Court Opinion

ID: 5117992
Source: CourtListenerOpinion
Date Created: 2021-10-13 15:00:58.535153+00
Date Added: 2024-06-11T08:22:05.145682
License: Public Domain

Case: 21-173     Document: 18    Page: 1    Filed: 10/13/2021

           NOTE: This order is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

         In re: NETSCOUT SYSTEMS, INC.,
                       Petitioner
                ______________________

                         2021-173
                  ______________________

    On Petition for Writ of Mandamus to the United States
District Court for the Western District of Texas in No. 6:20-
cv-00914-ADA, Judge Alan D. Albright.
                  ______________________

               ON PETITION AND MOTION
                  ______________________

  Before LOURIE, BRYSON, and TARANTO, Circuit Judges.
PER CURIAM.
                        ORDER
     NetScout Systems, Inc., petitions for a writ of manda-
mus directing the United States District Court for the
Western District of Texas to transfer this action to the
United States District Court for the Eastern District of
Michigan. PacSec3, LLC, opposes the petition and moves
for leave to file its response out of time. NetScout replies.
For the following reasons, we grant the petition.
Case: 21-173    Document: 18       Page: 2   Filed: 10/13/2021

2                                IN RE: NETSCOUT SYSTEMS, INC.

                             I
     On October 2, 2020, PacSec3 brought this patent in-
fringement action in the Waco Division of the Western Dis-
trict of Texas. PacSec3 filed the action shortly after
incorporating in Texas and acquiring the asserted patents,
which concern network firewalls. App. 120. PacSec3 does
not have an office or employee in the Western District of
Texas. Its only employee is located in the Southern District
of Texas, App. 112, 118.
    In December 2020, NetScout moved to transfer this
case to the Eastern District of Michigan pursuant to 28
U.S.C. § 1404(a). NetScout noted that the accused prod-
ucts were designed and developed by its security division
in Ann Arbor, Michigan, where its core technical docu-
ments and source code are located. App. 40–42. NetScout
noted that engineers knowledgeable about the design, de-
velopment, and operation of the accused products, includ-
ing NetScout’s Vice President of Engineering, Scott
Dawson, work from Ann Arbor, Michigan. App. 41.
NetScout also identified two of its employees from its head-
quarters in Massachusetts who are knowledgeable about
NetScout’s relevant financial and marketing information.
Id. NetScout stated that none of the design or development
work on the accused products was conducted in its sole
Texas facility, which is located in the Eastern District of
Texas. Id. at 42.
     In its response opposing the transfer motion, PacSec3
argued that judicial economy favored denying the motion.
In support of that argument, PacSec3 argued that it had
filed additional related lawsuits in the Western District of
Texas after the transfer motion was filed in this case.
Those cases alleged that different defendants had infringed
the same patents that are asserted in this case. See
PacSec3, LLC v. Juniper Networks, Inc., No. 6:21-cv-00387-
ADA (filed Apr. 21, 2021); PacSec3, LLC v. Cisco Sys., Inc.,
No. 6:21-cv-00388-ADA (filed Apr. 21, 2021); PacSec3, LLC
Case: 21-173    Document: 18      Page: 3    Filed: 10/13/2021

IN RE: NETSCOUT SYSTEMS, INC.                                3

v. Watchguard Techs., Inc., No. 6:21-cv-00633-ADA (filed
June 18, 2021). *
    The district court denied NetScout’s motion to transfer
the case. At the outset, the court found that this action
could have been brought in the Eastern District of Michi-
gan. The district court then analyzed NetScout’s transfer
motion by applying the set of private-interest and public-
interest factors that the Fifth Circuit has directed courts to
use in making transfer decisions under section 1404(a).
See In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir.
2008) (en banc) (“Volkswagen II”).
    The district court took particular note of five of the fac-
tors that the Fifth Circuit has identified as bearing on
transfer: (1) the relative ease of access to sources of proof
between the forums; (2) the relative convenience of the two
forums for potential witnesses; (3) practical issues that
may make trial of a case easier, more expeditious, and less
expensive in one of the forums; (4) the administrative diffi-
culties flowing from court congestion; and (5) the local in-
terest in having disputes regarding activities occurring
principally within a particular district decided by a court
within that district.
     As for the sources of proof, the district court recognized
that NetScout had attested to the fact that the great bulk
of its documentary evidence was located in the Eastern Dis-
trict of Michigan. However, the court found that NetScout
had failed to “specifically identify what documents are in
physical form and what documents are in electronic form,”
and had failed to explain why documents in physical form
could not be made available electronically from NetScout’s
offices in the Eastern District of Texas. App. 115. For that

    * The Cisco case was voluntarily dismissed with preju-
dice on June 23, 2021. App. 132.
Case: 21-173    Document: 18      Page: 4    Filed: 10/13/2021

4                              IN RE: NETSCOUT SYSTEMS, INC.

reason, the district court found that the sources-of-proof
factor favored neither venue.
     With regard to the relative convenience of the two fo-
rums for potential witnesses, the court recognized that at
least one NetScout witness, Scott Dawson, resides in the
Eastern District of Michigan while no party identified any
prospective witnesses located in the Western District of
Texas. Nonetheless, the court concluded that the conven-
ience of the witnesses did not weigh in favor of either
venue. In particular, the court explained that in its view
“the convenience of party witnesses” is generally entitled
to “little weight.” Id. at 117 (internal quotation marks and
citation omitted). The court found that the non-party wit-
nesses who are in California would find either venue
equally convenient. Id. at 118.
     With regard to the practical issues that bear on the con-
venience and cost of a trial, the district court took note of
the infringement cases that PacSec3 had filed in the West-
ern District of Texas asserting the same patents against
other defendants. Those cases were filed after NetScout
filed its motion to transfer. Id. at 119. Based on the fact
that the cases shared overlapping patents, the court pre-
sumed that all the cases would involve overlapping claim
construction, invalidity, prior art, conception, and reduc-
tion to practice issues. Id. Because keeping the case
against NetScout in the Western District of Texas would
allow one trial judge to oversee those issues in all of
PacSec3’s filed cases, the district court found that the in-
terests of judicial economy weighed strongly against trans-
ferring the case. Id.
    The court recognized that the Eastern District of Mich-
igan had a greater local interest in this dispute because the
accused products resulted from research and development
that took place in that district. Moreover, the court noted
that PacSec3 was only recently formed and associated with
Case: 21-173    Document: 18       Page: 5   Filed: 10/13/2021

IN RE: NETSCOUT SYSTEMS, INC.                                5

Texas. Id. at 120. The district court concluded, however,
that the court congestion factor weighed strongly against
transfer because the court in the Western District of Texas
would be likely to reach trial more quickly than would a
court in the Eastern District of Michigan. Id. at 119–20.
    The district court found that the remaining factors
were neutral. Taking into account the weight it assigned
to each of the factors, the district court concluded that
NetScout had failed to show that the Eastern District of
Michigan was a clearly more convenient forum for this lit-
igation. Accordingly, the district court denied the transfer
motion.
                              II
    Our review of transfer rulings is governed by the law
of the regional circuit, which in this case is the Fifth Cir-
cuit. See In re TS Tech USA Corp., 551 F.3d 1315, 1319
(Fed. Cir. 2008). Under Fifth Circuit law, the governing
principles are well settled. Section 1404(a) authorizes a
court to transfer a civil action “[f]or the convenience of par-
ties and witnesses, in the interest of justice[.]” Fifth Cir-
cuit law provides that a motion to transfer should be
granted if “the movant demonstrates that the transferee
venue is clearly more convenient.” In re Radmax, Ltd., 720
F.3d 285, 288 (5th Cir. 2013) (quoting Volkswagen II, 545
F.3d at 315) (internal quotation marks omitted).
     A district court enjoys broad discretion in making a
transfer determination. See In re Vistaprint Ltd., 628 F.3d
1342, 1344 (Fed. Cir. 2010). We have explained, however,
that our deference does not exempt transfer determina-
tions from scrutiny on mandamus. In re Samsung Elecs.
Co., 2 F.4th 1371, 1379 (Fed. Cir. 2021). When a court’s
denial of a motion to transfer under section 1404(a) contra-
venes governing legal standards, we have issued manda-
mus to overturn the denial of transfer. See, e.g., In re Apple
Inc., 979 F.3d 1332 (Fed. Cir. 2020). Based on a close study
of the record in this case, we conclude that the court clearly
Case: 21-173    Document: 18        Page: 6   Filed: 10/13/2021

6                                 IN RE: NETSCOUT SYSTEMS, INC.

abused its discretion in finding that NetScout failed to
make the requisite showing to call for transfer of this case
to the Eastern District of Michigan.
                              A
    The district court’s determination that the Eastern
District of Michigan had a greater local interest in this case
than the Western District of Texas is amply supported. It
is undisputed that the events that form the basis for
PacSec3’s infringement contentions occurred in the East-
ern District of Michigan where the accused products were
developed. See Apple, 979 F.3d at 1345 (noting that this
factor “most notably regards . . . the ‘significant connections
between a particular venue and the events that gave rise to
a suit.’” (quoting In re Acer Am. Corp., 626 F.3d 1252, 1256
(Fed. Cir. 2010)) (emphasis in Apple).
     The district court also correctly determined that
PacSec3’s connections to Texas were recent and insubstan-
tial. The record shows that PacSec3 was formed just a
week before its acquisition of the asserted patents and less
than two months before filing this lawsuit. Moreover,
PacSec3 is based in the Southern District of Texas, not the
Western District of Texas. Its connections to the forum
plainly do not give the Western District of Texas any sig-
nificant local interest in resolving this litigation. See In re
Juniper Networks, Inc., No. 2021-160, 2021 WL 4343309,
at *5 (Fed. Cir. Sept. 24, 2021); In re Samsung Elecs. Co., 2
F.4th 1371, 1365 (Fed. Cir. 2021); In re Zimmer Holdings,
Inc., 609 F.3d 1378, 1381 (Fed. Cir. 2010) (party’s presence
in Texas “appears to be recent, ephemeral, and an artifact
of litigation.”).
                              B
    The district court clearly erred in its assessment that
the convenience of the witnesses was a neutral factor in the
transfer analysis. The Fifth Circuit has stated that the
convenience of the witnesses is best served if the court can
Case: 21-173    Document: 18      Page: 7    Filed: 10/13/2021

IN RE: NETSCOUT SYSTEMS, INC.                               7

“minimize the time when [witnesses] are removed from
their regular work or home responsibilities.” In re
Volkswagen AG, 371 F.3d 201, 205 (5th Cir. 2004). That
task “gets increasingly difficult and complicated when the
travel time from [the witnesses’] home or work site to the
court facility is five or six hours one-way as opposed to 30
minutes or an hour.” Id.; see also In re Google LLC, No.
2021-170, 2021 WL 4427899, at *4 (Fed. Cir. Sept. 27,
2021) (“In light of the purpose underlying the rule, the in-
quiry should focus on the cost and inconvenience imposed
on the witnesses by requiring them to travel to a distant
forum and to be away from their homes and work for an
extended period of time.”).
    Those principles are not, as the district court viewed
them, applicable only to non-party witnesses. As we have
held, the fact that witnesses are affiliated with a party
“does not negate the inconvenience and cost to those indi-
viduals to travel a significant distance to testify.” Google,
2021 WL 4427899, at *4; see also Samsung, 2 F.4th at 1379
(holding that a district court’s section 1404(a) analysis
“must consider” the convenience of “possible party wit-
nesses”); In re Hulu, LLC, No. 2021-142, 2021 WL 3278194,
at *5 (Fed. Cir. Aug. 2, 2021); In re Apple Inc., 818 F. App’x
1001, 1003 (Fed. Cir. 2020) (rejecting the view that the con-
venience of party witnesses is given “little weight”). We
have likewise rejected the categorical assumption, made by
the district court in this case, that defendants are likely to
call few, if any, of the proposed party witnesses who are
identified in support of a transfer motion. Juniper Net-
works, 2021 WL 4343309, at *4.
    PacSec3 argues that its sole employee would be more
inconvenienced by having to travel to the Eastern District
of Michigan rather than to Waco, Texas. That witness,
however, does not live in the Western District of Texas and
would have to travel close to three hours to reach either
forum. App. 97. The district court did not attach weight to
the convenience of that witness. Id. at 118.
Case: 21-173    Document: 18       Page: 8   Filed: 10/13/2021

8                                IN RE: NETSCOUT SYSTEMS, INC.

     The district court also rejected PacSec3’s argument
that the Western District of Texas would be more conven-
ient for three non-party witnesses in California, who are
roughly equidistant from both the transferor and trans-
feree forums. And with regard to PacSec3’s contention that
a number of NetScout’s customers are located in Texas, the
court ruled that PacSec3 had not established that any spe-
cific employees of those companies would be trial wit-
nesses. Id. at 117. Those determinations have not been
shown to be incorrect.
    By contrast, NetScout explained that its engineers who
designed and worked on the accused products are located
in the Eastern District of Michigan. NetScout identified at
least one engineer by name, Mr. Dawson, who resides there
and who would likely be called as a witness. NetScout also
identified two employees who work from NetScout’s head-
quarters in Massachusetts and who have knowledge perti-
nent to the case. Those witnesses undisputedly would find
trial in the Eastern District of Michigan more convenient.
While PacSec3 contends that there are employees of
NetScout in Texas that are knowledgeable about the ac-
cused products, it does not identify those individuals, and
the district court did not find they have relevant infor-
mation.
     Accordingly, NetScout has shown that the Eastern Dis-
trict of Michigan is clearly the more convenient venue for
the identified witnesses, and PacSec 3 has not shown that
the Western District of Texas is the more convenient venue
for any witnesses. The district court therefore erred in not
finding that the convenience of the witnesses favors trans-
fer. See Samsung, 2 F.4th at 1379.
                             C
    The district court also erred in its assessment of the
sources of proof. That inquiry focuses on “the relative ac-
cess to sources of evidence in the two competing forums,”
Juniper Networks, 2021 WL 4343309, at *6. Yet here, no
Case: 21-173    Document: 18      Page: 9    Filed: 10/13/2021

IN RE: NETSCOUT SYSTEMS, INC.                               9

sources of proof are in located in the Western District of
Texas. By contrast, there is no dispute that significant doc-
uments and source code were created and are maintained
in the Eastern District of Michigan. While electronic stor-
age makes documents more widely accessible than was
true in the past, the fact that documents can often be ac-
cessed remotely does not render the sources-of-proof factor
irrelevant. See Volkswagen II, 545 F.3d at 316 (“That ac-
cess to some sources of proof presents a lesser inconven-
ience now than it might have absent recent developments
does not render this factor superfluous.”). The district
court thus erred in not weighing this factor at least slightly
in favor of transfer.
                              D
     The district court also erred in weighing the practical
problems factor significantly against transfer. At the time
of the complaint and even at the time of NetScout’s transfer
motion in December 2020, there was no judicial economy
benefit to keeping this case in the Western District of
Texas. PacSec3 did not file the first of the other Texas ac-
tions relied on by the district court until April 2021. In
previous cases, we have rejected a district court’s reliance
on considerations of judicial economy arising after the fil-
ing of the lawsuit or the transfer motion as irrelevant to
the analysis. In re HP Inc., 826 F. App’x 899, 903 n.2 (Fed.
Cir. 2020); In re EMC Corp., 501 F. App’x 973, 976 (Fed.
Cir. 2013).
    PacSec3 asks us to reject those cases as non-binding
and contends that giving significant weight to post-motion
events furthers the purposes of section 1404(a). We are not
persuaded. To the extent that post-motion events may ever
be considered in a section 1404(a) analysis, we must guard
against manipulative measures designed to defeat transfer
to a more convenient venue. See Van Dusen v. Barrack,
376 U.S. 612, 624 (1964); Samsung, 2 F.4th at 1378 (“We
have similarly rejected parties’ attempts to manipulate
Case: 21-173    Document: 18       Page: 10    Filed: 10/13/2021

 10                               IN RE: NETSCOUT SYSTEMS, INC.

 venue.”). PacSec3’s infringement action against NetScout
 lacks any legitimate mooring to the Western District of
 Texas. To allow PacSec3 to defeat transfer to a more con-
 venient forum by assigning significant weight to PacSec3’s
 other actions, filed after the transfer motion was filed in
 this case, would invite venue manipulation.
      Beyond that, while we recognize that judicial economy
 can serve important ends in a transfer analysis, we have
 rejected as a general proposition that the mere co-pendency
 of infringement suits in a particular district automatically
 tips the balance in the non-movant’s favor. See In re Google
 Inc., No. 2017-107, 2017 WL 977038, at *2 (Fed. Cir. Feb.
 23, 2017); see also Samsung, 2 F.4th at 1379–80 (conclud-
 ing that the district court erred in allowing judicial econ-
 omy concerns to outweigh convenience); EMC, 501 F. App’x
 at 976. Here, PacSec3’s other actions in the Western Dis-
 trict of Texas involve different defendants and different ac-
 cused products. They are therefore likely to involve
 significantly different discovery and evidence. Any judicial
 economy considerations would be insufficient to outweigh
 the clear benefits of transfer in light of the imbalance in
 the parties’ respective presentations on the other private-
 interest and public-interest factors.
                              E
     Finally, we disagree with the district court that court
 congestion analysis provides a basis for denying transfer.
 The district court did not find an appreciable difference in
 the degree of docket congestion between the two forums.
 See Juniper Networks, 2021 WL 4343309, at *6. Nor did
 the court point to any reason that a more rapid disposition
 of this case that might be available in Texas is worthy of
 important weight. Id. Instead, the court based its finding
 as to the court congestion factor solely on the median time
 to trial between the districts. We reject that rationale for
 denying transfer.
Case: 21-173     Document: 18        Page: 11   Filed: 10/13/2021

 IN RE: NETSCOUT SYSTEMS, INC.                               11

     We have held that when other relevant factors weigh
 in favor of transfer or are neutral, “then the speed of the
 transferee district court should not alone outweigh all of
 those other factors.” In re Genentech, Inc., 566 F.3d 1338,
 1347 (Fed. Cir. 2009). And where, as here, the court has
 relied only on median time-to-trial statistics to support its
 conclusion, we have characterized this factor as the “most
 speculative” of the factors bearing on the transfer decision.
 Id. Speculation about what might happen with regard to
 the speed of adjudication in a particular case is insufficient
 to warrant denying transfer to a more convenient forum.
                                 F
      In sum, the center of gravity of this action lies in the
 transferee district, and decidedly not in the Western Dis-
 trict of Texas. Several of the most important factors bear-
 ing on the transfer decision favor transferring the case, and
 no factor favors retaining the case in the Western District
 of Texas. In fact, there is nothing at all that ties this case
 to the Western District of Texas: no witnesses reside there;
 no evidence is present there; and none of the conduct giving
 rise to this action took place there. The only apparent con-
 nection between this case and the Western District of
 Texas is that it appears that PacSec3 prefers to file its suits
 there. That is not enough to overcome a transfer motion
 directed to a district which is the home of evidence, wit-
 nesses and the conduct giving rise to the action. We there-
 fore grant NetScout’s petition seeking transfer of the case
 to the Eastern District of Michigan.
     Accordingly,
     IT IS ORDERED THAT:
     (1) PacSec3’s unopposed motion to file its corrected re-
 sponse brief out of time is granted. ECF Nos. 14 and 15 are
 accepted for filing.
     (2) The petition for mandamus is granted. The district
 court’s July 27, 2021, order is vacated, and it is directed to
Case: 21-173    Document: 18     Page: 12    Filed: 10/13/2021

 12                            IN RE: NETSCOUT SYSTEMS, INC.

 transfer this matter to the United States District Court for
 the Eastern District of Michigan.
                                 FOR THE COURT

        October 13, 2021         /s/ Peter R. Marksteiner
             Date                Peter R. Marksteiner
                                 Clerk of Court
 s28