The U.S. Court of Appeals for Federal Circuit recently granted a petition by Hoffman-LaRoche for a writ of mandamus to transfer a patent infringement suit from the U.S. District Court for the Eastern District of Texas, finding that the district court had abused its discretion in denying a transfer under 28 U.S.C. §1404(a). In re Hoffmann-La Roche Inc., Roche Labs. Inc., Roche Colorado Corp., and Trimeris, Inc., Misc. Docket No. 911 (Fed. Cir., Dec. 2, 2009) (Gajarsa, J.).
In the 1990s, the defendants developed and tested a possible therapy for HIV infection called Fuzeon. That activity occurred in an area covered by the U.S. District Court for the Eastern District of North Carolina. The relevant documents and records for the development and testing are still located in that district.
The plaintiffs, Novartis Vaccines and Diagnostics, Inc., which are headquartered in California, sued for patent infringement in the Eastern District of Texas. After the parties exchanged their initial disclosures, the defendants moved to transfer venue.
The district court denied the motion finding that it was a “decentralized” case with witnesses and documents located in various places around the country, so a transfer would just shift inconvenience from some to others. Hoffmann-La Roche appealed.
The Federal Circuit reversed, finding a strong local interest in resolving the dispute in the Eastern District of North Carolina given that the development and testing of the accused product occurred there. It also noted that four non-party witnesses resided within 100 miles of the Eastern District of North Carolina (so they were within the subpoena power of the court for both deposition and trial). Those witnesses, however, submitted declarations saying they would not attend trial in Texas. Finally, the Court noted that the Eastern District of North Carolina has a less congested docket and would be able to resolve the dispute more quickly.
Significantly, the Federal Circuit found no connection between the case and the Eastern District of Texas, except that the plaintiff transferred its documents relating to conception and reduction to practice of the patented invention to the Eastern District of Texas in anticipation of litigation. The Court called this an attempt to manipulate venue. The Court also found that the district court lent too much weight to the presence of one witness in Houston, Texas, more than 100 miles away from the Eastern District of Texas. The presence of this witness in Texas meant that the witness could be compelled to attend trial in North Carolina, but not necessarily compelled for deposition. While the Court agreed that it is important to consider the ability of the court to compel witnesses for both deposition and trial, referred to as “absolute subpoena power,” the Court noted that the district court neglected to consider that the Eastern District of North Carolina does have absolute subpoena power over at least four non-party witnesses. Accordingly, the Court stated that the district court should have considered this factor in favor of venue transfer to North Carolina.
Practice Note: For venue purposes, carefully consider the location of the development of the accused product, as well as the location of the party and non-party witnesses. Transferring documents to the forum of choice may be looked at as a counterproductive attempt to manipulate venue.