briefs.

Orrick's Alex Chachkes, the lead lawyer for Nintendo, declined to comment and referred us to a Nintendo spokesperson. We called her but have not heard back.

We did talk to Motiva's lawyer, Christopher Banys of The Lanier Law Firm in Palo Alto, Calif. "We're disappointed and considering our options," he said, adding, "There appears to be a war going on between the Federal Circuit and the Eastern District of Texas."

Edward Reines, a partner at Weil, Gotshal & Manges who closely follows this issue, says the law governing transfers in the Eastern District of Texas has been transformed. "It's safe to say over the last two to three years that there has been nothing less than a sea change in the law on transfers," he said. The turning point, he notes, was the 5th Circuit's en banc ruling in 2008 granting a mandamus motion by Volkswagen of America to transfer a product liability case out of the district. This ruling and others, he said, have already shifted IP plaintiffs away from this once-popular forum. "Plaintiffs used to file cases in Texas that they would not file now."

This article first appeared on The Am Law Litigation Daily blog on AmericanLawyer.com.