Source: https://mcsmith.blogs.com/eastern_district_of_texas/2013/01/index.html
Timestamp: 2019-04-24 10:43:32+00:00

Document:
The following study, first presented at the Eastern District of Texas Bench and Bar Conference on October 26, 2012, examines the trends of patent appeals and mandamus petitions from the U.S. District Court for the Eastern District of Texas to the U.S. Court of Appeals for the Federal Circuit from September 1, 2008 to November 1, 2012. The study’s timeframe begins before the U.S. Court of Appeals for the Fifth Circuit issued In re Volkswagen of America, Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc), defining the venue transfer standards for the Fifth Circuit under 28 U.S.C. § 1404(a). Tables 1 to 8 provide the study’s objective data, collected using Westlaw® to search for all patent appeals and mandamus petitions from the Eastern District of Texas to the Federal Circuit during the study’s timeframe.
Table 1 provides the yearly number of decided patent appeals and mandamus petitions from the Eastern District of Texas to the Federal Circuit. It also provides the yearly number of affirmances and mandamus denials. As seen, the number of patent appeals has steadily risen from thirteen to eighteen appeals from September 1, 2008 to November 1, 2012. The number of affirmances also rose from eight to fourteen during the same timeframe as the overall number of appeals has increased, resulting in a 62 to 78% affirmance rate during the study’s timeframe. The gap between the number of appeals decided and the number of affirmances includes the number of affirmances-in-part/reversals-in-part and full reversals.
Table 1 also provides the yearly number of mandamus petitions from the Eastern District of Texas to the Federal Circuit during the study’s timeframe. Until 2011, the number of petitions steadily rose from zero to eleven petitions after the Federal Circuit issued In re TS Tech, 551 F.3d 1315 (Fed. Cir. 2008), relying on the Fifth Circuit’s venue transfer standards in In re Volkswagen. Since September 1, 2011, the number of mandamus petitions decreased to eight petitions, while the number of mandamus denials since September 1, 2010 held steady at six denials. From September 1, 2008 to September 1, 2010, the number of mandamus denials rose commensurate with the number of petitions filed, resulting in a 50 to 67% denial rate. In 2011, the Federal Circuit denied 55% of the mandamus petitions filed, and it denied 75% of the filed petitions up to November 1, 2012. The overall data indicates the Eastern District of Texas has an increasingly high affirmance rate at the Federal Circuit.
Table 2 shows the yearly win rate for Eastern District of Texas plaintiffs and defendants at the Federal Circuit from September 1, 2008 to November 1, 2012. From September 1, 2008 to September 1, 2011, defendants led plaintiffs in the number of victories at the Federal Circuit. These numbers include affirmances, affirmances-in-part, and reversals that favor plaintiffs and defendants. As of November 1, 2012, the number of plaintiff and defendant wins equaled eleven each.
Table 2 also shows the yearly number of plaintiff and defendant wins for mandamus petitions to the Federal Circuit during the study’s timeframe. The number of plaintiff wins (mandamus denials) and defendant wins (mandamus grants) steadily increased from September 1, 2008 to September 1, 2011, commensurate with the number of petitions filed during that time. During the same timeframe, the number of plaintiff wins outpaced the number of defendant wins. For the past two years, the number of plaintiff wins held steady at six, while the number of defendant wins decreased from five to two.
Table 3 provides the ratio of Federal Circuit affirmances of Eastern District of Texas final judgments under Federal Rule of Appellate Procedure 36 from September 1, 2008 to November 1, 2012. Rule 36 affirmances are summary affirmances of a lower court’s final judgment. The Federal Circuit affirms a final judgment under Rule 36 when the three members of the appellate panel unanimously agree that the lower court adequately disposed of the issues appealed and that no further opinion is necessary.
As seen, the ratio of Rule 36 affirmances steadily increased to 100% by September 1, 2011. This means that all of the Federal Circuit affirmances of Eastern District of Texas final judgments between September 1, 2010 and September 1, 2011 were Rule 36 affirmances. From September 1, 2011 to November 1, 2012, the ratio of Rule 36 affirmances was 43%.
Table 4 shows the number of Federal Circuit affirmances of issues appealed from the Eastern District of Texas during the study’s timeframe. These issues include claim construction, infringement, invalidity, written description, damages, willfulness, and inequitable conduct. As seen, the Federal Circuit affirmed an increasing number of infringement issues and affirmed a somewhat constant number of claim construction and invalidity issues from September 1, 2008 to November 1, 2012. The number of Federal Circuit affirmances of written description, damages, willfulness, and inequitable conduct issues varied over the study’s timeframe.
Table 5 provides the number of Federal Circuit reversals of the same issues shown in Table 4 that were appealed from the Eastern District of Texas from September 1, 2008 to November 1, 2012. As seen, the Federal Circuit reversed an increasing number of infringement issues until September 1, 2011, while the Court reversed no infringement issues between September 1, 2011 and November 1, 2012. The increased number of affirmances and reversals of infringement issues is due to the overall rise of patent appeals from the Eastern District of Texas to the Federal Circuit during the study’s timeframe. The number of reversals of invalidity issues also increased, while the number of claim construction reversals decreased over the study’s timeframe. The number of reversals of written description, damages, willfulness, and inequitable conduct issues varied over the same timeframe.
Table 6 shows the number of Federal Circuit affirmances (including Rule 36 affirmances and mandamus denials) of Eastern District of Texas judges between September 1, 2008 and November 1, 2012.
Table 7 provides the number of Federal Circuit affirmances-in-part/reversals-in-part of Eastern District of Texas judges between September 1, 2008 and November 1, 2012.
Table 8 shows the number of Federal Circuit reversals (including mandamus grants) of Eastern District of Texas judges between September 1, 2008 and November 1, 2012.
[*] Associate, Winston & Strawn LLP, Houston, Texas. The contents of this study do not reflect the views of Winston & Strawn LLP or any of its clients.
Google’s position in this lawsuit is distinguishable from an ordinary situation where two competitors are joined as co-defendants. Google and Skyhook are more than competitor co-defendants—they are also adversaries in another lawsuit involving similar technologies and patents as the present suit. Skyhook also has pending patent applications claiming priority to patents asserted against Google in the Massachusetts Suit. This creates a very real threat that Skyhook will (even unintentionally) use confidential information obtained from Google in the Texas Suit during prosecution of its pending applications. There is also a threat that Skyhook will use confidential Google information obtained in the Texas Suit against it in the Massachusetts Suit. This conflict puts Google between Scylla and Charybdis. It must choose between: (A) sharing information with Skyhook to benefit the Texas Suit at the expense of the Massachusetts Suit; or (B) withholding information from Skyhook to benefit the Massachusetts Suit at the expense of the Texas Suit. Google’s untenable position can be mitigated by severance from the remaining Defendants. See F ED. R. C IV. P. 20(b) (stating a court may order separate trials to protect a party from prejudice).
Judge Davis also held that severance was proper under FRCP as interpreted by In re EMC anyway because the case involved different products or methods of infringing in a similar manner.
Notably, Judge Davis did not consolidate the severed case with the other cases for pretrial. "Because of the inherent prejudice to Google resulting from its concurrent lawsuit against Skyhook," he wrote, "the Court will not consolidate Google with the remaining Defendants for pre-trial under Norman IP. See Norman IP Holdings, LLC v. Lexmark Int’l, Inc., 2012 WL 3307942 (E.D. Tex. Aug. 10, 2012) (Davis, J.).
Twice in recent weeks (In re Fusion-io on 12/21/; In re EMC II yesterday) the Federal Circuit, while denying petitions for writs of mandamus, has noted the importance it attaches to addressing motions to transfer in a timely fashion.
In this case, the Court set a hearing on defendant Traveler's motion to transfer venue in this case on January 10 for January 24, with the now-customary language regarding making witnesses to be called at the hearing available for deposition beforehand. (The two weeks notice is also consistent with recent practice - the court issued an order in the first such hearing on 1/4 for a hearing on 1/18). If prior practice holds true, the court would rule on the motion at the conclusion of the hearing, rather than taking additional time to draft a written opinion, thus expediting resolution of the motion, consistent with the Federal Circuit's statement in In re EMC II yesterday quoting the Fifth Circuit that disposition of the motion should take "top priority" in the handling of the case.
However, a week after the court set the hearing, on 1/18 the Defendant Travelers and the plaintiff filed a joint motion to reset the hearing due to scheduling conflicts for a key witness, and three days later on 1/21, three days before the scheduled hearing, an unopposed motion to cancel the hearing on its motion completely, and extend the briefing schedule to permit the surreply brief to be filed 2/8 and an additional brief (which requires leave of court) on 2/22.
This morning the former was granted and the hearing reset to the date requested by the parties (the prior hearing had already been vacated several days ago), but the latter was denied.
Updated: this afternoon the hearing was vacated and Judge Payne granted the motion to transfer.
Yesterday morning I accepted an invitation to work up a presentation on venue-related issues for the forthcoming State Bar Advanced Patent Litigation seminar at the Hyatt Tamaya in New Mexico in July, under the working title of Venue Practice in the Eastern District of Texas After the AIA: Unintended Consequences and Case Management Challenges. I started outlining the paper last night, but had to leave in several big question marks because the Federal Circuit's opinion in In re EMC II had not yet come down. Then, last night, it finally did, in a unanimous opinion by Judge Dyk, with Chief Judge Rader and Judge Moore on the panel answering several important questions dealing with venue in patent cases.
For readers not familiar with the underlying litigation, the case I am talking about is Oasis v. Adrive, a Tyler Division case pending before Judge Amos Mazzant. In Oasis, the plaintiff initially sued 18 companies, asserting violation of its patents dealing with online backup and storage. Judge Mazzant denied the defendants' motions to sever, holding, consistent with prior Eastern District caselaw, that the defendants’ accused services and products were “not dramatically different.” Oasis Research LLC v. ADrive LLC, No. 4:10-CV-435, 2011 WL 3099885, at *2 (E.D. Tex. May 23, 2011), and based on that finding also denied the defendants' motions to transfer. The Federal Circuit granted mandamus to a limited extent, rejecting the test for severance that Judge Mazzant had applied, and holding that claims against independent defendants could not be joined under the transaction-or-occurrence test of FRCP 20 “unless the facts underlying the claim of infringement asserted against each defendant share an aggregate of operative facts." It then remanded for the district court to apply its new test, expressing no opinion on the issue of venue. In re EMC Corp., 677 F.3d 1351 (Fed. Cir. 2012). (This test has nothing to do with the standard under the AIA, the court was careful to point out, noting that this is a pre-AIA case. As a result, the test will have less and less application as the older cases work their way through the system. Unless, of course it is extended to the AIA analysis. As an aside, in an analogous situation, courts applying 28 USC section 1404 after its enactment in 1948 tended to refer to cases applying common law forum conveniens, including the 1947 Gulf Oil v. Gilbert case, so the common law analysis eventually became a substantial part of the statutory analysis).
On remand, Judge Mazzant subsequently severed the matter into four separate cases, consolidated the cases for pretrial proceedings, and again denied the petitioners’ motions for transfer in separate orders. Judge Mazzant concluded that in each case the petitioners had failed to show that the transferee venues were clearly more convenient. In so finding, Judge Mazzant addressed the traditional factors, under which there were considerations going both ways, butalso concluded in each case that judicial economy weighed heavily against transfer, noting that if he were to transfer the cases other courts “would have to spend significant resources to familiarize [themselves] with the patents, prosecution history, claim construction, and other issues in th[ese] case[s].” It was this latter holding that gave rise to the second mandamus proceeding. "Taking particular issue with that analysis," the Federal Circuit wrote in yesterday's opinion, "the petitioners now seek a writ of mandamus with regard to those orders."
The Federal Circuit's opinion started - as all good appellate opinions must - with the standard of review.
The petitioners’ request for a writ directing the district court to transfer these cases runs up against a highly deferential standard of review. The question before us on mandamus is not whether the transferee venues are more convenient and fair; nor is it even whether in our view it was an abuse of discretion for the trial court to have denied transfer, which is the applicable standard of review on direct appeal. Instead, the question is whether the denial of transfer was such a “‘clear’ abuse of discretion” that refusing transfer would produce a “patently erroneous result.” Under this highly deferential standard, we must leave the district court’s decision undisturbed unless it is clear “that the facts and circumstances are without any basis for a judgment of discretion.” Here, we cannot say that standard has been met.
The court then went to the heart of the issue - could the district based its denial of the petitioners' motions to transfer on considerations of judicial economy? Well, to borrow a status from Facebook, it's complicated. First, of all, the court can't consider the judicial economy based on the court's familiarity gained during the pendency of the case. "Petitioners are correct that the district court could not properly rely on judicial economy involved in retaining the very cases that were the subject of the transfer motion," it wrote.. Motions to transfer venue are to be decided based on “the situation which existed when suit was instituted." Any subsequent familiarity gained by the district court is therefore irrelevant." (Internal citations omitted; emphasis added).
But this came with an important caveat. "It does not follow, however," Judge Dyk wrote, "that the district court’s judicial economy rationale was wholly misplaced. While considerations of judicial economy arising after the filing of a suit do not weigh against transfer, a district court may properly consider any judicial economy benefits which would have been apparent at the time the suit was filed. For example, we have held that a district court’s experience with a patent in prior litigation and the copendency of cases involving the same patent are permissible considerations in ruling on a motion to transfer venue. In re Vistaprint, Ltd., 628 F.3d 1342, 1346-47 & n.3 (Fed. Cir. 2010). The latter consideration was applicable here, the panel found, thus the district court "could properly consider the benefits to judicial economy arising from having the same judge handle both Oasis’s suits against the petitioners and Oasis’s suits against other parties involving the same patents and technology as to which there was no issue of transfer."
And here an interesting result of setting the relevant time period at the time suit was instituted comes into play. "Petitioners complain that Oasis’s claims against other defendants have since been dismissed, but, as discussed above, the relevant inquiry is the state of affairs at the time “when suit was instituted.” Because the dismissal of Oasis’s suits as to the other defendants occurred later, it is not relevant to the venue inquiry." (Internal citation omitted; emphasis added). Accordingly, the panel concluded that the district court could properly conclude that considerations of judicial economy favored retention of the cases. But this being the Federal Circuit, there's a caveat to the caveat. "To be clear, we are not suggesting that the judicial economy of having the same judge handle multiple suits involving the same patents should dominate the transfer inquiry. After all, the MultiDistrict Litigation Procedures exist to effectuate this sort of efficiency."
But in the end, the panel noted that even the petitioners conceded that the district court considered all of the other relevant interest factors in reaching the conclusion that the transferee venues were not clearly more convenient for trial than the Eastern District of Texas. The district court found not only that judicial economy weighed against transfer, but also that "a significant number of identified potential sources of proof and witnesses are located outside of the transferee venues, including at least one witness in Carbonite’s case and two witnesses in EMC’s case who reside in the Eastern District of Texas." "Given these facts," it concluded, "we cannot say that, on the whole, the district court’s determination as to transfer was so unreasonable as to warrant mandamus relief." According the petition was denied, and the associated motion to stay denied as moot.
Here in downtown Marshall we have a lot going on during the week. We have acoustic jam outdoors on Monday nights, Boogie Woogie Wednesdays at OS2, Blind Dog Cook at the The Blue Frog on Thursdays (don't ask) and the Second Saturday festival on North Washington Street once a month. I mean we're not Jefferson or anything, but we have our moments.
And we now have a new attraction, Evidentiary Venue Hearing Fridays over at the Sam B. Hall, Jr. Federal Building and United States Courthouse, sometimes (okay, only once) referred to as Sammy B's. Today was a double-header at Judge Hall's old stomping grounds with Judge Gilstrap conducting one hearing upstairs, and Judge Payne a second downstairs. Lawyers screamed, witnesses burst into tears (or maybe it was the other way around - my notes are not clear), gavels rang out - yada, yada. At the end of the day, one motion to transfer was granted and one denied. Statistically, that's about half.
It may not be as exciting as the Fire Ant Festival, but it sure beats the hell out of Markman hearings.
As I posted last week, the docket reallocation sent a couple hundred of Judge Schneider's pending cases to Judge Gilstrap. Prior to that, however, Judge Schneider ruled on a number of pending motions to transfer in the Geotag litigation.. I have extracted two grants to summarize, and will try to post on an exemplar denial in the next few days.
In a truly magnificent coincidence, the motions below are by Godfather's and Fredo (okay, Fred's).
Nebraska. That's where Geotag's claims against Godfather's Pizza are headed after Judge Schneider granted the motion to transfer. Geotag didn't opose GP's motion to sever as long as the case stayed and was consolidated for pretrial, but did oppose if it would be transferred.
This litigation involves over 100 cases against in excess of 400 defendants. Although GeoTag asserts the ‘474 patent in each case, none of the cases involve related defendants or overlapping products or services. GeoTag argues that having a single court familiar with the facts and legal issues would produce significant gains in judicial economy. The Court disagrees.
Although all of the cases involve infringement claims, none of them share the same accused services. GeoTag claims that common issues between defendants provide gains in efficiency. But this argument is unavailing. GeoTag has not pointed to any “common issues” that would not be present in all infringement cases (i.e. claim construction). This is not a situation where other practical problems jeopardize the easy, expeditious, and inexpensive trial of this dispute.
The Court will not permit the existence of separately filed cases to sway its transfer analysis. Otherwise, a plaintiff could manipulate venue by serially filling cases within a single district. Allowing a plaintiff to manufacture venue based on this alone would undermine the principals underpinning transfer law and the recently enacted America Invents Act. See Leahy-Smith America Invents Act, 35 U.S.C. § 299 (2011) (codifying new law for determining proper joinder in patent cases).
With respect to the public interest factors, Judge Schneider found three factors netrual, and one, the local interest, to slightly favor transfer. Taking all the factors together, he found that the defendant had carried its "significant burden" to justify a transfer.
Godfather homage, aside, the motion to transfer by Fred's did not take the proverbial fishing trip on Lake Tahoe, and was granted as well.
It was new mousetrap day yesterday over at the federal courthouse in Marshall, where I participated in the first of the new evidentiary venue hearings that are being set for numerous pending motions to transfer venue.
In this case, Judge Payne issued an order on January 4, 2013 setting a motion to transfer for an evidentiary hearing on January 18. The order provided that "[t]he parties to the Motion shall present testimony from one or more witnesses sufficient to carry their burden with regard to the Motion. Any witness(es) shall be promptly disclosed and made available for deposition prior to the evidentiary hearing."
Pursuant to the order, the plaintiff disclosed one witness and the defendant two, and on Tuesday of these week those three fortunate souls were subjected to deposition, (one by me, two defended by my fearless cocounsel).
Then, yesterday morning, Judge Payne opened the hearing at 9:30, heard two and a half hours of testimony (no argument was presented), broke for lunch, and reconvened, at which time he read into the record his ruling, which took up two and a half pages of notes, single-spaced - at least how I take them. The ruling provided his analysis of the venue factors one by one, and his findings based on the evidence adduced at the hearing.
Judge Payne granted T-Mobile's motion for summary judgment of noninfringement, finding that the evidence showed that no reasonable juror could find that a specified element was met by any of T-Mobile's devices. In doing so, Judge Payne considered the motion and response, and, pursuant to Local Rule CV-7(f) did not wait for a reply or surreply.
Well, it's not as big a deal as the Cowboys defense shifting from the 3-4 base defense they've used the past eight years to a 4-3 (shown in last year's Buffalo game) under new defense coordinator Monte Kiffin, but it's still of at least moderate interest locally.
Chief Judge Davis issued two orders yesterday modifying the judges' docket assignments slightly, and reallocating the existing cases to reflect the new allocation. The reallocation in General Order 13-2- the first since Judge Folsom's retirement last March - raises Judge Gilstrap's portion of the Marshall civil docket from 75% to 100%, replacing Judge Schneider's 25%, and raises Judge Schneider's share of the Texarkana docket to 100%, replacing Judge Gilstrap's former 10%.
In other news, Judge Schneider and Judge Davis split the Tyler civil docket, Judges Schell and Clark split Sherman civil, and Judge Clark handles all the Beaumont and Lukin patent work, plus the Lufkin civil and 40% of Beaumont civil. Judge Crone matches that 40% of Beaumont and Judge Heartfield covers the other 20%. I'm not even starting on how the criminal docket is divided up.
General Order 13-3 then lists out the existing cases that are to be redistributed, and contains a helpful appendix telling new parties in Judge Gilstrap's court what to do, which more or less consists of directing the parties to execute proposed docket control orders (after getting their new trial dates) and discovery orders that track the form on Judge Gilstrap's website.
My math may be off a bit, but looking at the appendices it appears that the Court celebrated Judge Gilstrap's first anniversary on the bench by having Judge Davis send about 200 (mostly patent) cases to Judge Schneider, Judge Schneider send about 200 (mostly patent) cases to Judge Gilstrap, and Judge Gilstrap send 11 cases (all nonpatent) to Judge Schneider.
January is typically a busy month around the office, with a lot of catching up to do following holidays, as well as continuing the catch-up after our family's recent vacation in early December. But it's also a busy month for writing for me, especially this year. I wanted to post with links to several pieces of writing I've done recently, mainly because three are columns prefacing three good publications that I commend to your reading list, and the other two might have some information that would be of interest to readers. So to the extent anyone is interested, here are this month's pieces.
Chair's column, Texas Bar Journal, January 2013. This month is notable for two reasons - first, it begins our year-long celebration of the Bar Journal's 75th anniversary, and second, we are introducing a graphic redesign of the magazine. (That my picture is four times the size of the current State Bar president's in his column is a glitch we will be working out in future issues, I expect).
Patent Litigation Update: Year in Review 2012, Texas Bar Journal, January 2013. I have written this article several times, and this year focused on the effect of In re EMC and the AIA on multidefendant patent litigation, as well as how courts in Texas are dealing with these issues.
Chair's column, State Bar Litigation Section quarterly publication The Advocate, Volume 61 winter 2012. The current issue on environmental litigation isn't posted yet, but the prior issues through last quarter's Social Media issue are. (Members of the section get the current Advocate in paper prior to its being uploaded to the site).
Chair's column, State Bar Litigation Section News for the Bar, winter 2012. As always, NFTB includes a Federal Update column for those interested in scooping up some timely caselaw.
Social Media Update, 29th Annual Litigation Update, January 11, 2013, Austin Texas.
Underway is Trial Procedure for the upcoming State Bar Federal Court Practice seminar in May, and a couple of others on case management and patent litigation later in the year that I have not started to think much about yet.
Also, I looked down this morning and realized that today marks the fifth anniversary of my joining Siebman, Burg, Phillips and Smith LLP. It's hard to believe it's been five years, but we've had a great time, and look forward to many more. I am reminded once again of one of my favorite quotes, which is by Admiral Clifton A.F. “Ziggy” Sprague . At the end of the Battle off Samar in 1944, Admiral Sprague commented that "[a]t best, I expected to be swimming by now." As I tell my wife, as long as we haven't had to stack my office furniture and files back in the garage, we are doing okay.

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 § 299