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Two More Federal Circuit Venue Opinions - In re Acer; In re Vistaprint

By Michael C. Smith

Assuming the Federal Circuit doesn't deliver any more the rest of the month, 2010 will end with one more venue mandamus ruling (six) than 2009 (five), with a pair of December 2010 rulings which bring's the year's total to three granted and three denied.

In the first, In re Acer, which came out a couple of weeks ago, the Federal Circuit granted a petition and ordered an Eastern District case sent to the Northern District of California, noting that with the sole exception of Dell, all the U.S. defendants were in California.  (This likely came as a bit of a surprise to defendant Microsoft, which had previously been thought to be located in Washington).

In the second, In re Vistaprint, which just came out today, plaintiff Colorquick opposed the petition for mandamus filed by the defendant seeking an order requiring Judge Leonard Davis to transfer the case from Tyler to Massachusetts.  The district court denied the motion, weighing considerations of convenience in favor of transfer, the Federal Circuit noted "but ultimately concluding that such considerations did not outweigh the importance of judicial economy. Specifically, the court noted that it had substantial experience with the patent-in-suit based on prior litigation involving the plaintiff, which included a hearing and lengthy opinion construing various claim terms. The court further noted that there was also a second, co-pending case before the court be-tween the plaintiff and another defendant involving the same patent-in-suit, pertaining to the same underlying technology, and involving similar accused services."

The issue in this mandamus turned on the weight the trial court gave to the judicial economy considerations, and the Federal Circuit concluded that it could not say that the weight Judge Davis gave amounted to a "patently erroneously result".  It wrote that "even if trying these two related cases before the same court may not involve the same defendants and accused products, it does not appear on its face erroneous to conclude that maintaining these two cases before the same court may be beneficial from the standpoint of judicial resources." 

This left the petitioners with only the argument that the overall balance of considerations was improper, "essentially urg[ing] that it is always improper for a district court to deny transfer based on judicial economy when all of the convenience factors clearly favor transfer."  But the Federal Circuit disagreed that the cited cases mandated such a per se rule, holding that "Volkswagen I, TS Tech, Genentech, Hoffman, and Nintendo did not present the court with a showing of judicial economy comparable to that in this case. . . [i]n contrast, as noted above, here the district court correctly held a denial of transfer would produce gains in judicial economy."

"Our reluctance to interfere is not merely a formality," the Court wrote, "but rather a long-standing recognition that a trial judge has a superior opportunity to familiarize himself or herself with the nature of the case and the probable testimony at trial, and ultimately is better able to dispose of these motions. . . For those reasons, we find unpersuasive the petitioners? argument that their proposed bright-line rule favoring convenience factors would bring about more uniformity and fairness."  The Court noted that there was no evidence of manipulation of venue in this case, and emphasized that "courts have consistently held that judicial economy plays a paramount role in trying to maintain an orderly, effective, administration of justice."

After disposing of that argument, the Court found there was actually one more, and that was whether the trial court improperly balanced judicial economy against convenience in this specific case.  Noting that a clear abuse of discretion here would be a permissible ground for mandamus, the Court did not find there to be one, noting that the prior and co-pending litigation provided a "substantial justification" for maintaining suit in the Eastern District of Texas.  In addition, the Court noted that, unlike Acer, where all the defendants save one (well, assuming Microsoft doesn't count) were in California, here no defendant party was actually located in the transferee forum, although some witnesses and sources of proof were.  The Court concluded:

In sum, there are cases where to hold a trial court to a meaningful application of the § 1404(a) factors presents only one correct outcome. In those cases, mandamus may be appropriate. A case such as this, however, shows that a meaningful application of the factors often creates a reasonable range of choice. Under such circumstances, it is entirely within the district court?s discretion to conclude that in a given case the § 1404(a) factors of public interest or judicial economy can be of ?paramount consideration,? Volkswagen II, 566 F.3d at 1351, and as long as there is plausible support of record for that conclusion we will not second guess such a determination, even if the convenience factors call for a different result.

A footnote provided some useful dicta, which read:

Our holding today does not mean that, once a patent is litigated in a particular venue the patent owner will necessarily have a free pass to maintain all future litigation involving that patent in that venue. However, where, as here, the trial court performed a detailed analysis explaining that it is very familiar with the only asserted patent and the related technology, and where there is a co-pending litigation before the trial court involving the same patent-in-suit, and pertaining to the same underlying technology and accusing similar services, we cannot say the trial court clearly abused its discretion in denying transfer.

As noted above, this brings the venue mandamus opinions I'm aware of from the Federal Circuit for the year to six, by my count, with five in 2009, two in 2008, and one in 2006 (Network-1 Sec. Solutions, Inc. v. D-Link Corp., 433 F. Supp. 2d 795, 800, mandamus denied, 183 Fed. Appx. 967 (Fed. Cir. 2006), which is a total of seven opinions granting and seven denying.

Full post as published by Eastern District of Texas Federal Court Practice on December 15, 2010 (boomark / email).