Court Opinion

ID: 9403567
Source: CourtListenerOpinion
Date Created: 2023-06-21 15:02:55.328504+00
Date Added: 2024-06-11T17:20:07.970161
License: Public Domain

Case: 23-128    Document: 16     Page: 1    Filed: 06/07/2023

           NOTE: This order is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

         In re: MICROSOFT CORPORATION,
                        Petitioner
                 ______________________

                         2023-128
                  ______________________

    On Petition for Writ of Mandamus to the United States
District Court for the Western District of Texas in No. 6:22-
cv-00242-ADA, Judge Alan D. Albright.
                  ______________________

                      ON PETITION
                  ______________________

     Before PROST, REYNA, and STARK, Circuit Judges.
PER CURIAM.
                        ORDER
     Microsoft Corporation petitions for a writ of mandamus
vacating the district court’s order denying transfer under
28 U.S.C. § 1404(a) and directing that the case be trans-
ferred from the United States District Court for the West-
ern District of Texas (“WDTX”) to the United States
District Court for the Western District of Washington
(“WDWA”). Virtru Corporation responds. We grant the pe-
tition.
Case: 23-128    Document: 16      Page: 2    Filed: 06/07/2023

2                              IN RE: MICROSOFT CORPORATION

                       BACKGROUND
    Virtru brought suit against Microsoft for patent in-
fringement in the Waco division of WDTX. Microsoft
moved to transfer the case to WDWA under 28 U.S.C.
§ 1404(a), noting that it is incorporated in Washington and
headquartered in WDWA; that WDWA is where Microsoft
designed, developed, and worked on implementing accused
technology and where the events took place that form the
basis of Virtru’s willful infringement allegations; and that
neither party had any relevant operations in WDTX.
    The district court denied the motion, concluding that
access to sources of proof and local interest slightly favored
transfer; administrative difficulties flowing from court con-
gestion disfavored transfer; and the other factors were neu-
tral. Of particular note, the court found 27 Microsoft
employees in WDWA were potential witnesses (individuals
identified by the parties with relevant and material infor-
mation). Nonetheless, the court found that the willing wit-
ness factor was neutral, citing the fact that Virtru had
identified eight potential party witnesses more conven-
iently located near (but not in) WDTX. The court also
found that Microsoft’s identification of nine potential non-
party witnesses in WDWA with information relating to the
development of accused technology, prior art, and Virtru’s
allegations of willful infringement, was offset by five poten-
tial non-party witnesses identified by Virtru within the
subpoena power of WDTX. On balance, the court concluded
that Microsoft failed to show that WDWA was clearly more
convenient than WDTX.
     Microsoft now petitions this court challenging the dis-
trict court’s denial of transfer. We have jurisdiction pursu-
ant to 28 U.S.C. §§ 1295(a)(1) and 1651(a). See In re Princo
Corp., 478 F.3d 1345, 1351 (Fed. Cir. 2007).
Case: 23-128    Document: 16     Page: 3    Filed: 06/07/2023

IN RE: MICROSOFT CORPORATION                               3

                        DISCUSSION
    In the § 1404(a) transfer context, where we apply re-
gional circuit law (here, the law of the United States Court
of Appeals for the Fifth Circuit), In re TS Tech USA Corp.,
551 F.3d 1315, 1319 (Fed. Cir. 2008), “[w]e review only for
clear abuses of discretion that produce patently erroneous
results,” In re Volkswagen of Am., Inc., 545 F.3d 304, 312
(5th Cir. 2008) (en banc). The Fifth Circuit has made clear
that while “the decision of whether to transfer a case is
committed to the district court’s discretion,” In re Planned
Parenthood Fed’n of Am., Inc., 52 F.4th 625, 629 (5th Cir.
2022), the district court “should” transfer when a movant
“demonstrates that the transferee [forum] is clearly more
convenient,” Volkswagen, 545 F.3d at 315.
    The central dispute in this case is whether WDWA is
relatively more convenient for the potential witnesses. See
In re Genentech, Inc., 566 F.3d 1338, 1343 (Fed. Cir. 2009)
(emphasizing the importance of the relative convenience
and cost of attendance for witnesses); § 1404(a) (permitting
transfer “[f]or the convenience of parties and witnesses”). *

    *    Virtru argues that mandamus is inappropriate be-
cause Microsoft, without justification, allowed 69 days to
pass between the district court’s transfer decision and the
filing of Microsoft’s mandamus petition, and during that
interim the district court held a claim construction hearing
and construed the disputed claim terms. By the time the
petition was filed, only three months remained until the
end of fact discovery and less than eight months remained
until trial. While we do not find this delay to have been so
substantial and prejudicial as to warrant denial of the pe-
tition, timing considerations are always relevant when we
are asked to grant the extraordinary relief of mandamus.
See, e.g., In re Telular Corp., 319 F. App’x 909, 911 (Fed.
Cir. 2009) (noting that five-month delay in filing petition
weighed against granting mandamus); Peteet v. Dow Chem.
Case: 23-128    Document: 16      Page: 4    Filed: 06/07/2023

4                              IN RE: MICROSOFT CORPORATION

The district court found no difference in the comparative
convenience to the party witnesses, even though it recog-
nized there to be at least 27 such witnesses in WDWA and
no such witness in WDTX, because “the only identified Mi-
crosoft employees that work on” one of the accused product
“team[s] reside in the state of Texas” and that Microsoft did
not dispute the relevance of two software engineers who
reside in Texas (but outside WDTX). Appx 9.
     That was a clear abuse of discretion. Such a substan-
tial imbalance in witness convenience cannot be negated
merely by concluding that the convenience of some poten-
tial witnesses is so much more important than for others
where, as here, there are no case-specific findings to sup-
port such a conclusion, none of those witnesses resides in
WDTX, and key witnesses were also found in WDWA, see
In re Toyota Motor Corp., 747 F.3d 1338, 1340 (Fed.
Cir. 2014). See Volkswagen, 545 F.3d at 317 (“[I]t is an ob-
vious conclusion that it is more convenient for witnesses to
testify at home” given the costs of “being away from work,
family, and community.” (internal quotation marks and ci-
tation omitted)). We thus conclude that the district court’s
“steep discounting of this factor is unreasonable on the rec-
ord;” the court “should have [instead] weighed this factor
firmly (not slightly) in favor of transfer.” In re Google LLC,
58 F.4th 1379, 1384 (Fed. Cir. 2023).
     After correcting for that clear abuse of discretion, con-
sideration of the other relevant factors shows that WDWA
is a clearly more convenient forum. Almost twice as many
non-party potential witnesses were found in WDWA as
compared to WDTX, not only making WDWA more conven-
ient for the majority of those witnesses but also allowing
that court to compel their testimony if necessary. The dis-
trict court also found that the access to sources of proof

Co., 868 F.2d 1428, 1436 (5th Cir. 1989) (“Courts have con-
sidered a party’s delay in denying a motion to transfer.”).
Case: 23-128    Document: 16     Page: 5   Filed: 06/07/2023

IN RE: MICROSOFT CORPORATION                              5

factor slightly favors transfer and that “WDWA has a
strong local interest,” Appx 32, given that a “number of the
events that gave rise to this suit took place in Microsoft’s
headquarters in the WDWA,” Microsoft’s prior art system,
as well as at least two of the accused functionalities, were
“likely designed and developed in the WDWA,” and “the
events giving rise to Virtru’s willful infringement allega-
tions also likely took place in the WDWA.” Appx 31. The
only factor the district court weighed against transfer was
court congestion based on a 3- to 7-month time-to-trial dif-
ference, but Virtru offers no argument for why that differ-
ence should be afforded such great weight as to overcome
the other factors weighing in favor of transfer, see Genen-
tech, 566 F.3d at 1347.
    We therefore conclude that denial of transfer here was
patently erroneous. “The center of gravity of this action,
focusing on the Volkswagen factors and the overriding con-
venience inquiry is clearly in the [Western District of
Washington]”—where the vast majority of potential wit-
nesses with relevant and material information reside,
where accused product features were researched, designed,
and developed, and where physical evidence is located—
“not in the Western District of Texas,” where no party wit-
nesses with relevant and material information reside and
where no development of either an accused product or a pa-
tented invention is alleged to have occurred. See Google,
58 F.4th at 1385.
   We have considered the parties’ remaining arguments
and find that they do not change our decision.
    Accordingly,
Case: 23-128    Document: 16      Page: 6    Filed: 06/07/2023

6                              IN RE: MICROSOFT CORPORATION

    IT IS ORDERED THAT:
    The petition is granted. The district court’s order deny-
ing transfer is vacated, and the district court is directed to
grant the transfer motion.
                                       FOR THE COURT

June 7, 2023                           /s/ Jarrett B. Perlow
   Date                                Jarrett B. Perlow
                                       Acting Clerk of Court