The Federal Circuit has now made precedential its earlier (November 8, 2010) order granting a mandamus petition from the denial of a motion to transfer venue out of the Eastern District of Texas. The Federal Circuit concluded the Western District of Washington was clearly more convenient and fair for trial. In re Microsoft Corp., Misc. Order 944, 2011 WL 30771 (Fed. Cir., Jan. 5, 2011) (per curiam).
The plaintiff, Allvoice Developments, filed suit in the U.S. District Court Eastern District of Texas alleging that Microsoft’s XP and Vista operating systems infringed a patent relating to speech recognition functionality. Microsoft moved to transfer and provided evidence that all of its relevant witnesses and documents were within the Western District of Washington.
Allvoice countered with evidence of non-party potential witnesses in New York, Massachusetts and Florida, as well as two businessmen within the Eastern District of Texas who had used the accused products but were not necessarily tied to the specifics of the lawsuit.
The district court denied the motion to transfer, finding that each forum had a local interest in the dispute, that the witnesses Allvoice identified would find Texas more convenient and that Allvoice had its documents within the Eastern District of Texas.
In reversing, the Federal Circuit found this case to be analogous, in many respects, to its earlier opinion in In re Genentech, (see IP Update,Vol. 12, No. 6). Here, the Federal Circuit rejected Allvoice’s “fallacious assumption” that the court must honor connections to a preferred forum, noting that the circumstances behind that connection can be of paramount importance. Although Allvoice was incorporated in Texas and maintained an office in Tyler, which is within the Eastern District of Texas, it did employ any individuals in that office (or anywhere in the United States); Allvoice was operated from the United Kingdom. Allvoice also incorporated in Texas just 16 days before it filed the lawsuit. The Federal Circuit reiterated the Supreme Court’s longstanding mandate that the purposes of jurisdictional and venue laws should not be frustrated by a party’s attempt at manipulation; it rejected Allvoice’s connection to East Texas as a construct for litigation.