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Apple Convinces Fed. Cir. to Kick Patent Suit Out of Texas (1)

Nov. 9, 2020, 6:57 PM; Updated: Nov. 9, 2020, 10:56 PM

Apple Inc. will face a patent infringement suit in its home district in California after the Federal Circuit ordered the Western District of Texas to transfer the case.

Apple filed a petition for mandamus asking the U.S. Court of Appeals for the Federal Circuit to overturn Judge Alan Albright’s decision refusing to send Uniloc 2017 LLC’s patent infringement suit against it to what Apple considers a more convenient court.

The Federal Circuit granted the petition. “We conclude that Apple has demonstrated that the district court clearly abused its discretion in denying transfer,” the divided court said in a precedential order.

“This decision further confirms that the Federal Circuit is keeping a close eye on what’s happening in the Western District,” according to Joshua Landau, patent counsel at the Computer and Communications Industry Association, which filed an amicus brief in support of Apple.

The sole judge of the U.S. District Court for the Western District of Texas’ Waco Division, Albright has created a new patent litigation hot spot in the two years he’s been on the bench.

“The Federal Circuit’s opinion appears to be the strongest rebuke that they have given Judge Albright related to transfer motions,” patent litigator Douglas Bridges of Capital Legal Group LLC in Washington said. “This order will likely affect how Judge Albright considers transfer motions going forward.”

‘Blistering Dissent’

Judge Kimberly A. Moore dissented from the Federal Circuit’s opinion. “I am concerned that the majority’s blatant disregard for the district court’s thorough fact findings and for our role in a petition for mandamus will invite further petitions based almost entirely on ad hominem attacks on esteemed jurists similar to those Apple wages here,” she said.

The majority called that a “baseless and counterproductive statement.”

“If anything, the fact that our order completely ignores what the dissent calls ‘ad hominem attacks’ will discourage future litigants from wasting precious briefing space on such statements,” the court said.

Moore’s “blistering dissent” could be a sign that the full court will need to rehear the case to resolve the transfer issue, Bridges said in an email.

Several Legal Errors

Uniloc sued Apple in the Western District of Texas, alleging the software download functionality in a range of Apple products infringes U.S. Patent No. 6,467,088 on a system to control software updates. Apple moved to transfer the case to the Northern District of California, where it is headquartered and where its says relevant witnesses and documents are located.

The Federal Circuit faulted the trial court for denying the transfer motion, finding several legal errors in its analysis. The lower court “erred by failing to meaningfully consider the wealth of important information in NDCA,” and “gave too much significance to the fact that the inventors and patent prosecutor live closer to WDTX than NDCA,” it said. Also, the district court “misapplied the law to the facts of this case in concluding that judicial economy weighed against transfer because NDCA has more pending cases than WDTX,” the Federal Circuit said.

The appeals court also said the trial court wrongly “barreled ahead” on the merits before ruling on Apple’s transfer motion. “Once a party files a transfer motion, disposition of that motion should take top priority in the case,” it said.

But mandamus jurisdiction isn’t “an invitation for us to criticize the way our district court colleagues generally manage their dockets,” Moore said in her dissent. “The majority’s criticism amounts merely to a disagreement with the district court’s weighing of its thorough fact findings,” she said.

‘Cumulative Effect’

The recent string of orders from the Federal Circuit could lead Albright and parties arguing before him to change their practices.

In July, the Federal Circuit granted Adobe Inc.'s mandamus petition to send a case out of the Western District. The appeals court rejected Albright’s reliance on his alleged ability to move the case faster than the Northern District of California could.

In October, the Federal Circuit said Albright had misapplied the law in keeping an infringement case against Nitro Fluids LLC, but stopped short of ordering him to transfer it to Nitro’s preferred district.

“I don’t know if this order specifically will affect Judge Albright’s approach, but I think the cumulative impact of repeatedly being reversed by the Federal Circuit is likely to eventually have some effect,” Landau said in an email.

He expects that defendants will rely on arguments analogous to those that have been successful at the Federal Circuit. Plaintiffs are likely to shift to new reasons that transfer isn’t appropriate, which Albright might adopt, he said.

Chief Judge Sharon Prost wrote the majority opinion, joined by Judge Todd M. Hughes.

Orrick, Herrington & Sutcliffe LLP represented Apple. The Davis Firm PC in Longview, Texas, represented Uniloc.

The case is In re Apple Inc., Fed. Cir., No. 20-135, precedential order 11/9/20.

(Updated with comments.)

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editors responsible for this story: Melissa B. Robinson at mrobinson@bloomberglaw.com, Keith Perine at kperine@bloomberglaw.com

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