## United States Court of Appeals for the Federal Circuit

Miscellaneous Docket No. 911

IN RE HOFFMANN-LA ROCHE INC., ROCHE LABORATORIES INC., ROCHE COLORADO CORP., and TRIMERIS, INC., Petitioners.

Stephen S. Rabinowitz , Fried, Frank, Harris, Shri ver & Jacobson LLP, of New York, New York, for petitioners Hoffmann-La Roche Inc., et al. With him on the petition was Randy C. Eisensmith

. Rachel Krevans , Morrison & Foerster LLP, of San Francisco, California, for respondent Novartis Vaccines and Diagnostics, Inc. With her on the response were Matthew I. Kreeger and Jason A. Crotty . Of counsel on the response were Samuel F. Baxter , McKool Smith, P.C., of Marshall, Texas; Rosemary T. Snider , of Dallas, Texas; and John F. Garvish II , of Austin, Texas. On Petition for Writ of Mandamus to the Un ited States District Court for the Eastern District of Texas Chief Judge David Folsom

## United States Court of Appeals for the Federal Circuit

Miscellaneous Docket No. 911

IN RE HOFFMANN-LA ROCHE INC., ROCHE LABORATORIES INC., ROCHE COLORADO CORP., and TRIMERIS, INC., Petitioners.

On Petition for Writ of Mandam us to the United States Dis trict Court for the Eastern District of Texas in case no. 2: 07-CV-507, Chief Judge David Folsom.

ON PETITION FOR WRIT OF MANDAMUS

Before LOURIE, FRIEDMAN, and GAJARSA, Circuit Judges

. GAJARSA, Circuit Judge

.

O R D E R The petitioners, Hoffmann-La Roche In c., Roche Laboratories Inc., Roche Colorado Corp. and Trimeris, Inc., seek a wr it of mandamus directing the United States District Court for the Eastern Di strict of Texas to vacate its orders denying petitioners’ motion to transfer venue, and to direct the court to transfer the case to the United States District Court for the Easter n District of North Carolina. Novartis Vaccines and Diagnostics, Inc. (“Novartis”) opposes. The c ourt holds that the district court clearly abused its discretion in denying petitioners ’ motion to transfer venue pursuant to 28 U.S.C. § 1404(a). Accordingl y, we grant petitioner’s petit ion for a writ of mandamus.Misc. No. 911 2 I. BACKGROUND This petition stems from a patent infringement suit brought by Novartis against the makers of Fuzeon®, a co mmercial HIV inhibitor drug. Scientists at Duke Medical Center identified Fuzeon’s 36-amino acid pepti de composition. In 1993, those scientists formed Trimeris to develop the peptide into a possible therapy for HIV infection. Fuzeon was developed and tested at Trimeris’ labs in Morrisville, North Carolina where relevant books and documents are currently maintained. Trimeris partnered with Roche to hand le Fuzeon’s complex manufacturing process and bring the drug to market. The ac tive pharmaceutical ingredient for Fuzeon is manufactured by Roche at its Colorado facilities. The active ingredient is further processed by either Hoffmann-La Roche Inc. in Michigan or Hoffmann-La Roche Ltd. in Switzerland. The drug is then packaged by Hoffmann-La Roche in New Jersey and marketed nationwide by Hoffmann-La-Roche’ s wholly owned subsidiary, Roche Laboratories, Inc. Novartis, a company headquartered in Californ ia, brought this su it in the Eastern District of Texas, alleging t hat Fuzeon infringed its patent. After the parties submitted their initial disclosures ident ifying potential witne sses, the petitioners moved to transfer the suit to the Eastern District of North Carolina, contending th at there were no witnesses or any sources of proof within 100 m iles of the Eastern District of Texas. The petitioners further arg ued that the bulk of the key docum entary evidence was present in the Eastern District of North Carolina and that a trial in the Eastern District of North Carolina would be far more convenient for Trimeris’ employee wit nesses and four non-Misc. No. 911 3 employee witnesses who resi de within 100 mile s of the district and al l of whom said that their attendance in the Eastern District of Texas would be inconvenient and unlikely. Novartis opposed the motion, contending that the Eastern Dis trict of Texas was an appropriate venue because the parties, source s of proof, and witnesses were spread throughout the country. In their initial disclosures and motion papers, the parties identified eighteen po tential non-party witnesses: four from North Carolina, five from California, three from Maryland, one from Missouri, two from Alabama, two from Europe, and one, Dr. Nancy Cha ng, from Houston, Texas. The parties also identified seven potential party witnesses: three from North Carolina, three from New Jersey, and one from Colorado. Novartis also argued that the Eastern Dis trict of Texas was convenient because 75,000 pages of documents relating to the patent were in the Eastern District of Texas. These documents were sent electronically to Novartis’s local counsel in the Eastern District of Texas. The district court for the Eastern District of Texas denied the petitioners’ transfer motion. The district court st ated that this was a “decentra lized” case given the various locations of the potential wit nesses and that transfer would merely shift inconveniences from those witnesses closer to the Eastern District of Nort h Carolina to those witnesses closer to the Eastern District of Texas, i.e., witnesses in Ca lifornia, Missouri, Colorado, and Texas. The district cour t further stated that transfe r was unnecessary because only four non-party witnesses resided in or near t he transferee venue, which the district court did not find to be a substantial number of witnesses. Regarding the ability to secure attendance of witnesses, the district court explained that transf er was not favored because it could subpoena Dr. Chang, who resides in Texas, to attend a trial. Next,Misc. No. 911 4 regarding the sources of proof factor, the court found that transfer was not favored because the sources of proof were spread around the country and Novartis had transferred 75,000 pages of docum ents in electronic format to the district. Finally, the district court stated that neither venue had a localized inte rest in this matter. II. DISCUSSION If the petitioners are correct that the Eastern District of North Carolina is indeed clearly more convenient, it would be an inadequate remedy to require that they wait until final judgment to raise that i ssue in this court on appeal. In re TS Tech USA Corp. , 551 .3d 1315, 1322 (Fed. Cir. 2008) . Denial of transfer may be challenged by the filing of a petition for a writ of mandamus if the petitioner demonstrates a “clear and indisputable” right to relief. Allied Chem. Corp. v. Daiflon, Inc. , 449 U.S. 33, 35 (1980); see also In re Volkswagen of Am., Inc. , 545 F.3d 304 (5th Cir. 20 08) (en banc) (granting mandamus and directing the district court to transfer to a clearly more convenient forum). It is well established that under the law of the United States Cour t of Appeals for the Fifth Circuit, which governs here, TS Tech , 551 F.3d at 1319, mandamus may issue only upon a showing that the facts and circ umstances underlying the district court’s application of the pu blic and private forum non conveniens factors 1 do not rationally

1 The “private” interest factors include: (1) the relative ease of access to sources of proof; (2) the availability of com pulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make a trial easy, expeditious and inexpensive. Piper Aircraft Co. v. Reyno , 454 U.S. 235, 241 n.6 (1981). The “public” interest fact ors to be considered are: (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3 ) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflicts of law or in the application of foreign law. Volkswagen , 545 F.3d at 315.Misc. No. 911 5 support the district court’s decision, i.e., t he district court reached a “patently erroneous” result or committed a “cl ear” abuse of discretion. Volkswagen , 545 F.3d at 312. As in Volkswagen , TS Tech , and our most recent decision, In re Genentech, Inc. , 566 F.3d 1338 (Fed. Cir. 2009) , there is a stark contrast in relevance, convenience, and fairness between the two venues. The a ccused drug was devel oped and tested within the Eastern District of North Carolina and do cuments and sources of proof remain there despite Trimeris now having moved its headquar ters to the Middle District of North Carolina. Moreover, the Easter n District of North Carolina’s local interest in this case remains strong because the cause of action calls into question the work and reputation of several individuals residing in or ne ar that district and who presumably conduct business in that community. In addition, there are at least four non-party witnesses residing within 100 miles of the Eastern Distric t of North Carolina, all of whom could be compelled for both deposition a nd trial testimony if the case were transferred to the district. Furthermore, the district’s le ss congested docket suggests that the Eastern District of North Carolina may be able to resolve this dispute more quickly. Meanwhile, there appears to be no connection between this case and the Eastern District of Texas except that in anticipation of this litigation, Novartis’ counsel in California converted into electronic fo rmat 75,000 pages of doc uments demonstrating conception and reduction to practice and transfe rred them to the offi ces of its litigation counsel in Texas. But, if not for this liti gation, it appears that the documents would have remained a source of proof in California. Thus, the assertion that these documents areMisc. No. 911 6 “Texas” documents is a fiction which app ears to be have been created to manipulate the propriety of venue. 2 This type of tactic was clearly counseled against in Van Dusen v. Barrack , 376 U.S. 612 (1964). There, the Su preme Court explained that Section 1404(a) “should be construed to prevent parties who are opposed to a change of venue from defeating a transfer which, but for their own deliberate acts or omissions, would be proper, convenient and just.” Id. at 625. A plaintiff’s atte mpts to manipulate venue in anticipation of litigation or a motion to transfer falls squarely within these prohibited activities. The district court’s contrary position here has no legally rational basis and prevents § 1404(a) from carryi ng “out its design to protect litigants, witnesses and the public against unnecessary inconv enience and expense. . . .” Continental Grain Co. v. The FBL-585 , 364 U.S. 19, 27 (1960). The district court also gave too much we ight to its ability to compel Dr. Chang’s attendance at trial. 3 Rule 45 of the Federal Rules of Civil Procedure provides the

2 The Supreme Court has not limited the § 1404(a) analysis to only postfiling events. See Stewart Org., Inc. v. Ricoh Corp. , 487 U.S. 22, 29 (1988) (permitting the district court to consider the effect of a forum-selecti on clause in a contract and the parties relative bargaining power); but see id. at 35 (SCALIA, J., Dissenting) (asserting that the statute’s language looks only to t he present and future; "the Court inevitably imports, in my view without ad equate textual foundation, a new retrospective element into the court's deliberations, requiring exami nation of what the facts were concerning, among other things, the bargaining power of t he parties and the presence or absence of overreaching at the time the contract was made").

3 The parties dispute the likelihood that Dr. Chang and the North Carolina witnesses will testify at trial. Because each witness has been identified as having relevant and material information relating to th is suit, we agree with the district court that the convenience of all five witnesses should be assessed. See Genentech , 566 F.3d at 1343-44. We also note that in its reconsideration order, t he district court stated that “this Court may have subpoena power over all or some of t he four ‘non-party’ witnesses in North Carolina.” That statement was, however, based entirely on Novartis’s ownMisc. No. 911 7 district court with authority to compel Dr . Chang’s attendance at tr ial, even though she does not reside within 100 mile s of the Eastern District of Texas, because she is a resident of Texas. Fed. R. Civ. P. 45(c)(3)(A)(ii). Yet, because Dr. Chang resides more than 100 miles outside the Eastern District of Te xas, the district court cannot compel her attendance at a deposition within the district and any such subpoena issued to her is subject to a motion to quash. Fe d. R. Civ. P. 45(c)(3)(A)(ii). See also Volkswagen , 545 F.3d at 316 (finding that this factor favor ed transfer when the plaintiff’s chosen venue lacks deposition subpoena power and any trial subpoenas woul d be subject to motions to quash). Citing Volkswagen , 545 F.3d at 316, the di strict court stated th at the Fifth Circuit weighs this factor “heaviest in favor of transfer” only when a transferee venue has “absolute subpoena power.“ The district c ourt, citing one of its earlier opinions, held that there is “absolute s ubpoena power“ only when “all relev ant and material non-party witnesses reside within the su bpoena power of a part icular court.“ That position is inconsistent with Volkswagen which defined “absolute subpoena power“ as subpoena power “for both depositions and trial.“ Id. ; see also Genentech , 566 F.3d at 1345 (transferee venue’s subpoena power over a substantial number of witnesses favors transfer). In discussing its subpoena pow er, the district court did not assess convenience and fairness to Dr. Chang and the other potential witnesses. As the Fifth Circuit explained in Volkswagen , “[t]hat a district court can deny any motions to quash does not speculation and Novartis has failed to prov ide any proof below or in its mandamus papers supporting its argument that these witnesses are party witnesses or contractually obligated to attend trial in Texas. In fact, all four North Carolina non-party witnesses declared that they woul d likely not attend trial if it were held in Texas.Misc. No. 911 8 address concerns regarding the convenience of parties and witnesses.” 545 F.3d at 316. The district court can only compel one potent ial non-party witness to testify at trial and can only do so by inconveniencing her in having to travel mo re than 100 miles to attend the trial. In contrast , the Eastern District of Nort h Carolina can compel at least four potential non-party witne sses for both trial and deposit ion and can do so without similar inconvenience to those witnesses. Because the Eastern District of Texas does not have absolute subpoena power over Dr. C hang, i.e., it does not have the subpoena power to require that Dr. Chang attend bot h a trial and a deposition, and because the Eastern District of North Carolina does have absolute subpoena power over at least four non-party witnesses, the district court should have considered this factor in favor of transfer. See Genentech , 566 F.3d at 1345. The district court also disregarded Volkswagen and Genentech in holding that the Eastern District of North Carolina had no more of a local interest in deciding this matter than the Eastern District of Texas. Wh ile the sale of an accused product offered nationwide does not give rise to a subs tantial interest in any single venue, TS Tech , 551 F.3d at 1321, if there are si gnificant connections between a particular venue and the events that gave rise to a suit, this factor should be weighed in that venue’s favor. Genentech , 566 F.3d at 1347; Volkswagen , 545 F.3d at 317-18. Th e Eastern District of North Carolina’s interest in th is matter is self-evident. Meanw hile, it is undisputed that this case has no relevant factual connection to the Eastern Distri ct of Texas. The district court ignored this sign ificant contrast, reasoning that “where a number of private interest factors weigh heavily in one directi on, that venue has a slightly greater local interest,” but “[w]here, however , the factors do not weigh heavily in one direction of [sic]Misc. No. 911 9 the other, no one venue has more or less a meaningful connecti on to the case than any other.” By relying exclusively on how other forum non conveniens factors weigh, rather than assessing the locale’s connection to t he cause of action, the district court essentially rendered this factor meaningless. Therefore, bec ause the Eastern District of North Carolina has a meaningfu l local interest in adjudi cating the dispute and no meaningful connection exists with the Eastern District of Texas, this factor also favors transfer. Accordingly, IT IS ORDERED THAT: The petition is granted and the district court is directed to promptly transfer the case to the Eastern District of North Carolina.

FOR THE COURT

December 2, 2009 /s/ Jan Horbaly Date Jan Horbaly Clerk

cc: Stephen S. Rabinowitz, Esq. Rachel Krevans, Esq. Judge, U.S. District Court for the Eastern District of Texas Clerk, U.S. District Court for the Eastern District of Texas