“As in Samsung, Apple, and Juniper, the center of gravity for this infringement action is clearly Colorado, not Texas.”
In its latest rebuke of Judge Alan Albright’s approach to motions to transfer cases out of his court, the United States Court of Appeals for the Federal Circuit (CAFC) on October 21 granted DISH Network’s petition for a writ of mandamus challenging the denial of its motion to transfer a case filed by Broadband iTV (BBiTV) from the United States District Court for the Western District of Texas to the United States District Court for the District of Colorado.
In December of 2019, BBiTV filed suit accusing DISH’s set-up boxes and mobile device applications that provide video-on-demand functionality of infringing four of its patents. Pursuant to 28 U.S.C. § 1404(a), DISH moved to transfer the case to the District of Colorado.
The First Motion
In its initial motion, DISH argued that its employees’ knowledgeable about the accused functionality worked in its Colorado headquarters. Additionally, DISH pointed out that two of its former employees along with prior art witnesses could only be compelled to appear in the District of Colorado. Lastly, DISH noted that its offices in Austin, Texas had no connection to the infringement allegations.
On April 20, 2021, after analyzing the public and private interest factors that traditionally guide courts in transfer determinations, the district court denied the motion. In their denial, the Texas forum held that it could likely adjudicate the dispute quicker than their Colorado counterpart and that judicial economy concerns weighed against transfer since BBiTV had four co-pending cases that all turned on the same patents. The district court further concluded that all other factors were neutral.
On May 28, 2021, DISH petitioned the CAFC for a writ of mandamus that, if granted, would have directed the Texas court to grant its motion to transfer. In June of 2021, while DISH’s petition was pending, the CAFC issued a pair of decisions, Samsung, and Apple, that held that the district court erred in not granting motions to transfer in those cases. Despite the recognition of specific errors in the district court’s denial, on August 13, 2021, the CAFC denied DISH’s petition for a writ of mandamus. However, in their denial, the CAFC stated “we do not view issuance of mandamus as needed here because we are confident that the district court will reconsider its determination in light of the appropriate legal standard and precedent on its own.” In re DISH Network L.L.C., 856 F. App’x 310, 311(Fed.Cir. 2021).
Upon reconsideration, the district court conceded that the willing witness factor strongly favored transfer, but again denied the motion to transfer, holding that both forums had “significant connections” to the dispute. This decision prompted DISH to petition again for a writ of mandamus to compel the district court to grant their motion to transfer.
The Second Motion
The CAFC noted that their review of transfer rulings is governed by the applicable laws of the circuit in question, the Fifth Circuit. Citing In re Radmax, the CAFC recognized that Fifth Circuit law provides “that [if a] movant demonstrates that the transferee venue is more convenient” then the motion should be granted. In re Radmax, Ltd., 720 F.3d 285, 288 (5th Cir. 2013). The CAFC noted that while district courts enjoy broad discretion in making transfer determinations, their discretion is not boundless. Referencing In re Juniper Networks, the CAFC stated “[w]hen a court’s denial of a motion to transfer under section 1404(a) clearly contravenes governing legal standards, we have issued mandamus to overturn the denial of transfer. See In re Juniper Networks, Inc., No. 2021-160, F.4th, 2021 WL 4343309, at *7 (Fed. Cir. Sept. 24, 2021).
Turning to the writ of mandamus, the CAFC noted that for several reasons “[a]s in Samsung, Apple, and Juniper, the center of gravity for this infringement action is clearly Colorado, not Texas.” First, the CAFC took issue with the fact that the Texas court found the potential witness factor to be “probably the single most important factor in the transfer analysis,” and that this factor weighted in DISH’s favor, yet ruled against the transfer.
Sources of Proof
The CAFC also concluded that the district court erred in not weighing the sources of proof factor in favor of transfer. It was undisputed that DISH’s relevant documents were housed at its headquarters in Colorado and that no sources of proof were in Western Texas. The district court found that this factor was neutral because DISH’s documents were stored electronically, making their physical location unimportant. Despite that fact, the CAFC found the district court’s ruling on this issue to be an error. Quoting In re Juniper, the CAFC reasoned that “[w]hile electronic storage of documents makes them more widely accessible than was true in the past, the fact that documents can often be accessed remotely does not render the sources-of-proof factor irrelevant.” Juniper, 2021 WL 4343309 at 6.
Additionally, the CAFC determined that the district court erred in not weighing the compulsory process factor in favor of transfer. DISH identified both prior-art witnesses and former employees that live in the District of Colorado. Conversely, neither party identified a non-party witness located in Texas. The district court relied in part on the fact that neither party had shown that any witnesses were unlikely to testify. However, the CAFC reasoned that when there is no indication that a non-party witness is willing, the witness is presumed to be unwilling.
The court also found the application of the local interest factor improper. The district court found this factor to be neutral, noting that DISH’s remanufacturing plant and call center are in the Western District of Texas. However, the district court also acknowledged that none of the relevant employees or documents were alleged to be in Texas. Therefore, the CAFC concluded that this factor favored transfer because any connection to Texas was insubstantial compared to Colorado’s.
The CAFC ruled that the practical problems factor did not weigh “significantly against transfer” as the district court posited. The district court based their determination on the existence of co-pending cases that turned on similar issues. However, while the CAFC recognized this is worth considering, it said it did not automatically tip the balance of this factor in the non-movant’s favor.
Finally, the CAFC explained that the district court’s court congestion factor analysis was improper. In determining that this factor weighed against transfer, the district court reasoned that it could try the case fastest, thereby reducing court congestion. However, the CAFC reasoned that a court’s general ability to set a fast-paced schedule is not relevant to this factor. The CAFC continued to explain that such “garden variety delay” stemming from transfer should not be taken into consideration when ruling on a motion to transfer under Section 1404(a).
Accordingly, the CAFC stated that this case was a “close cousin” of their prior decisions in Apple, Juniper, and Samsung. Similarly to those cases, several of the most important factors weighed in favor of transfer and therefore the CAFC granted the petition for mandamus relief.