Applying these factors, the Federal Circuit recognized that the Texas district court was correct in affording no weight to several factors, including (1) the availability of compulsory process; (2) possibility of delay and prejudice (in granting transfer); (3) administrative difficulties due to court congestion; and (4) that it was not in a better position than the Southern District of Ohio in deciding the merits. The Texas district court, however, made four significant errors according to the Federal Circuit.

• First, the Texas district court gave too much weight to Lear’s choice of venue. While entitled to deference, plaintiff’s choice of venue is not a distinct factor.

• Second, the Texas district court ignored the Fifth Circuit’s “100-mile” rule which requires that “[w]hen the distance between an existing venue [and] proposed venue . . . is more than 100 miles” the factor of witness convenience “increases in direct relationship to the additional distance to be traveled.” In re Volkswagen AG, 371 F.2d 201, 204-05 (5th Cir. 2004) (Volkswagen I). In TS Tech, all of the identified key witnesses are in Ohio, Michigan and Canada, 900 more miles away. Not giving this factor “great weight” in favor of transfer was, according to the Federal Circuit, clear error.

• Third, the Texas district court erred by “reading out of the §1404(a) analyses factor regarding the relative ease of access to sources of proof.” Yes, it is true that electronic discovery makes access easier, but the “vast majority of physical and documentary evidence” will be found in Ohio, Michigan and Canada – and none in Texas. To view this factor as neutral, and not in favor of transfer, was error.

• Fourth, the Texas district court’s conclusion that the public interest factor disfavored transfer (and that the citizens of Texas had a “substantial interest” in having the case tried locally) “was unequivocally rejected by the Fifth Circuit in Volkswagen I and Volkswagen II. As in Volkswagen II it “stretches logic” to say “the local interest factor weighed against transfer because such rationale ‘could apply virtually to any judicial district or division in the United States.’” After all, according to the court, the vehicles were sold throughout the country placing the citizens of Texas in no better position, or having any “more or less of a meaningful connection to this case than any other venue.” It was error, therefore, to weigh this factor against transfer.

Recognizing “no easy-to-draw line” separating “clear” abuse of discretion from “mere” abuse, the Federal Circuit found the former, concluding:

In granting Mandamus [in Volkswagen II], the en banc Fifth Circuit found that the court’s denial of transfer was a clear abuse of discretion because it (1) applied too strict of a standard to demonstrate transfer, (2) misconstrued the weight of the plaintiff’s choice of venue, (3) treated choice of venue as a §1404 factor, (4) misapplied the forum non conveniens factors, (5) disregarded Fifth Circuit precedent, including the 100-mile rule, and (6) glossed over the fact that not a single relevant factor favored the plaintiff’s chosen venue. Id. at 318. Because the district court’s errors here are essentially identical, we hold that TS Tech has demonstrated a clear and indisputable right to a writ.


It remains to be seen how quickly and how often defendants sued in the Eastern District of Texas will respond to the Federal Circuit’s grant of TS Tech’s writ petition. It also remains to be seen whether other patentee’s will heed the Federal Circuit’s seeming call to have patent cases brought and tried in venues having perhaps more meaningful connections to the parties and the dispute.

Robert C. Scheinfeld is the head of the intellectual property group in the New York office of Baker Botts. Parker H. Bagley is a partner in the intellectual property group at Goodwin Procter.

Endnotes:

1. F.3d, 2008 WL 5397522 (C.A.Fed. (Tex.))