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‘Clear Pathway’ Out of Waco Seen Emerging for Patent Defendants

Sept. 15, 2021, 9:01 AM

A trail of unhappy defendants from Waco, Texas, to the patent appeals court in Washington is starting to build a blueprint for companies that want to get cases moved out of the nation’s fledgling patent-dispute hotbed.

Judge Alan Albright has been reluctant to transfer patent cases in the three years he’s been the district court judge in Waco, denying almost 80% of requests from defendants who argue another district is more convenient, well above average in patent suits.

At the same time, Albright has transformed his U.S. District Court for the Western District of Texas courtroom from one rarely involved in patent cases to a national epicenter, fielding almost 800 new patent lawsuits last year alone.

The U.S. Court of Appeals for the Federal Circuit has taken notice and entertained requests that it order a transfer out of Waco in ways not typically seen, according to both legal experts and an analysis of data from patent cases filed nationwide.

“There very much is this ongoing dialogue between Judge Albright and the Federal Circuit about venue,” said Emma Frank, an attorney at Wolf Greenfield & Sacks PC in Boston.

That dialogue could be changing the perceptions of companies that want out of West Texas but questioned whether it was worth the effort to ask. With more guidance, and a framework companies can use to argue for transfer, attorneys expect Albright—who last year fielded more than 20% of all new patent cases filed nationally—will be dealing with even more transfer requests.

“There’s a clear pathway to success with these motions now if you have the right facts working for you,” Frank said.

Patent Interest

Albright, a former patent litigator, took the bench in the Western District of Texas in September 2018. He quickly turned Waco into a magnet for patent cases. The judge has been open about his interest in attracting patent cases, and has put in place a series of rules designed to move the cases along quickly.

“What I was hoping to have here was a docket where both sides felt I could be incredibly fair because I’d represented both sides for 20 years and I understood the issues from both sides’ perspectives,” Albright said in an interview.

“That was the goal when I got on the bench,” he added. “I did not ever perceive I would have the docket that I have today.”

Still, organizations like the Computer & Communications Industry Association, a tech lobbying group, argue it has been difficult to get cases transferred to another court. They believe that has fueled demand for Albright’s court.

Through the end of June, the judge denied 29 of 37 contested requests to transfer patent suits out of the Western District of Texas and to another court that the defendant argued was more convenient, a study by Temple University and American University law professors found. The grant rate of transfer motions in patent suits nationally is around 50%, the Temple professor, Paul Gugliuzza, said.

Albright has publicly said he takes motions to transfer seriously and tries to be as fair as possible. Some attorneys suggest the judge is moving toward a normalization point, and still developing his practice.

But Albright’s acknowledged interest in patent cases shouldn’t be overlooked, Gugliuzza said. Last year, the judge told the Waco Tribune-Herald he thought Waco was a “perfect place to try and establish a serious venue for sophisticated patent litigation.”

“You can’t say, ‘Hey, file your patent cases in my courtroom’ and then grant all the transfer motions away from your court,” Gugliuzza said.

Federal Circuit Awareness

In a 19-month span beginning in February 2020, the Federal Circuit issued almost 50 orders on mandamus petitions. More than half were from cases originating in Albright’s court.

Six times the Federal Circuit granted the “extraordinary relief” of mandamus and told Albright to transfer a patent suit to a more convenient court. The appeals court has in some other cases chided Albright for not deciding transfer requests faster.

Legal scholars see similarities between the Federal Circuit’s interest in the Western District of Texas and the way it handled the neighboring Eastern District of Texas years ago, when the patent docket in that district was heating up.

Before 2008, the Federal Circuit had never granted mandamus to overturn a transfer decision, Gugliuzza observed in a 2012 law review article. Over the next several years, the court issued a series of orders directing cases transferred from Eastern Texas.

To date, the Federal Circuit has granted mandamus and ordered transfer based on convenience over two dozen times, a Bloomberg Law analysis shows. All but two of those orders have involved cases coming from the two Texas districts.

“One thing we can infer is that when patent cases start accumulating in particular district courts, and particular district courts are making an effort to attract those patent cases, the Federal Circuit is aware of what’s going on,” Gugliuzza said.

Changing Practices

Attorneys say Albright has responded to the Federal Circuit’s feedback.

After the judge took heat for dragging his feet on transfer requests, he issued a standing order that said he would act “promptly” on such motions and decide them before moving into the substance of a case. The Federal Circuit has acknowledged the order in subsequent mandamus requests.

Albright’s response to Federal Circuit directions is also reflected in the substance of his decisions, attorneys say.

One thing the Federal Circuit has looked at is inconvenience for some witnesses in traveling to West Texas. It also has cautioned against relying too much on an ability to set a fast time to trial. The judge has started shifting course, attorneys said.

“The court is paying very close attention to what the Federal Circuit is saying and we’ve already seen some of those rulings reflected in the court’s transfer orders,” said Syed Fareed, an attorney at Baker Botts LLP in Austin, Texas.

Albright said he is doing everything he can to make sure he follows what the Federal Circuit wants, and decides transfer issues the way that “I think they’re teaching me to do it.”

“That doesn’t mean we’re always going to be right,” he said. “But there is nothing in what we’re doing where our attitude is anything other than complete respect for what the Federal Circuit thinks is appropriate.”

Cases Keep Coming

Patent owners probably won’t be discouraged from filing lawsuits in West Texas. Despite the Federal Circuit’s use of mandamus with East Texas, that district continued to be among patent owners’ favorite place until the Supreme Court in 2017 restricted where the suits can be filed.

But it may impact how many cases end up being sent elsewhere.

When the Federal Circuit first overturned one of Albright’s transfer rulings in July 2020, the judge had denied 13 of the 15 motions he saw. In the 11-months after that ruling, defendants’ success rate saw an uptick, with six of 22 requests granted, according to data Gugliuzza and American University’s Jonas Anderson collected.

Other appeals court opinions, including a November ruling instructing a suit against Apple Inc. be sent to the Northern District of California, have put more meat on the legal framework for transfer requests, attorneys say.

“I think there have been enough cases on these sorts of issues to give you the proper framework to use when you’re filing one of these motions and arguing one of these motions,” Frank said. At the same time, “Judge Albright’s also been given a framework of how he has to explain his rationale in opinions.”

“I think that’s going to tighten up his decisions if they do go up on mandamus,” Frank said.

— With assistance from Perry Cooper.

To contact the reporter on this story: Matthew Bultman in New York at mbultman@correspondent.bloomberglaw.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Renee Schoof at rschoof@bloombergindustry.com

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