01/25/2010 10:35:37 PM EST
Bensen on In re TS Tech USA Corp.: Motions to Transfer Venue in Patent Cases
In re TS Tech United States Corp., 551 F.3d 1315 (Fed. Cir. 2008) opened the door for patent infringement defendants in the Eastern District of Texas to get a change of venue. The decision, read with a series of decisions addressing rejected motions to transfer, makes it clear that if a patentee can point only to its choice of forum and sales in the District of an infringing product sold nationally, the patentee will have a difficult time keeping its case in the District. In this Analysis, Eric Bensen analyzes In re TS Tech USA Corp. and discusses the decision’s application. He writes:
Summary of the Case in the Lower Court
Leer sued TS Tech USA Corp. and related companies (“TS Tech”) in the Eastern District [of Texas] for infringement of Lear's patent relating to a pivotally attached vehicle headrest assembly. The Eastern District had little connection to the case inasmuch as the parties were incorporated or had principal places of business in Delaware, Michigan, Ohio and/or Canada, documentary evidence was located mainly in Ohio and the key witnesses lived in Ohio, Michigan and Canada. While Honda Motor Co. sold cars containing defendant's allegedly infringing headrests in the Eastern District, Honda did so only as a result of selling such vehicles nationally.
TS Tech moved to transfer venue to the Southern District of Ohio; the lower court denied the motion. The court reasoned that TS Tech had failed to show that the inconvenience of the parties and witnesses clearly outweighed the deference due to the plaintiff's choice of venue. The court further found that the citizens of the Eastern District had a “substantial interest” in having the dispute tried locally because several allegedly infringing vehicles were sold there. TS Tech sought a writ of mandamus from the Federal Circuit.
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The TS Tech Decision
Because a motion to transfer venue does not involve substantial issues of patent law, the Federal Circuit applied Fifth Circuit law. Specifically, it applied the public and private factor approach used in In re Volkswagen [545 F.3d 304 (5th Cir. Tex. 2008)] to determine whether the lower court erred in not holding that the Southern District of Ohio was “clearly more convenient” than the Eastern District of Texas for the suit.
In the Federal Circuit's view, the lower correctly applied some of the private and public interest factors. For example, it correctly concluded that the Southern District of Ohio was in no better position to decide the case than the Eastern District and that the administrative difficulties due to court congestion was a neutral factor.
However, in the court's view, the lower court committed several key errors in its analysis.
1. It gave too much weight to the plaintiff's choice of forum, which is not a distinct factor in a venue transfer analysis, but rather, the reason for placing the burden on the defendant to show that the alternative venue is clearly more convenient.
2. It failed to properly consider the additional costs to witnesses of traveling to Texas rather than Ohio, which was closer to where they resided.
3. It failed to give proper weight to the fact that the evidence was largely located in Ohio.