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Patent Lawyers Bemoan Lack of Binding Guidance on Waco Transfers

July 8, 2022, 8:47 AM

The lack of formal Federal Circuit guidance on when patent cases can remain in Judge Alan Albright’s West Texas courtroom poses challenges for attorneys seeking predictable strategies for keeping high-stakes suits in Waco, attorneys say.

Albright’s court is one of the most patent-heavy venues in the country, with a reputation for being friendly to patent owners and quick in deciding disputes. The high concentration—and Albright’s tendency to balk at transferring patent cases to other courts— drew scrutiny from Congress and US Supreme Court Chief Justice John Roberts, who requested a report reviewing the rules that led to the flock of filings in Waco.

While the US Court of Appeals for the Federal Circuit grants requests to force transfers into new trial venues more than any other federal court of appeals, only a handful of those decisions set binding precedent, according to new research from Professors Jonas Anderson of American University, Paul R. Gugliuzza of Temple University, and Jason Rantanen of the University of Iowa. For more than a decade, the Federal Circuit issued only four precedential denials of mandamus petitions involving transfer, compared with 19 precedential grants.

For Albright specifically, the Federal Circuit has never upheld one of his transfer decisions in a precedential decision, according to Gugliuzza. Because neither Albright nor the Federal Circuit are bound by any of the nonprecedential decisions, he said, attorneys face a “tricky” situation where they are aware of facts that may lean toward a likely transfer or a denial, but still face uncertainty because there’s so little binding law on the issue.

“As a whole, it starts to distort perceptions of case law—and potentially the law itself—if you’ve got a lot of decisions that are going one way, but none of them are actually precedential. Then the precedent doesn’t actually reflect what the law is in practice,” Gugliuzza said. “It opens up the potential to be a little bit selective about which cases you rely on and feel bound by, whether as an arguing lawyer or as a judge.”

Value of Venue

The Federal Circuit issues the most orders on transfer of venue mandamus proceedings because of the heavy patent activity in East and West Texas, the professors said. The uptick started in 2008, with most requests trying to move cases out of the US District Court for the Eastern District of Texas, which had become a popular venue for patent trolls to file infringement suits.

The transfer requests died down in East Texas after a 2017 Supreme Court decision that tightened venue requirements in patent cases. The focus then shifted to the recently-sworn-in Albright in the Western District of Texas.

Albright has shown a reluctance—which has waned in the past few months—to transfer patent cases out of his court. That led to a flurry of requests to force moves out of Waco, mostly from large tech companies like Apple Inc. and Google LLC looking to ensure a home-court advantage in the Northern District of California.

“Whether or not they feel like they’re in a patentee-friendly or defendant-friendly venue, it’s always easier, especially for a big company like Apple, when you’re on your home turf,” said Emma Frank, an attorney at Wolf, Greenfield & Sacks PC. “If it’s something you think is going to go the distance, maybe you want to make sure that you’re somewhere where your jury pool is going to potentially be more friendly toward you.”

Venue can make the difference in patent cases, attorneys said. Some have equated a transfer to San Francisco as a patent death sentence, making the venue battle just as, if not more, important than trial.

“A big reason they’re filing in patent cases and not in other cases is it really matters,” Anderson said. “If you’re doing a product liability case, it makes a difference, but not enough to challenge that decision on appeal.”

Little Guidance

One trend that’s emerged from the Federal Circuit’s venue cases has been a focus on the location of witnesses and relevant documents, particularly those of accused infringers. That can give defendants the advantage, said Wendy Verlander of Verlander LLP. One key can be whether the company’s employees in Texas are actually relevant to the patent case.

In April, the Federal Circuit found that Albright had “clearly abused” his discretion in keeping a patent infringement suit against Apple in Waco, citing the significant number of Apple’s witnesses who reside near San Francisco as a valid reason to move the case.

It’s challenging to navigate the issue without precedential guidance, Verlander said, pointing to the need for attorneys and district court judges to have guidance in what constitutes abuse of discretion.

“I’m certain it has to be quite frustrating for them to have diligently gone through the analysis, only to have the Federal Circuit tell them that they abused their discretion,” she said.

Looking Forward

Even as Albright has been more willing to grant transfer motions over the last six months, bigger changes would need to happen to end the rush of mandamus petitions altogether, Gugliuzza said—like the Supreme Court’s 2017 decision that curbed patent filings in East Texas.

“As long as a thousand patent cases a year are going to be filed in his courtroom, some of the defendants are going to try to get out, they’re not all going to win, and some of them are going to petition to the Federal Circuit,” Gugliuzza said. “Unless there are dramatic changes to the law of venue or the way in which judges are assigned to these cases, I don’t think venue mandamus is going to disappear from the Federal Circuit.”

Recent changes from the US Patent and Trademark Office may result in some defendants trying their luck in Waco, Frank said. Albright’s reputation for aggressive trial schedules scared off accused infringers because of the agency’s NHK-Fintiv rule, which gave the Patent Trial and Appeal Board discretion to refuse to review a patent if there’s ongoing parallel litigation in district court.

With new guidance curbing that practice, though, some could see the benefits of staying in Albright’s court given his experience with patent law.

Even if it’s not the most convenient court, most of the tech companies have offices in or near the Western District, Frank said.

“Sometimes Albright’s going to get it right, sometimes Albright’s going to get it wrong,” Frank said. “But it’s time to start asking the question, ‘What is it like to be in Albright’s court as a defendant?’”

To contact the reporter on this story: Samantha Handler in Washington at shandler@bloombergindustry.com

To contact the editors responsible for this story: Adam M. Taylor at ataylor@bloombergindustry.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com