On the same day, the U.S. Court of Appeals for Federal Circuit issued two decisions on petitions for writ arising from motions to transfer venue out of the U.S. District Court for the Eastern District of Texas (ED Texas). In one case, In re Genentech,it granted the petition for writ, ordering the transfer of the case following a line of Fifth Circuit and Federal Circuit cases involving petitions on failed transfer motions filed in the ED Texas. See IPUpdate Vol. 12, No. 3; IP Update Vol. 12, No. 1; IP Update Vol. 11, No. 11.) In re Genentech, Misc. Docket No. 901 (Fed. Cir., May 22, 2009) (precedential order) (Linn, J.). In the other case, In re Volkswagen, it refused to grant the petition for writ. In re Volkswagen, Misc. Docket No. 897 (Fed. Cir., May 22, 2009) (precedential order) (Linn, J.).
In re Genentech
In a patent infringement suit brought in the ED Texas by Sanofi against Genentech and Biogen Idec (the petitioners), the Federal Circuit granted a petition for a writ of mandamus by petitioners to transfer venue of the suit out of the ED Texas to the U.S. District Court for the Northern District of California.
The Federal Circuit, in assessing the petition for writ, reviewed the district court’s denial of the petitioners’ request to transfer the suit for abuse of discretion, explaining that “use of mandamus to correct a patently erroneous denial of transfer pursuant to § 1404(a) has been approved under the rulings of the Fifth Circuit in appropriate circumstances.” To determine whether the district court’s decision was a patently erroneous denial of transfer, the Federal Circuit reviewed the “private” and “public” factors for determining forum non conveniens. The private interest factors, as explained by the Circuit, include the following: “(1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make a trial easy, expeditious and inexpensive.” The Circuit explained that the public interest factors include the following: “(1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflicts of laws or in the application of foreign law.”
Of note, the Federal Circuit found that “because a substantial number of material witnesses reside within the transferee venue and the state of California, and no witnesses reside within the Eastern District of Texas, the district court clearly erred in not determining this factor to weigh substantially in favor of transfer.” The Federal Circuit also explained that Genentech is headquartered within the Northern District of California, Biogen Idec is headquartered in San Diego and that “Sanofi is a German corporation that will be traveling a great distance no matter which venue the case is tried in and will be only slightly more inconvenienced by the case being tried in California than in Texas.” Given their relative locations, the Federal Circuit noted that “the parties’ convenience factor favored transfer, and not only slightly.” The Federal Circuit explained that the Fifth Circuit’s “100-mile” rule, which factors inconvenience to witnesses directly proportional to the amount needed to travel beyond 100 miles, “should not be rigidly applied such that it creates the result presented here” because the “witnesses from Europe will be required to travel a significant distance no matter where they testify.”
Also weighing in favor of transfer, as explained by the Federal Circuit, were the availability of compulsory process, which wrote that “there is a substantial number of witnesses within the subpoena power of the Northern District of California and no witness who can be compelled to appear in the Eastern District of Texas.” Access to evidence also weighed in its decision, noting, “Keeping this case in the Eastern District of Texas will impose a significant and unnecessary burden on the petitioners to transport documents that would not be incurred if the case were to proceed in the Northern District of California. Furthermore, because the documents housed in Europe and Washington, D.C. will need to be transported in any event, it is only slightly more inconvenient or costly to require the transportation of those materials to California than Texas.”
In granting the writ, the Circuit concluded, “[b]ecause the petitioners have met their burden of establishing that the district court clearly abused its discretion in denying transfer of venue to the Northern District of California and because we determine that mandamus is appropriate in this case, we grant the petition for a writ of mandamus.”
In re Volkswagen
Although named the same as the seminal October 2008 Fifth Circuit case, which transferred venue of a case on a petition for writ (See IP Update, Vol. 11, No 11), the present case arises from a patent infringement dispute in the ED Texas. MHL Tek, LLC (MHL) is a small Texas company operated out of its offices in Rochester Hills, Michigan. MHL filed first and second suits in the ED Texas against a total of 30 foreign and U.S. automobile companies, including Volkswagen. A third suit was filed by Volkswagen, seeking a declaratory judgment, in the Eastern District of Michigan. The third suit was transferred to the ED Texas to avoid wasting judicial resources and the risk of inconsistent rulings on the same patents. Volkswagen moved to transfer venue of the first suit from the ED of Texas to Michigan and, upon denial by the ED of Texas, petitioned the Federal Circuit for a writ to transfer venue.
The Court acknowledged that the “public” and “private” factors for determining forum non conveniens when assessing whether the burden of demonstrating the need to transfer was met. In this case, the Court found that “the existence of multiple lawsuits involving the same issues is a paramount consideration when determining whether a transfer is in the interest of justice.” In refusing to grant the writ, the Court further explained “[a]lthough these cases may not involve precisely the same issues, there will be significant overlap and a familiarity with the patents could preserve time and resources. Because the district court’s decision is based on the rational argument that judicial economy is served by having the same district court try the cases involving the same patents, mandamus is inappropriate under our precedents.”
Practice Note: Under the framework established by the Fifth Circuit’s Volkswagen case and the Federal Circuit’s TS Tech case (See IP Update, Vol. 12, No. 1), the Genentech case enumerates the forum non conveniens public and private interest factors that are considered when deciding petitions for writ to transfer cases. Plaintiffs filing suit in the ED Texas that involve parties with headquarters located outside, and perhaps far from, the district; no witnesses within the district; and no evidence located within the district may find themselves defending challenges to venue before the Federal Circuit.
The fact that the Federal Circuit stated that it is only slightly more inconvenient to relocate evidence from Washington, D.C. to California than to Texas seems to suggest that the Federal Circuit may be disinclined to give much weight to the accessibility of evidence factor if the evidence is not located in the ED Texas. The same may also be true, in future cases, for witnesses. It seems that the Federal Circuit is taking the position that if a witness has to travel a significant distance in the first place, increasing that distance to travel to another venue will not be a great inconvenience, and consequently, should not carry much weight in the venue transfer determination. Although Genentech is limited to inventors traveling from Europe, the case raises the question whether someone traveling from Washington, D.C. or New York would be only slightly more inconvenienced traveling to California than to Texas.
Transfer motions may still be denied, as in the Volkswagen case, where the district court’s rationale of judicial economy was upheld by the Federal Circuit, where the patent owners has established that the existence of multiple, related lawsuits in the ED Texas is a “paramount consideration when determining whether a transfer is in the interest of justice.”