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Federal Circuit May Have its Eye on West Texas Patent Hot Spot

July 31, 2020, 10:01 AM

A Federal Circuit venue order in a patent infringement case involving Adobe Inc. may signal that the court is recognizing the Western District of Texas is a magnet for such litigation.

The U.S. District Court for the Western District of Texas’s Waco Division has become a popular forum for patent litigation as technology companies have started opening offices in Austin. The division’s one judge, Alan D. Albright, has put rules in place to speed up such cases.

Albright’s alleged ability to handle cases faster than other courts can’t be the main reason for rejecting defendants’ attempts to move cases to more convenient forums, the U.S. Court of Appeals for the Federal Circuit said in its July 28 order.

The order “may influence future conduct by plaintiffs and defendants, and may make Judge Albright take a harder look at transfer motions next time,” Megan La Belle, intellectual property and procedure professor at Catholic University Law School, said.

‘Extreme Case’

The transfer denial in Adobe is an “extreme case,” La Belle said. Albright acknowledged that very little about the case connected it to Texas, and the inventor of the asserted patents is located in Adobe’s preferred forum, the Northern District of California.

But it provides an “important signal” that the Federal Circuit may clamp down on Albright for improperly denying transfer motions, she said.

Something similar happened with the Eastern District of Texas, an earlier patent hot spot. Two appellate transfer decisions favorable to defendants spurred more companies to try to move their cases out of the district, La Belle said.

“This may have a similar effect,” she said. And plaintiffs may realize they’ll need stronger arguments for keeping a case in Albright’s court.

The Federal Circuit has seen a large number of requests recently from companies challenging Albright’s decisions denying transfer.

That the court granted Adobe’s petition for mandamus on the venue issue is “extremely unusual,” Paul R. Gugliuzza, IP and civil procedure professor at Temple University Law School, said.

“Perhaps the court is starting to take notice of the large number of cases being filed in West Texas,” which are almost entirely filed by non-practicing entities, he said.

The Federal Circuit has denied mandamus in other similar cases. Apple Inc. is seeking full court review of Albright’s decision to keep a case filed against it by the University of New Mexico’s patent licensing arm.

‘Forum Selling’

Albright, a former patent litigator, has been open about his interest in attracting patent cases to his court since he took the bench in 2018.

“It seems like we have yet another federal district judge unapologetically engaging in forum selling,” Brian Scarpelli of ACT|The App Association, which represents app developers, said. “That’s deeply troubling to us.” ACT filed an amicus brief in support of Apple’s motion for en banc review.

Being a hot spot benefits judges, who get “more interesting, complicated, and high-profile cases,” La Belle said. But it also benefits the local community, businesses, and lawyers by bringing in more litigation activity.

Albright’s expertise and familiarity with patent law can lead to informed decisions. But patent owners may be drawn to his court as they were to the Eastern District of Texas, Scarpelli said.

The Eastern District has a reputation for being more favorable to patent holders than other courts in the country.

Many are uncomfortable with that kind of judge shopping, but at least historically judges were urged to give the plaintiffs’ choice of forum a lot of deference because they took the risk by suing, La Belle said.

It’s not that companies like Adobe and Apple want to be in a neutral venue, they want to be in a pro-defendant venue, she said.

“It’s really not inconvenient for Apple to litigate in the W.D. Tex.—it’s a huge company with endless resources,” LaBelle said.

But smaller companies, like ACT’s membership, don’t have “infinity money to spend on legal fees,” Scarpelli said.

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

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com

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