CAFC Continues Its Censure of Albright on Transfer Analyses

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Friday directed Judge Alan Albright’s Waco Division of the U.S. District Court for the Western District of Texas to transfer a case brought by CPC Patent Technologies PTY Ltd against Apple to the Northern District of California. The CAFC said the district court erred in weighing the convenience of the witnesses factor as only slightly favoring transfer, noting that the court has historically rejected the view that this factor should be based solely on the distance the witness would have to travel.

The district court found that, even though seven potential witnesses resided in Northern California, CPC had identified two witnesses it may wish to call in Austin, Texas, and one Apple witness in Florida, who would find it “about twice as inconvenient’ to attend trial in the Northern District of California than in the Western District of Texas,’” since Texas is halfway between Florida and California. The CAFC said it has repeatedly spurned the idea that “the convenience to the witnesses should be weighed purely on the basis of the distance the witnesses would be required to travel, even though they would have to be away from home for an extended period whether or not the case was transferred.” The employee will be burdened with travel either way, the appellate court noted.

The CAFC also found that the district court erred in its conclusion that the compulsory process factor weighed strongly against transfer based on the Texas court’s ability to compel testimony of a third-party manufacturer of an accused product—in this case, the “Mac Pro.” That finding was based on an incorrect assumption that the Mac Pro was an accused product, but it was the “MacBook Pro” that was accused, and that product was not manufactured in Austin.

As to the local interest factor, the district court found that it weighed in favor of neither forum, but failed to provide support for that conclusion, said the CAFC.

The district court also cited “Apple’s ‘thousands of employees in Austin,’” and “the fact that ‘advertising and sale of the accused products occurs in WDTX.” However, the CAFC said “those activities are immaterial to the local interest analysis in this case,” noting that “what is required is that there be ‘significant connections between a particular venue and the events that gave rise to a suit.’”

The CAFC also said that the “access to sources of proof” factor should have weighed in favor of transfer rather than neutral because “’working files, electronic documents, and any hard copy documents concerning the Accused Features reside on local computers and/or servers either located in or around’ the Northern District of California, the Czech Republic, and Florida, where Apple’s employees who are knowledgeable about the design and development of those features work.” The district court said this factor was neutral because Apple has the ability to  access its own electronic documents from its Austin offices, but the CAFC said even though Apple might be able to give employees in Austin “the proper credentials to access the information from Apple’s offices in Austin…. ‘[t]he district court should have compared the ease of access in the Western District of Texas relative to the ease of access in the Northern District of California.’”

In closing, the CAFC again also rejected the argument made by Albright’s court in several previous cases that the “court congestion factor” favors denial of transfer. “We have held that when other relevant factors weigh in favor of transfer or are neutral, ‘then the speed of the transferee district court should not alone outweigh all of those other factors,’” said the court.