# United States **Court of Appeals**  **for the Federal Circuit**

______________________ IN RE TOYOTA MOTOR CORPORATION, TOYOTA MOTOR SALES, U.S.A., INC., TOYOTA MOTOR ENGINEERING & MANUFACTURING NORTH AMERICA, INC., TOYOT A MOTOR MANUFACTURING KENTUC KY, INC., TOYOTA MOTOR MANUFACTURING, INDIANA, INC., AND GULF STATES TOYOTA, INC.,

______________________

2014

- 113

______________________
On Petition for Writ of Mandamus to the United States District Court for the Eastern District of Texas in No s

. 6:12

- cv

- 404

- MHS, 6:12

- cv

- 405

- MHS, 6:12

- cv

- 406

- MHS, 6:12

- cv

- 408

- MHS, 6:12

- cv

- 409

- MHS and 6:12

- cv

410

- MHS, Judge Michael H. Schneider.

______________________
ON MOTION

______________________

T HOMAS R. M AKIN , Keynon & Keynon LLP, of New York, New York, for petitioner. With him on the petition were G EORGE E. B ADENOCH , J OHN F LOCK , and A. A NTONY P FEFFER

.

A LISA A. L IPSKI , Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C. of Houston, Texas, for respondent. With her on the response was J AMIE A LAN A YCOCK

.

______________________IN RE TOYOTA MOTOR CORP ORATION 2

Before P ROST , O’M ALLEY , and T ARANTO , Circuit Judges.

T ARANTO , Circuit Judge.

O R D E R
In this patent

- infringement case, the United States District Court for the Eastern District of Texas entered an order denying a motion to sever the claims against the Gulf States defendant from the c laims against all the remaining defendants ( we refer to the latter collectively

as “Toyota”)

, to transfer the resulting separate action against Toyota to the United States District Court for the Eastern District of Michigan , and to stay the retained claims against Gulf States

. Toyota and Gulf States seek a writ of mandamus directing the distric t court to grant the motion

. Plaintiff American Vehicular Sciences LLC (AVS)

, which owns the patents at issue, opposes.
A district court may “ transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). Applying Fifth Circuit law in cases from district courts in that circuit, this court has granted writs of mandamus to correct denial s of transfer that were clear abuse s of discretion under governing legal standards

. See In re Microsoft Corp. , 630 F.3d 1361 (Fed. Cir. 2011); In re Nintendo, Ltd. , 589 F.3d 1194 (Fed. Cir. 2009); In re Genentech Inc.

, 566 F.3d 1338 (Fed. Cir. 2009); In re TS Tech USA Corp.

, 551 F.3d 1315 (Fed. Cir. 2008 ); accord In re Volkswagen of Am., Inc. , 545 F.3d 304 (5th Cir. 2008) (en banc).

AVS brought this suit in the Eastern District of Texas in 2012, five months after AVS was incorporated in the Western District of Texas . AVS is a subsidiary of patent

licensi ng and

- enforcing company Acacia Research Inc. and shares an office in the Eastern District of Texas with other subsidiaries of Acacia. At least some of the patents at issue are in the same family as patents that were theIN RE TOYOTA MOTOR CORP ORATION 3

subject of cases litigated in the Eastern District of Mich igan from the early 2000s to 2011. See

, e.g. , Auto. Techs. Int’l, Inc. v. Delphi Corp. , 776 F. Supp. 2d 469 (E.D. Mich. 2011); Auto. Techs. Int’l, Inc. v. Siemens VDO Auto

. Corp.

, 669 F. Supp. 2d 836 (E.D. Mich. 2009).

A few month s after this suit began, Toyota and Gulf States filed a motion making three related requests. I nvoking Fed. R. Civ. P. 21 , they moved to sever the claims against Gulf States . I nvoking 28 U.S.C. § 1404(a), they moved to transfer the claims against Toyota to the Eastern District of Michigan. After transfer of the claims against Toyota, they argued, the remaining claims against Gulf States should be stayed pending resolution of the transferred case in Michigan. The transfer and stay requests a re related be cause, they said, Gulf States could not be sued in the Eastern District of Michigan. Gulf States is located in Houston, Texas ( i.e. , the Southern District of Texas), and is an independent distributor of Toyota vehicles in Arkansas, Louisiana, Mississippi, Oklahoma, and Texas.

The district court

, adopting the ruling of the magi strate judge

, did not rule on the request s to sever and stay separately from the request to transfer . Instead, it set Gulf States to one side to consider whether the standards for transferring the claims against Toyota a re met. The court held that they a re not, concluding that “ the conve nience factors do not indicate that transfer to the Eastern District of Michigan would be clearly more convenient. ” Base d on that transfer denial, the court denied the seve rance

- and

- stay motion, stating that “ there is little, if any, reason to sever and stay the claims against Gulf States. ” In reaching its conclusion about transfer, the court found no factor favoring rete ntion of the claims against Toyota in the Eastern District of Texas. I n particular, i t did not count the recent opening of an office by AVS as weighing in favor of the transferor forum. Cf. In re M i-IN RE TOYOTA MOTOR CORP ORATION 4

crosoft , 630 F.3d at 1364

- 65. On the other hand, the di strict court found that several factors favor transfer to the Eastern District of Michigan. In particular, t he court determined that the interest in ease of access to sources of proof weighs in favor of transfer. It also determined that
t ransfer i s suppo rted by t he public interest factor that looks at local interests in the litigation

. T hose determin ations are amply supported

. The district court found that two factors

— the availability of compulsory process to secure attendance of wi tnesses and the cost of attendance for willing witnesses

—
a re neutral regarding transfer

. That determination appears to be incorrect. No non

- party witnesses have been identified as being within the Eastern District of Texas

. 1 On the other hand, it appears undisputed that a number of witnesses in the Eastern District of Michigan have knowledge potentially relevant to infringement and validity issues, even if it i s not possible at present to specify further just how material the ir testimony might be
to the yet- undeveloped iss ues in the case. Th e comparison between the transferor and transferee forum s is not altered by the presence of other witnesses and documents in places outside both forum s

. See In re Nintendo , 589 F.3d at 1199

- 200; In re Genentech , 566 F.3d at 1346. This comparison appears not to be neutral, but to favor tran sfer

.

1 AVS asserts in its response to the mandamus p eti tion that “witnesses for AVS are located in the EDTX.” But the only cited evidence is a document stating no more than that AVS is “located in Texas” and “any of its wi tnesses would have to travel to Michiga n.” Th at statement does not establish that there are witnesses in the Eastern District of Texas, and the district court did not rely on AVS’s statement.IN RE TOYOTA MOTOR CORP ORATION 5

We need not draw any definitive conclusion , however, about the district court ’s determination in that respect. Nor need we disagree with , or further analyze, the district court’s treatment of certain other related litigation as neutral regarding transfer here. The court noted that the Eastern District of Michigan had been home to several cases involving patents in the same family , breeding decisions and familiarity of some relevance to the pr esent

case

. The district court in this case also noted that the Eastern District of Texas is currently home to several other cases involving the patents at issue here, though AVS initiated those c ases more or less simultaneously with the present case. 2
Taken on its own terms, t he district court’s analysis presents a clear overall picture : nothing favors the tran sferor forum, whereas several factors favor the transferee forum. The analysis may not show that the transferee forum is far more con venient. B ut that is not what is required . With nothing on the transferor

- forum side of the ledger, the analysis show s that the transferee for u m is “ clearly more convenient.” In re Volkswagen , 545 F.3d at 315 (emphasis added); In re TS Tech

. , 551 F.3d at 1320 ( “Fi fth Circuit precedent clearly forbids treating the plaintiff’s choice of venue as a distinct factor in the § 1404(a) analysis”)

. In these circumstances, the district court’s no

- transfer conclusion was a clear abuse of discr etion.

The district court d eclin ed to sever (or stay) the claims against Gulf States based entirely on its determ ination that transfer would not be appropriate in any event. Because we reverse that premise, the district court
must newly address the severance

- and

- stay motion on

2 Petitioners state, without contradiction, that one of those cases has settled and transfer motions are pen ding in others.IN RE TOYOTA MOTOR CORP ORATION 6

remand. It must do so on the premise that , putting Gulf States aside, Toyota has a clear right to transfer

. T he district court cited a district court decision, which in turn cites many other district court decisions, addressing requests for se verance coupled to transfer requests. See Shifferaw v. Emson USA

, No. 2:09

- CV

- 54, 2010 WL 1064380 (E.D. Tex. Mar. 18, 2010). If the district court

severs the claims against Gulf States , the remainder of the case must be trans ferred.
Accordingly

, I T I S O RDERED T HAT : The petition for a writ of mandamus is granted , the order denying the motion to transfer , sever, and stay is vacated, and the case is remanded for further procee d ings consistent with this Order.

F OR THE C OURT

April 3, 2014 /s/ Daniel E. O’Toole Date Daniel E. O’Toole Clerk of Court