Recent Federal Circuit decisions in In re Genentech and In re TS Tech have made it more difficult to maintain venue in the Eastern District of Texas, leading some litigators to question whether this district will remain one of the leading venues for patent infringement cases. Judge Davis’s recent decision in Centre One v. Vonage Holdings Corp., et al., 2009 U.S. Dist. LEXIS 69683 (E.D. Tex. Aug. 10, 2009), confirms, however, that the Eastern District will continue to be an important venue for many infringement cases, including those having multiple defendants spread across the United States.
Centre One filed a patent infringement suit in the Eastern District of Texas against Vonage Holdings Corp., Vonage America, Inc. (collectively “Vonage”), Deltathree, Inc., Verizon Communications Inc., and roughly a dozen regional Verizon entities, including Verizon Southwest, which does business in Texas. Vonage and Deltathree filed early defense motions requesting that the case be transferred to the District of New Jersey, where Vonage maintains its principal place of business and close to Deltathree’s home office in New York City. Judge Davis denied the motions because the transferee court in New Jersey was not clearly more convenient than the Eastern District of Texas, a result stemming in large measure from the defendants’ nationwide distribution.
Fifth Circuit law, which governs procedural matters such as venue in Eastern District of Texas patent cases, sets forth a detailed framework that courts must use to weigh motions to transfer. First, the court must determine whether the case could have originally been filed in the district court to which transfer is requested. If this threshold inquiry is satisfied, the court must examine four “private” factors and four “public” factors to determine whether transfer should be granted. The enumerated private factors are:
- The relative ease of access to sources of proof;
- The availability of compulsory process to secure the attendance of witnesses;
- The cost of attendance for willing witnesses; and
- All other practical problems that make trial of a case easy, expeditious and inexpensive.
Centre One, 2009 U.S. Dist. LEXIS 69683 at *17. The public factors are:
- The administrative difficulties flowing from court congestion;
- The local interest in having localized interests decided at home;
- The familiarity of the forum with the law that will govern the case; and
- The avoidance of unnecessary problems of conflict of laws or in application of foreign laws.
Id. See also In re Genentech, 566 F.3d 1338 (Fed. Cir. 2009); In re TS Tech USA Corp., 551 F.3d 1313 (Fed. Cir. 2009). Significantly, under the Fifth Circuit’s formulation, the plaintiff’s choice of forum is not a separate factor for analysis. Rather, the plaintiff’s choice of venue contributes to the significant burden imposed on the defendant to demonstrate that the transference venue is clearly more convenient that the venue chosen by the plaintiff. Id. at **17-18.
The parties in Centre One did not contest that the case could have been filed in New Jersey, and the Court proceeded to review each of the enumerated public and private factors. The widespread location of the parties, their evidence and the witnesses were clearly the most significant factors leading the Court to deny transfer. The parties’ documentary evidence was spread “across the United States,” so transfer to New Jersey did not ease the access to sources of proof. The witnesses were not concentrated in or around New Jersey, but were also located around the country and, due to the participation of Verizon Southwest in the case, many of the witnesses resided in Texas. Consequently, the moving parties did not show that it would be more convenient for willing witnesses to testify at trial in New Jersey than in the Eastern District of Texas. Id. at **18-21. Additionally, since there were parties located in both the transferee and transferor courts, both venues had a local interest in presiding over the case. As such, the “local interest” public factor weighed against transfer. Id. at 25. The remaining public and private factors under the Fifth Circuit’s analysis were largely neutral, although the Court noted that the “court congestion” factor weighed against transfer, since the District of New Jersey has an average time to trial that is 20 months longer than the Eastern District of Texas. Id. at **20, 22-24, 25-26.
Centre One clearly supports retention of venue in the Eastern District of Texas in patent cases having geographically diverse defendants that are spread across the United States and where at least one party has a presence in the venue. The litigation was “a truly national dispute,” and the moving defendants failed to show that it was clearly more convenient to have the case filed in New Jersey. Id. at **19-20. Thus, “[w]hile this Court [was] not prepared to find that nationwide suits . . . must be litigated in a centralized venue, the facts of this case do suggest that the transferee venue is not more convenient for many involved.” Id. at *26 (quoting Novartis Vaccines & Diagnostics, Inc. v. Hoffman LaRoche Inc., 597 F.Supp.2d 706, 713 (E.D. Tex. 2009)(Fulsom, J.). This conclusion teaches that, although courts in the Eastern District of Texas will carefully review the facts of patent infringement cases filed in their district to determine whether venue should be transferred, they will continue to retain jurisdiction over cases appropriately filed there.