Jonathan Pink — Entertainment, Internet and New Media Partner at Lewis Brisbois, LLP Rotating Header Image

Saying So Long to the Eastern District of Texas

“The stars at night, are big and bright, deep in the heart of . . . .” Well it ain’t Texas anymore.

 

In a ruling that issued last week from the United States Court of Appeals for the Federal Circuit, the Court seems to have put an end to the Eastern District of Texas as the “rocket docket” for patent claims. See In Re TS Tech USA Corp. (on Writ of Mandamus from United States District Court for the Eastern District of Texas in Case No. 2:07-CV-406 [Lear Corp. v. TS Tech]).

 

As you may know, recall, could-care-less, the Eastern District of Texas was the place for plaintiffs to file patent infringement claims. Why? Well it wasn’t for the scenery (or the caliber of intelligence associated with the recent Presidents they’ve produced). No, it was because of the amazing results so many patent plaintiffs had obtained there. Analogizing to another Western desert forum, the Eastern District was a slot machine that paid out more often than not. OK, so who could blame the plaintiffs bar for filing there?

 

In addition to the steady stream of successful plaintiffs’-patent cases, the Eastern District was notorious for refusing defendants’ motions to transfer venue. (Venue is governed by 28 U.S.C. Section 1404(a), and it generally provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to another district court or division where it might have been brought.” The Eastern District has traditionally translated this language to “Never.”

 

So, along comes TS Tech (“TST”), who is sued by Lear Corp (“Lear”) for the alleged infringement of Lear’s patent relating to pivotally attached vehicle headrest assemblies (for purposes of this blog, the “Thingies”). TST made the Thingies for Honda Motor Corp. whom (you will be surprised to hear) actually sells their cars into the Eastern District of Texas. (Yes, I was surprised to hear this too; it’s not all horses down there any more. Although one portion of the a horse is – in my mind – closely related to George W. Bush, but don’t get me started.)

 

Based on the presence of the Thingies on the Hondas in the Eastern District, Lear claimed that the courts there had jurisdiction, and – no surprise – the courts agreed. TST challenged that jurisdiction by way of a motion to transfer. The Texas district court sided with Lear and denied the transfer. It found that TST had failed to demonstrate that the inconvenience to the parties and witnesses clearly outweighed the deference entitled to Lear’s choice of bringing suit where it was sure to win – uh, I mean where it wanted to. Specifically, the court head that because several vehicles with the allegedly infringing headrest had been sold in the venue, the Eastern District had a “substantial interest” in having the case tried locally.

 

TST appealed. In a nutshell, TST argued that the district court had ignored precedent and clearly abused its discretion as the case had no connection to the Eastern district other than Lear’s decision to file there.

 

The Court of Appeals analyzed 28 U.S.C. Section 1404(a) and held that “[d]espite correctly applying some of the factors, the district court’s Section 1404(a) analysis contained several key errors.” First, the Court said that the trial court had given “too much weight to Lear’s choice of venue under Fifth Circuit law.” The Court noted that while such choice is “accorded deference,” it may not be a “distinct factor in the Section 1404(a) analysis.” Secondly, the Court said that the district court ignored the substantially increased cost associated with trying the case in Texas, as opposed to Ohio, where TST is based (and thus where witnesses and other documentary evidence would be found). Finally, the Court said that the lower court had “disregarded Fifth Circuit precedent in analyzing the public interest in having localized interest decided at home.” The Court observed (as had the lower court) that the Federal judges in Ohio were every bit as qualified to hear this case as were their brethren in Texas.

 

Based on this reasoning, and having further determined (through separate analysis) that the lower court’s ruling was therefore “patently erroneous,” the Court of Appeals determined that TST had met its burden of proof and therefore granted TST’s petition for Writ of Mandamus and transferred the venue from Texas to Ohio.

 

Is this the end of the Eastern District as the patent-go-to-rocket-docket? As much as I love to travel, I hope so. We’ll have to keep an eye on this issue, but it seems the wall has begun to crumble.

Jonathan Pink is a business lawyer with a specialty in copyright, patent and trademark litigation. His clients include many of the biggest names in the automotive and motorcycle aftermarket parts industries, and one of world's largest media companies. He has extensive experience in a wide range of intellectual property and commercial disputes including breach of contract, fraud, and the misappropriation of trade secrets. He can be reached at 949.223.7173, or at jonathan.pink@bryancave.com, and his full profile can be viewed at www.bryancave.com.

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