BLOOMBERG LAW

By Kelcee Griffis

Dec. 5, 2022, 5:18 AM

• Albright chides experts for one-sided venue-move probes
• Federal Circuit agreed thin discovery won’t win transfer

Defendants in patent-infringement lawsuits risk irking judges when they request a transfer to a different court but don’t provide a comprehensive look at the pros and cons of both the current and proposed venue—something at least one Big Tech company has gotten in trouble for recently.

Attorneys told Bloomberg Law that judges in busy patent courts like the Western District of Texas expect a party asking to move a suit to analyze the convenience of both the current and hoped-for venues, instead of simply listing the witnesses and documents available in one while largely ignoring the other. 

The stakes for venue decisions are high, as the court where a patent lawsuit is heard can directly influence the outcome of the case: Texas is seen as friendly to patent holders, while Big Tech defendants typically fare better in California.

District Judge Alan Albright dinged Apple in September for putting forward an “unreliable” and “evasive” expert to explain why Vivato Technologies’ patent-infringement case against it should be transferred from his court in Waco, Texas, to California. He contrasted that with the “exceptional” performance of Meta Platforms Inc. and Google LLC transfer experts in other disputes.

“You have to do a comparison with the venue you’re currently in,” said Emma Frank, an associate at IP firm Wolf, Greenfield & Sacks PC. “If you avoid doing that, you run the risk of not meeting your burden.”

Standard for Transfer

Albright’s Sept. 12 order singled out incomplete fact-finding by Apple financial manager Mark Rollins, saying he appeared to turn a blind eye to any evidence that could hurt Apple’s chances of moving the case to the Northern District of California. 

Rollins only spoke to five Apple employees involved in making 50 products related to the case, Albright said. In contrast, Google’s expert spent multiple days interviewing more than 20 people in a venue dispute involving four allegedly infringing products, the judge noted, and an expert for Meta “has demonstrated exceptional candor before this Court.” 

Parties looking to move a case typically must prove that the proposed venue is clearly more convenient, analyzing factors such as the availability of witnesses and documents and the extent of the parties’ business contacts in each place.

“You have to marshal pretty persuasive and voluminous evidence to satisfy that standard” for moving the case, said Paul Gugliuzza, an intellectual property law professor at Temple University.

Albright found that Google did just that in a different case, granting its transfer request to California in October. He determined its expert had completed a “credible but limited” investigation that uncovered at least some evidence weighing against the transfer. 

Albright appears eager to buck the conventional yet unspoken view that venue witnesses serve as mouthpieces for the attorneys who hired them, Gugliuzza noted. The judge is insisting on a more objective analysis of the venue factors and wants to see that the witness took inventory of both jurisdictions, he said.

“I think it is becoming a conversation point,” Gugliuzza said. “What’s happened in the Western District of Texas is relatively unprecedented.”

Frank suggested attorneys requesting transfers must make sure their venue witness “is knowledgeable about not only the good facts for your case, but also the bad facts for your case.”

The Federal Circuit Factor

Albright has been reluctant in the past to grant transfer requests, and he’s no stranger to clashes of opinion at the Federal Circuit, which has a penchant for overturning his transfer denial orders.

The appeals court, however, in November backed Albright’s reasoning that Cloudflare Inc.’s expert arguing for a Northern District of California move “failed to adequately investigate the responsibilities and duties of its employees in Austin.” The expert identified a single employee in Texas who had knowledge relevant to the case, the order said, but he also “admitted that he did not look into whether there are engineers in Austin that worked on the accused products.”

The Cloudflare ruling demonstrates that the appeals court is not willing to second-guess Albright’s credibility determinations, despite its track record of disagreeing with his application of venue law, Gugliuzza said.

Any kind of fact-driven argument in a transfer dispute at the Federal Circuit “is just not going to do it,” he said.

Lack of Standards, Consequences

Patent attorneys have long bemoaned the lack of binding standards regarding venue transfers. One pain point at the district level: It’s difficult to tell whether venue experts have correctly identified the documents and witnesses that will be important to the case.

In the Apple-Vivato case and two others, the Federal Circuit ruled that Albright’s court couldn’t force the parties to dig deeper into the facts of the case before he decided the venue question. The court specifically rejected Albright’s view that full discovery—rather than discovery limited to venue—would help the court make a more informed decision on the transfer motion.

“It just highlights the issue of not having any way to know if this information is correct or being supplied in good faith,” said Wendy Verlander, managing partner of boutique IP firm Verlander LLP.

Bad-faith venue disclosures can hurt the other party involved in the case, she noted. As it stands, parties typically don’t face consequences for stacking the deck in favor of one venue over another, opening the door for “a lot for gamesmanship,” she said.

“The way it’s been going, it just seems like there’s no sanction or penalty for disclosing witnesses and identifying documents that are never ultimately used in the case,” Verlander said.

“It would be nice for the courts to crack down on the venue disclosures.”

To contact the reporter on this story: Kelcee Griffis in Washington at kgriffis@bloombergindustry.com

To contact the editors responsible for this story: Tonia Moore at tmoore@bloombergindustry.com; Adam M. Taylor at ataylor@bloombergindustry.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com