On Dec. 2, 2011, the U.S. Court of Appeals for the Federal Circuit issued its decision in In re Link_A_Media Devices, which granted a petition for a writ of mandamus directing the U.S. District Court for the District of Delaware to transfer a patent case.1 Although the Federal Circuit had granted similar mandamus petitions in 10 previous cases, all 10 of those successful petitions sought transfer from the Eastern District of Texas.2 Because it was the first time that the Federal Circuit overturned a venue decision from a jurisdiction other than the Eastern District of Texas, Link_A_Media prompted considerable speculation that the District of Delaware would become more amenable to transfer motions and a less desirable forum for patentees to file infringement actions.3

Such speculation appears, at least thus far, to have been largely unfounded. Although the transfer rate for patent cases filed in the District of Delaware has increased slightly since Link_A_Media, the judges in that jurisdiction have taken a relatively narrow view of the Federal Circuit’s decision. The opinions issued by the District of Delaware in the past year suggest that unless the facts supporting a transfer motion closely track those in Link_A_Media, the court is no more likely today to transfer a case than it was before that case was decided.

Background on ‘Link_A_Media’

At the district court level, defendant Link_A_Media (LAMD), a Delaware corporation, moved pursuant to 28 U.S.C. §1404(a) to transfer the patent infringement case filed against it by plaintiff Marvell International, a holding company based in Bermuda, to the Northern District of California. Nearly all of LAMD’s 130 employees and the inventors of Marvell’s asserted patents worked in the Northern District of California. Judge Sue L. Robinson denied LAMD’s transfer motion, citing LAMD’s state of incorporation as a “pivotal connection” to Delaware, and giving “paramount consideration” to Marvell’s choice to file suit in Delaware.

LAMD appealed the district court’s decision to the Federal Circuit. Because transfer is a matter of procedural discretion, and does not involve substantive patent issues, the Federal Circuit applies the law of the regional circuit (in this case, the Third Circuit) when reviewing a petition for mandamus transfer. Transfer jurisprudence in the Third Circuit is governed by the Jumara factors, a non-exhaustive list of public and private considerations including:

(1) plaintiff’s choice of forum;

(2) defendant’s forum preference;

(3) where the claim arose;

(4) convenience of the parties as indicated by their relative physical and financial condition;

(5) convenience of the witnesses;

(6) location of books and records;

(7) enforceability of the judgment;

(8) practical considerations that could make the trial easy, expeditious or inexpensive;

(9) court congestion;

(10) the local interest in deciding local controversies at home;

(11) the public policies of the forums; and

(12) the familiarity of the trial judge with the applicable state law in diversity cases.

In granting LAMD’s petition, the Federal Circuit found that the district court gave undue weight to the plaintiff’s choice of forum (particularly given that the plaintiff had not sued on its “home turf”) and to the fact that the defendant was incorporated in Delaware, and failed to weigh the other Jumara factors. The Federal Circuit therefore ordered that the case be transferred to the Northern District of California.

Transfer in the District of Delaware

Before Link_A_Media, roughly one-third of the motions to transfer patent cases from the District of Delaware were granted.4 In the year since the Federal Circuit’s decision, the judges of the District of Delaware have cited Link_A_Media in 19 written decisions resolving 20 motions to transfer. All seven of the District of Delaware judges have issued at least one decision resolving a motion to transfer a patent case, although a plurality of those decisions have come from Judge Richard G. Andrews. Eight of the 20 motions to transfer were granted, for a transfer rate of 40 percent—which represents a marginal increase to the pre- Link_A_Media rate.

Although the increase in the transfer rate may suggest that the Delaware court has shifted its approach to transfer motions in patent cases, two facts belie such a suggestion. First, several of the court’s judges have adopted a restrictive view of Link_A_Media that is largely limited to the facts of that case. Second, nearly all of the eight cases that were transferred have involved some other “plus” factor—such as the application of the first-filed rule or lack of jurisdiction—that falls outside the standard Jumara calculus.

Interpreting the Case

Three of the district judges in Delaware have directly interpreted the scope of Link_A_Media: Judges Andrews, Sue L. Robinson, and Leonard P. Stark.5 Exemplary post-Link_A_Media decisions from each of these judges are discussed below.

Of the District of Delaware judges, Andrews has resolved the most motions to transfer, denying four such motions and granting three. Andrews has also most explicitly articulated his views on Link_A_Media, generally characterizing that case in one of two ways. According to his first formulation:6

The conclusion I would draw from Link_A_Media is that when a plaintiff sues a defendant in District A and the plaintiff, the defendant, and all the potential witnesses and evidence are located in District B, and there is no other valid reason for denying a request for transfer to District B, it is an abuse of discretion not to grant the transfer.

His second formulation is similarly narrow:

I would characterize [Link_A_Media] as generally standing for the proposition that when the parties, all the witnesses and all the evidence are in one distant jurisdiction, and the only connection to Delaware is that it is the state of incorporation of the defendant, and there is no other reason for the suit to be in Delaware, the suit must be transferred, upon timely request, to the distant jurisdiction.7

Given the narrow view that Andrews has taken, it is unsurprising that the three cases he has transferred involved only the most tenuous connection to Delaware. In one of those cases, the only factor weighing against transfer was that Delaware was the plaintiff’s choice of forum—the parties were otherwise completely unconnected to Delaware.8 And in the other two cases, the only connection to Delaware was that a party was incorporated there.9 These decisions suggest that when a plaintiff chooses a forum other than its principal place of business, and where the only connection to Delaware is that a party is incorporated there, those facts will likely be insufficient—standing alone—for Andrews to keep the case in Delaware.

Robinson has also taken a narrow view of Link_A_Media. The clearest articulation of her interpretation of the post-Link_A_Media landscape is found in Helicos Biosciences v. Illumina.10 While acknowledging that “clearly the Federal Circuit expects an analysis of all the Jumara factors in connection with any transfer decision issued by this court,” Robinson noted:

It does not take an intellectual leap of faith to suggest that, when the Third Circuit identified the [Jumara] factors…, [it] did not necessarily have in mind the kind of business disputes that are characteristic of today’s patent litigation, that is, where the parties are national and international companies competing aggressively for market share with the will, sophistication and resources dedicated to resolving their business disputes in court.

Moreover, Robinson situated the Jumara decision within a broader “historical continuum” characterized by two attributes: (1) a defendant’s state of incorporation was always recognized as a legitimate forum for bringing suit; and (2) a plaintiff was generally afforded the privilege of litigating in the forum of its choosing. Robinson’s post-Link_A_Media decisions signal that the defendant’s state of incorporation will remain an important part of her transfer jurisprudence, and that the Jumara factors will be viewed in light of the strong presumption in favor of the plaintiff’s chosen forum.

Stark provided “general observations” about the impact of Link_A_Media and the historical context for the transfer analysis in Intellectual Ventures I v. Altera. In denying a motion to transfer the Altera case to the Northern District of California, Stark first noted that unless a defendant is “truly regional,” such that it operates “exclusively in a region that does not include Delaware” then “transfer is often inappropriate.”11 Consistent with Robinson’s view of the realities of modern business practices and their impact on litigation, Stark noted that a proponent of transfer that operates on a national or international scale has generally been required to “prove that litigating in Delaware would pose a unique or unusual burden on [its] operations.” Stark also highlighted the unique facts of Link_A_Media, noting that the plaintiff in that case “was not a Delaware entity and, as far as can be discerned from the opinions in the case, had no connection to Delaware whatsoever.” In Altera, Stark analyzed each of the Jumara factors, concluding that three weighed against transfer, four weighed in favor of transfer and the remainder were neutral. Although more factors weighed in favor of transfer than weighed against, Stark nonetheless concluded that “Defendants have failed to satisfy their burden of showing that the balance of convenience factors and interests of justice weigh strongly in favor of transfer.”

Stark’s decision was appealed to the Federal Circuit, where the defendants sought a writ of mandamus compelling transfer to the Northern District of California.12 The Federal Circuit denied the petition and distinguished Altera from Link_A_Media in two respects: (1) the district court opinion included a detailed and thorough discussion of the relevant public and private interest factors; and (2) all the parties in Altera were incorporated in Delaware, and at least some witnesses would find Delaware more convenient than litigating in California. The Federal Circuit’s Altera decision reaffirms that considerable discretion still rests with the district court, and that the state of incorporation for the parties is certainly not irrelevant when considering transfer.

Moreover, this decision suggests that Link_A_Media was more about ensuring that a transfer decision in a patent case is based on a full consideration of public and private interests, rather than resulting from a more general concern that the transfer rate from the District of Delaware was too low.

Transfer After ‘Link_A_Media’

As noted above, 40 percent of the motions to transfer patent cases from the District of Delaware have been granted since the Federal Circuit’s decision in Link_A_Media. However, nearly all of those decisions involved the weighing of some factor that does not fit neatly under the private and public issues to be weighed under Jumara. These “plus” factors have included the following:

• Application of the First-Filed Rule. In at least three cases, transfer was sought to a jurisdiction where related, pending litigation had been filed before the Delaware action that was the subject of the motion to transfer.13 Under the Federal Circuit’s “first-filed rule,” which is designed to promote judicial efficiency and comity, the later-filed action (in these cases, the Delaware actions) should be dismissed, transferred, or otherwise enjoined in favor of the earlier action (in these cases, the actions that were previously pending in the transferee forums). Even pre-Link_A_Media, the judges in the District of Delaware frequently transferred cases pursuant to the first-filed rule. Thus, although the judges in each of these cases nonetheless undertook a Jumara analysis, considerations of judicial economy and convenience weighed strongly against the later-filed action.

• Lack of Personal Jurisdiction. In one of the cases that was transferred, Judge Jerome B. Simandle (sitting by designation) found that the Delaware court lacked personal jurisdiction over the defendants—in contrast to the transferee jurisdiction, which could properly exercise personal jurisdiction over the defendants.14

• Re-Transfer to Original Jurisdiction. Finally, Magistrate Judge Mary Pat Thygne was presented with an odd procedural posture in Meyers v. Heffernan.15 That action had been transferred sua sponte by the District of New Jersey, based on its assumption that the transferred case would then be referred to bankruptcy court in Delaware. However, the bankruptcy court found that it lacked jurisdiction, preventing referral of the case. Given that the rationale for transfer no longer applied, Thygne transferred the case back to New Jersey.

Conclusion

Although the transfer rate for patent cases filed in the District of Delaware has increased over the last year, it appears that Link_A_Media has not significantly increased the likelihood that a patent case will be transferred. As discussed above, the Delaware judges have varied in their approaches to the transfer analysis, with some placing more weight than others on the fact that a party is incorporated in Delaware. That said, the state of incorporation of both the plaintiffs and defendants will continue to be relevant in the transfer calculus. Moreover, all of the judges in the District of Delaware that have analyzed a transfer motion post- Link_A_Media have been cognizant of the need to consider the many factors outlined in Jumara. The Delaware judges have also focused on the nature of the transferee district—it is not enough that the parties have limited ties to Delaware; the transferee district must be clearly more convenient and/or more directly connected to the cause of action.

As the foregoing discussion indicates, defendants should not assume that the Delaware court will be more inclined to grant their motions for transfer after Link_A_Media. Thus, before investing time and resources in a motion to transfer a patent case from the District of Delaware, defendants should carefully analyze (1) all of the Jumara factors, (2) any potential “plus” factors (such as first-filed litigation), (3) the strength of the relative connection that potential transferee forums have to the parties and cause ozf action, and (4) the degree to which their case matches the factual circumstances of Link_A_Media. Unless defendants are able to fit their case directly within the Link_A_Media construct, or can point to a significant “plus” factor weighing in favor of transfer, a patent case brought in Delaware is likely to stay there.

Douglas R. Nemec is a partner, and Edward L. Tulin is an associate, at Skadden, Arps, Slate, Meagher & Flom, where both practice patent and technology litigation.

Endnotes:

1. 662 F.3d 1221,1222 (Fed. Cir. 2011).

2. See Paul R. Gugliuzza, “The New Federal Circuit Mandamus,” 45 Ind. L. Rev. 343, 376-90 (2012).

3. See, e.g., “Patent Litigation Alert: In re Link_A_Media Devices Corp.” (Dec. 6, 2011) (noting that Link_A_Media “has particular significance because many companies are incorporated in Delaware…and it now will be more difficult to maintain suits there against such companies that operate elsewhere”).

4. See, e.g., Alfred R. Fabricant, “Patent Litigation with Non-Practicing Entities: Strategies, Trends and Techniques” 20th Annual Fordham Intellectual Property Conference, at 5 (April 12, 2012). Of course, motions to transfer are filed in only a fraction of patent cases, so that the vast majority of patent cases filed in the District of Delaware are ultimately resolved there.

5. Although Chief Judge Gregory M. Sleet and Magistrate Judges Mary Pat Thygne and Christopher J. Burke, and Sherry R. Fallon have all dealt with transfer motions in the wake of Link_A_Media, those decisions have not characterized the scope of the case as directly as the other Delaware judges have done.

6. Wacoh v. Kionix, 845 F.Supp.2d 597, 605 (D. Del. 2012); accord Signal Tech v. Analog Devices, Civil Action No. 11–1073–RGA, 2012 WL 1134723, at *4 (D. Del. April 3, 2012).

7. Microsoft v. Geotag, 847 F.Supp.2d 675, 682 (D. Del. 2012); accord Robocast v. Apple, Civil Action Nos. 11–235–RGA, 10–1055–RGA, 2012 WL 628010, at *5 (D. Del. Feb. 24, 2012).

8. IpVenture v. Acer, Civil Action No. 11-588-RGA, 2012 WL 3016958, at *3-6 (D. Del. July 24, 2012).

9. Wacoh, 845 F.Supp.2d at 605; Signal Tech, 2012 WL 1134723, at *4.

10. Civ. No. 10-735-SLR, 2012 WL 1556390 (D. Del. May 3, 2012).

11. Intellectual Ventures I v. Altera, 842 F.Supp.2d 744, 751 (D. Del. 2012).

12. In re Altera, Misc. No. 121, 2012 WL 2951522, at *1-2 (Fed. Cir. July 20, 2012).

13. Ivoclar Vivadent AG v. 3M, Civil Action No. 11–1183–GMS–SRF, 2012 WL 2374657 (D. Del. June 22, 2012) (recommending transfer to the District of Minnesota after finding that the first-filed rule applied); Fuisz Pharma v. Theranos, Civil Action No. 11–1061–SLR–CJB, 2012 WL 1820642 (D. Del. May 18, 2012) (recommending transfer to the Northern District of California after finding that the first-filed rule applied); Mitek Sys. v. United Servs. Auto. Ass’n, Civil Action No. 12–462 GMS, 2012 WL 3777423 (D. Del. Aug. 30, 2012) (transferring case to the Western District of Texas after finding that the first-filed rule applied).

14. W.L. Gore & Assocs. v. AGA Medical, Civil No. 11–539 (JBS–KMW), 2012 WL 924978 (D. Del. March 19, 2012).

15. Meyers v. Heffernan, C.A. No. 10–212–MPT, 2012 WL 924978 (D. Del. March 29, 2012).