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Federal Circuit Applies Volkswagen to Patent Case

By Sherry L. Talton, Litigation News Associate Editor – January 23, 2009

In a ruling raising more speculation among the patent bar about whether the Marshall, TX, court is still a “rocket docket” for patent infringement cases, the Federal Circuit recently issued a writ of mandamus ordering the Eastern District of Texas to transfer a patent infringement case involving headrest assemblies in Honda vehicles to the Southern District of Ohio.

Federal Circuit Ruling
In Re TS Tech USA Corp. [PDF] is the Federal Circuit’s first interpretation of Volkswagen II [PDF], a Fifth Circuit en banc decision concerning venue motions that the plaintiff recently appealed to the U.S. Supreme Court. In fact, the Federal Circuit criticized the district court for making errors in In Re TS Tech that were “essentially identical” to those in Volkswagen II. The Federal Circuit found the “vast majority” of the relevant witnesses, evidence, and events arose in either Ohio or Michigan. The sale of accused products in the district did not weigh in favor of maintaining venue because they were also sold throughout the United States.

Many patent law bloggers found the Federal Circuit’s criticism of Judge T. John Ward unfair because Volkswagen II was not issued until six weeks after Judge Ward denied the motion to transfer venue in this case.

Transfer Motions in E.D. Texas
Nonetheless, there seems to be a widespread agreement that In Re TS Tech may make it more difficult for plaintiffs in patent infringement cases to maintain venue in the Eastern District of Texas. Joseph P. Esposito, Washington, D.C., cochair of the Section of Litigation Patent Subcommittee of the Intellectual Property Litigation Committee, anticipates that, as a result of the ruling, “more defendants are likely to file motions to transfer cases out of the Eastern District of Texas.”

However, Esposito would not be surprised to see patent-holding companies “set up offices in E.D. Texas to try to defeat transfer motions.” Further, “the ruling may encourage patent holding companies to sue even larger groups of defendants from multiple jurisdictions, in order to support an argument that there is no other single forum which is more convenient than the Eastern District.”

Patent Infringement Redistribution
Robert M. Asher, Boston, MA, cochair of the Section’s Intellectual Property Litigation Patent Subcommittee, views these decisions as a judicial redistribution of patent infringement cases across the federal district courts. “The Texas court’s hold over a disproportionate number of patent . . . [cases] will be moderated by the Fifth Circuit and Federal Circuit decisions. District courts, such as Massachusetts, which recently adopted new procedural rules for handling patent litigations, are gearing up to handle their fair share of the patent litigations.”

Future of the Rocket Docket
But the status of the Eastern District of Texas as a true rocket docket may have more to do with a greater trend of patent holders searching for faster dockets. As Esposito observed, “cases in the Eastern District of Texas now routinely take two to three years to get to trial, which is comparable to many other federal courts.” Thus, only time will tell the future of the Eastern District of Texas as a popular venue for patent holders.

Keywords: In Re TS Tech USA Corp., Eastern District of Texas, rocket docket, venue transfer, patent infringement


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