Expert Commentary

Looking To Transfer Venue

A recent Federal Circuit opinion by Judge Jimmie Reyna reminds us that there must be sufficient evidence to justify a party's request for specific relief. Regarding an attempt to resurrect a failed motion to transfer, on February 27, 2014, the Federal Circuit denied a writ of mandamus to the U.S. District Court for the Eastern District of Texas because "Apple failed to submit sufficient evidence to suggest that transfer was appropriate." In re Apple, Inc., 743 F.3d 1377 (E.D. Tex. 2014).


Intellectual Property
July 2014

In February 2012, Core Wireless sued Apple for patent infringement in the Eastern District of Texas. Apple later moved to transfer the case to the Northern District of California. Under Fifth Circuit law, a motion to transfer venue should be granted upon a showing that the transferee's venue of choice is "clearly more convenient" than the venue chosen by the plaintiff. In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008) (en banc). This analysis necessarily requires weighing certain "public" and "private" factors.

As alleged for Texas, Core Wireless, a Luxembourg company with one employee, is a wholly owned subsidiary of MOSAID, a Canadian corporation. Core Wireless owns Core Wireless USA, which is a Texas corporation created in September 2011. Core Wireless USA has six employees and shares office space with MOSAID in Plano, Texas.

As alleged for California, Apple is a California corporation with a principal place of business in Cupertino, California. The accused products contain baseband processing chips, which are at the heart of the patent dispute. Qualcomm Incorporated, based in San Diego, and Intel Corporation, based in Santa Clara, California, supply the chips to Apple for inclusion in the accused devices.

At the trial level, the district court denied the transfer motion, finding "that Apple ha[d] not met its burden of establishing that the Northern District of California is 'clearly more convenient'" than the Eastern District of Texas. Core Wireless Licensing, S.A.R.L. v. Apple, Inc., 2013 U.S. Dist. LEXIS 24922 (E.D. Tex. Feb. 22, 2013). The court emphasized the lack of specificity in Apple's assertions as to why the transfer factors favored that location. Apple later moved to supplement the record. The district court denied that motion, noting that "[t]here is no indication that all of this relevant information was not accessible at the time Apple had filed its transfer motion." Apple then filed a motion for reconsideration, which was later denied as well.

Following that interplay, Apple petitioned for a writ of mandamus directing the district court to vacate its orders on transfer.

Federal Circuit Opinion

In a 2–1 opinion, the Federal Circuit affirmed the direct court under the "clear abuse of discretion" standard. Judge Reyna authored the majority, while Judge Newman wrote the dissent.

According to Judge Reyna, "The district court examined the private and public interest factors but was stymied in its analysis by Apple's lack of evidence." In particular, the district could not sufficiently evaluate the convenience of witnesses "because of Apple's failure to identify willing witnesses who would need to travel to the Eastern District of Texas or any third-party witnesses not subject to the compulsory process of that court." Similarly, the court could not gage the ease of access to evidence because Apple proffered only "vague assertions" about "unknown" sources of information. And, while the local interest "slightly" favored California, the remaining public interest factors were a net-neutral.

Given this, to the majority, "[n]othing suggests the district court conducted an improper transfer analysis." The record was "general" and "sparse," without particularity. And, because Apple could not pinpoint specific facts, "Apple failed to submit sufficient evidence to suggest that transfer was appropriate." As a collateral matter, Judge Reyna further held that the trial court did not abuse its discretion by denying Apple's request to supplement the record because "there was no indication that Apple could not have submitted this information with its motion to transfer." In re Apple, Inc.

Judge Newman's dissent offered a different take on the record. From the outset, Judge Newman highlighted that Core Wireless USA maintained six employees in Plano, and no Core Wireless entity either "makes, uses, or sells the patented subject matter in Texas or elsewhere." In contrast, Apple has been headquartered in California since 1976 with its "primary research and development facilities" and "over 13,000 people" located in Cupertino, California. Additionally, "the research, design, and development of the accused products took place in Cupertino and ... virtually all Apple business documents and records relating to the research, design, development, marketing strategy, and product revenue for the accused products are located in or near Cupertino." Given this, Judge Newman concluded that "the writ of mandamus should issue to account for the extreme imbalance of convenience as between California and Texas."

Noting the disparity between Texas and California with respect to available witnesses and evidence, Judge Newman further noted that she was "struck by how heavily the local interest factor favors the Northern District of California." To Judge Newman, although Apple failed to pinpoint specific witnesses, the sheer raw numbers spoke for themselves in favor of transfer. In re Apple, Inc. (Newman, J., dissenting) (citing In re Genentech, 566 F.3d 1338 (Fed. Cir. 2009)).

Conclusion

While some issues and requests may seem like easy wins from the outset, presumptive victory can quickly erode without the necessary follow-through. In particular, motions with deferential standards require some degree of evidence no matter how appealing they may seem based on common sense alone. And, while Judge Newman's dissent may bring comfort that a different panel may reach a different outcome, why take the chance? Even with the most trivial of requests, the prudent course is to give the court every reason to accept your theory even when those theories may be evident because, as this case demonstrates, what is apparent to some may not be apparent to all.


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