On December 29, 2008 the U.S. Court of Appeals for the Federal Circuit (“CAFC”) granted our clients’ Petition forWrit ofMandamus ordering the U.S. District Court for the Eastern District ofTexas (“ED Texas”) to transfer the case to the U.S. District Court for the Southern District of Ohio (“SD Ohio”) in a decision that could significantly impact the number of patent cases that are filed in and transferred from the EDTexas.
Our clients are the defendants in the case, TS Tech USA Corporation (“TST USA”), TS Tech North America, Inc. (“TST NA”) and TS Tech Canada, Inc. (“TST Canada”) (collectively, TS Tech). TS Tech is an automotive parts manufacturer and supplier which specializes in automotive seating products. TS Tech is a major supplier of automotive seating to Honda. TST USA and TS Tech NA both are based in Reynoldsburg, Ohio (which is near Columbus in the SD Ohio), whileTST Canada is based in Ontario, Canada. TS Tech does not make or sell any products in Texas and does not have any offices in Texas. Rather, TS Tech sells its automotive seating products to Honda in Ohio and Canada, and then Honda incorporates these products into Honda automobiles that are sold throughout the United States.
TS Tech was sued for patent infringement by Lear Corporation (“Lear”), another major automotive parts manufacturer and supplier which is based in Michigan, in the ED Texas in September 2007, alleging infringement of one its patents directed to a pivotal headrest mechanism for automobile seats (Lear v. TS Tech USA Corp., et al., Civil Action No. 2:07-cv-406 (TJW)). In December 2007, TS Tech filed a motion to transfer the case to the SD Ohio, arguing that the SD Ohio was a far more convenient venue to try the case because none of the parties had any meaningful connections to the ED Texas, the physical and documentary evidence was located mainly in the SD Ohio, and the key witnesses all lived in Ohio, Michigan and Canada, at locations hundreds of miles closer to the SD Ohio than to the ED Texas. Lear opposed the motion, and the ED Texas (Judge Ward) denied TS Tech’s motion on September 10, 2008.
Exactly one month later, on October 10, 2008, the U.S. Court of Appeals for the Fifth Circuit (which includes the EDTexas) issued an en banc decision granting a Petition forWrit ofMandamus ordering the transfer of a product liability case from the EDTexas, In reVolkswagen of America, Inc., 545 F.3d 304 (5th Cir. 2008) “Volkswagen II”, holding that the ED Texas (i.e., Judge Ward - the same judge in our case) clearly abused its discretion in denying the defendant’s motion to transfer venue in that case. Since the district court’s analysis in that case was essentially the same as the analysis in our case, TS Tech filed on November 12, 2008 a Petition forWrit ofMandamus with the CAFC (which handles all patent appeals) requesting that the CAFC order the ED Texas to transfer our case to the SD Ohio, in which we relied heavily on the Fifth Circuit’s decision in the Volkswagen II case. On December 29th, the CAFC granted TS Tech’s petition, holding that because the district court’s errors in our case were essentially identical to the errors in the Volkswagen II case, TS Tech demonstrated a “clear and indisputable right to a writ.”
The CAFC’s holding in TS Tech is especially important to defendants in patent cases in which none of the parties is located in the ED Texas or has any significant connections with the ED Texas, such as in patent cases where the only connection to the ED Texas is the sales of the accused infringing products there. Thus, we wanted to let you know that if you are sued for patent infringement in the ED Texas (which has a reputation as a plaintiff-friendly court in patent cases) under similar circumstances, you may be able to have your case transferred to a more convenient court based on the CAFC’s decision in the TS Tech case and the Fifth Circuit’s decision in the Volkswagen II case.