Federal Circuit Grants Mandamus, Transfers Case Out of E.D. of Texas

It was bound to happen sooner or later. Initiating patent litigation in East Texas--and keeping it there--just got a littler harder. Today, the CAFC granted an extraordinary writ of mandamus filed by TS Tech. USA Corporation, transferring a patent case out of the E.D. of Texas that was filed by Lear Corp., No. 2:07-CV-406. Applying Fifth Circuit law, Judge Rader wrote for the panel (Rader, Michel, and Prost), finding that the district court (Judge Ward) abused its discretion in an order refusing to transfer a case to Ohio pursuant to a motion under 28 U.S.C. 1404.

From the order:

"Despite correctly applying some of the factors, the district court’s § 1404(a) analysis contained several key errors. First, the district court gave too much weight to Lear’s choice of venue under Fifth Circuit law. While the plaintiff’s choice of venue is accorded deference, In re Horseshoe Entm’t, 337 F.3d 429, 434-35 (5th Cir. 2003), Fifth Circuit precedent clearly forbids treating the plaintiff’s choice of venue as a distinct factor in the § 1404(a) analysis.

***

Second, the district court ignored Fifth Circuit precedent in assessing the cost of attendance for witnesses. It goes without saying that "[a]dditional distance [from home] means additional travel time; additional travel time increases the probability for meal and lodging expenses; and additional travel time with overnight stays increases the time which these fact witnesses must be away from their regular employment." In re Volkswagen AG, 371 F.3d 201, 205 (5th Cir. 2004) ("Volkswagen I"). Because it generally becomes more inconvenient and costly for witnesses to attend trial the further they are away from home, the Fifth Circuit established in Volkswagen I a "100-mile" rule, which requires that "[w]hen the distance between an existing venue for trial of a matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of inconvenience to witnesses increases in direct relationship to the additional distance to be traveled." 371 F.3d at 204-05. The district court’s order here completely disregarded the 100-mile rule.

***

Third, the district court erred by reading out of the § 1404(a) analysis the factor regarding the relative ease of access to sources of proof. As acknowledged in the district court’s order, the vast majority of physical and documentary evidence relevant to this case will be found in Ohio, Michigan, and Canada, and none of the evidence is located in Texas.

***

Finally, the district court disregarded Fifth Circuit precedent in analyzing the public interest in having localized interests decided at home. As in Volkswagen I and Volkswagen II, there is no relevant connection between the actions giving rise to this case and the Eastern District of Texas except that certain vehicles containing TS Tech’s headrest assembly have been sold in the venue.

***

The district court’s reason for concluding that the public interest factor disfavored transfer—that the citizens of the Eastern District of Texas had a "substantial interest" in having the case tried locally because several of the vehicles were sold in that venue, Lear, No. 2:07-CV-406, slip op. at 6—was unequivocally rejected by the Fifth Circuit in Volkswagen I and Volkswagen II. Here, the vehicles containing TS Tech’s allegedly infringing headrest assemblies were sold throughout the United States, and thus the citizens of the Eastern District of Texas have no more or less of a meaningful connection to this case than any other venue."

Patent Litigation Statisitics in Washington State 2008

Looking back on another year of patent litigation in Washington State, 2008 started out with a bang but fizzled to end the year down about 15% from last year , with just 42 cases through December. Washington had more patent cases this year than its neighboring states, Oregon (19); Idaho (3); and Alaska (0), but its patent docket in 2008 was still considerably smaller than California's (413), Texas' (394), New York's (160), Delaware's (165), and Illinois' (158), to name a few of the busiest jurisdictions in 2008. Washington's patent case load in 2008 was comparable to case loads from Georgia (55), Minnesota (47), Wisconsin (64), Virginia (56), and Massachusetts (51). (Source: Justia, as of 12/21/2008)

Judge Martinez (8) and Judge Pechman (7) were assigned the most patent cases in 2008. Other Judges were assigned about half as many, such as Judge Jones (4), Judge Robart (5), and Judge Lasnik (3). (Numbers are from the cases as assigned by the clerk's office. Cases may have been reassigned since then) Judge Zilly is on senior status but he was assigned two patent cases in 2008. Judge Coughenhour, also on senior status, is apparently no longer taking trademark cases and he was not assigned a patent case last year either.

Here is the complete 2008 case list by month filed and assigned judge.

November
Data Retrieval Technology LLC v. Sybase Inc et al	WA Western	Martinez
Vectra Fitness Inc v. Torque Fitness LLC	WA Western	Jones
October
ADC Technology Inc v. Microsoft Corporation et al	WA Western	Martinez
September
Amphipod Inc v. Penguin Brands Inc	WA Western	Pechman
Majestec 125 LLC v. Maritime Fabrications Inc	WA Western	Pechman
Wistron Corporation v. Samsung Electronics Co Ltd et al	WA Western	Pechman
August
Laughing Rabbit Inc v. OpticsPlanet Inc	WA Western	Robart
July
Chef'n Corporation v. Trudeau Corporation	WA Western	Pechman
Northwest Agricultural Products, Inc. v. Emerald Bioagriculture Corp	WA Eastern	Shea
Malki v. Franke Commercial Systems Inc. et al	WA Western	Martinez
Implicit Networks Inc. v. International Business Machines Corporation et al	WA Western	Tsuchida
Loops, LLC et al v. Phoenix Trading, Inc. et al	WA Western	Martinez
Widevine Technologies Inc v. Verimatrix Inc	WA Western	Robart
June
Nintendo of America Inc v. Nyko Technologies Inc.	WA Western	Lasnik
May
Microscan Systems Inc v. Cognex Corporation	WA Western	Martinez
Brower v. Lowe's Companies Inc et al	WA Western	Robart
Westfield Outdoor Inc v. GCI Outdoor Inc	WA Western	Jones
April
TGN, Inc v. CRS, LLC	WA Western	Pechman
VTran Media Technologies LLC v. Astound Broadband LLC et al	WA Western	Pechman
Unigen Pharmaceuticals Inc v. Perrigo Company et al	WA Western	Leighton
Gardner v. Toyota Motor Corporation et al	WA Western	Jones
Koninklijke Philips Electronics NV	WA Western	Pechman
American Piledriving Equipment Inc v. Hydraulic Power Systems Inc et al	WA Western	Martinez
Progressive International Corporation v. Jo-Ann Stores Inc.	WA Western	Lasnik
March
Zacklift International Inc v. Kooima	WA Eastern	Van Sickle
Progressive International Corporation v. CKC International LLC	WA Western	Theiler
Cequint Inc v. TECMobile Software LLC	WA Western	Jones
CRS LLC v. Valve Corp	WA Western	Donohue
February
Laughing Rabbit Inc v. Nashbar & Associates Inc	WA Western	Martinez
J & E Hynds LLC v. Hopscotch Technology Inc	WA Western	Arnold
BE Meyers & Co Inc v. Advanced Armament Corp	WA Western	Theiler
Implicit Networks Inc v. Advanced Micro Devices Inc et al	WA Western	Robart
January
Zodiac of North America Inc et al v. 1181969 Ontario Limited et al	WA Western	Martinez
Laughing Rabbit Inc v. J&S Marketing LLC	WA Western	Lasnik
Sterling International, Inc. v. Hiscox et al	WA Eastern	Shea
Airbiquity Inc v. AT&T Inc et al	WA Western	Theiler
Cequint Inc v. Pint-Sized Apps	WA Western	Robart
Cequint Inc v. Incipher Inc	WA Western	Zilly
Trinity Glass International Inc v. ODL Incorporated	WA Western	Bryan
Fascinations Toys & Gifts Inc v. Levitation Arts Inc et al	WA Western	Robart
Neometal WA Inc v. Industrial Strength Corporation	WA Western	Leighton
Procyte Corporation v. Johnstone et al	WA Western	Zilly

Chef'n Can't Halt Sales of Trudeau's Vegetable Steamer

In a case testing the scope of a design patent after the Federal Circuit's en banc decision in Egyptian Goddess v. Swisa, local food-appliance innovator, Chef'n Corporation, was recently unsuccessful in obtaining a preliminary injunction against competitor, Trudeau Corporation of Boucherville, Quebec, Canada.

From Judge Pechman's order:

"A visual comparison of the ‘503 design and the Trudeau steamer demonstrates certain similarities, but an ordinary observer with knowledge of the prior art would not confuse the two. Both have very slightly concave center circles surrounded by wider, more concave circular brim. (See Holcomb Decl., Ex. K at 1-9.) There are, however, two striking visual distinctions between the ‘503 Patent and the Trudeau steamer. First, unlike Trudeau’s steamer which has only a flat center and one change in concavity, the ‘503 Patent possesses circumferential rings illustrating multiple degrees of concavity. The ‘503 design has two intermediate rings between the center of the steamer and the top ridge. ‘503 Patent, Fig. 4. Trudeau’s steamer, in contrast, has only one intermediate change in concavity. (Holcomb Decl., Ex. K at 6.) Second, Chef’n’s design possesses a small, depressed ring at the center of the steamer. ‘503 Patent, Figs. 1-2, 5. Trudeau’s steamer lacks any such inner circumferential ring. (Holcomb Decl., Ex. K at 5.) The Court is aware that, pursuant to Egyptian Goddess and Gorham, isolated differences are less important than “general appearance and effect.” Egyptian Goddess, Inc., 541 F.3d at 670 (quoting Gorham, 81 US at 531). The two visual distinctions the Court observes, however, are not simply isolated differences. The ‘503 design is visually more complex than the Trudeau steamer and an ordinary observer would not confuse the two."

chef%27n_order_denying_PI.pdf

Local Rule Changes USDC WDWA

As many of you already know, substantial changes to the local rules have been approved and will become effective January 1, 2009. In addition to these changes in local rules, which apply to everyone practicing in the WDWA, the district has adopted Supplemental Patent Rules that apply in all patent cases filed in this district. The purpose of this post is to highlight what I see as the most important changes to the local rules.

GR 2(g). Appearance and Withdrawal of Attorneys

This rule was changed in a number of ways. First, a party that wishes to proceed pro se must make that request by motion, and certify that copies of the motion were provided to all counsel. After the motion, the party must obtain an order of substitution, terminating the attorney and substituting that part pro se.

Second, this rule was changed to state that when an attorney ceases to act as such (either because of death, suspension, or some other reason), the party must find a new lawyer to enter an appearance, or it must make a motion to proceed pro se.

Third, this rule was changed to clarify where there is a change or addition to counsel within the same law firm, an order of substitution is not required. However, when there is a change in law office, such that it effectively terminates the representation of an entire law office, the procedures for changing counsel in GR 4(A) must be followed. **practice tip** withdrawing as attorney inside of 60 days before trial, especially without substitute counsel who can adequately be ready for trial, requires a good reason in this district, so be sure to docket this date.

Finally, this rule clarifies that businesses (except sole proprietors) must be represented by counsel.

CR 3. Commencement of Action

This rule was amended to require that in all actions where jurisdiction is based on 28 U.S.C. 1338 (patents, copyrights, and trademarks), a notice must be sent to the USPTO or copyright office, forms are available on the court's web site.

CR 5. Serving and Filing Pleadings and Other Papers

This is perhaps the most disruptive change to the local rules. Our old way of filing documents under seal was actually in violation of Ninth Circuit law. You may have found this out the hard way when your proposed protective order was rejected or your motion to seal certain documents was denied. This started happening in some cases about two years ago. The changes to how we seal documents are finally official, and here is a brief run down.

Rule 5(g) entitled "Sealing of Court Records" has been changed (under subdivision (2)) to include a "strong presumption of public access to the court's files." This presumption is apparently stronger for dispositive motions because overcoming it in this context requires a "compelling showing that the public's right to access is outweighed by the interests of the public and the parties in protecting the court's files from public view."

What qualifies as an adequate showing under Local Rule 5(g)(2) in order to seal documents necessary to support a dispositive motion is a question that can only be answered on a case by case basis. But generally, litigants will be successful in sealing documents that are clearly proprietary in nature or documents that could provide a competitive advantage to others if made public (think trade secrets, non-public financial information, etc.). Further, private information of an individual, like an address, name, and any other fact that might permit identity theft, is appropriately sealed.

With regard to non-dispositive motions, only a showing of "good cause" is required in order to seal documents. How this differs from the "compelling" showing necessary for dispositive motions is a bit of mystery--it is less, but I'm not sure exactly what would qualify for sealing here but not in the dispositive motion context.

Subdivision (3) of the rule has been amended to set forth specific requirements for obtaining an order sealing documents. The rule states here that only in "rare circumstances" will the court allow an entire memorandum to be filed under seal. The motion, stipulation, or declaration to seal certain documents should not "ordinarily" be filed under seal. If possible, parties "should" redact documents rather than file the entire document under seal. If the entire document is filed under seal, an explanation why redaction was not feasible should be included with the motion.

Subdivision (4) of the rule requires a clear and specific description of the categories of documents to be sealed, and an affidavit or declaration stating reasons for overcoming the strong presumption favoring public access.

Subdivision(5) of the rule states that a motion to seal may be filed before or contemporaneously with another filing that relies on the documents to be sealed, BUT if the court subsequently denies the motion to seal, the documents will be unsealed unless the party relying on the document, after notifying opposing counsel, files a notice to withdraw the documents within 2 days of the court's order denying the motion to seal. (**practice tip** it appears that only the party relying on a document may withdraw it from consideration and avoid public disclosure) Withdrawn documents may not be referred to in pleadings. Parties are encouraged to file motions to seal documents well in advance of any motion relying on them.

**Practice Tip** see changes to Rule 7 below regarding noting motions to seal under Rule 5(g).

(NEW RULE) CR 5.2. Redactions of Filings

Parties shall refrain from including any of the following in any public document, dates of birth, names of minor children, social security numbers, tax I.D. numbers, financial account numbers, passport numbers. In Social Security Appeals Cases, and Immigration Cases, the entire administrative record can be filed under seal.

CR 7. Pleadings allowed; Form and Scheduling of Motions

The most important change here involves motion to seal documents, you can't note these up as stipulated motions anymore, to be considered on the same day as they are filed. Rule 7(d)(2) adds motions to seal under Rule 5(g) to the list of motions that must be noted up for consideration no earlier than seven judicial days after filing.

As for service of motions, the rule has been clarified to say that the electronic filing procedures govern service, and there is not need to obtain agreement to serve documents electronically.

Under Subdivision (e)(3), filing multiple summary judgment motions "to avoid the page limits of this rule" is strongly discouraged and successive motions may be stricken.

**Practice Tip** Many intellectual property cases have facts calling for the filing of multiple summary judgment motions. In a patent case it is not uncommon to see separate motions concerning invalidity, infringement, and damages. Be sure to raise this in the Rule 26(f) conference and consider informing the Court that the parties expect to file separate motions for summary judgment on separate issues, and that the parties believe that this is a case where it makes sense to file multiple dispositive motions. Under the new Supplemental Patent Rules, there is provision in Patent Rule 110 calling for the discussion of any modification to local rule. This is a good place to discuss potentially filing multiple dispositive motions.

Subdivision (g) has been modified to require a "notice of intent to file surreply" as soon after receiving the reply brief. This new procedure eliminates the need to notify chambers and the opposing party of your intent to file a surreply under the rule. Surreplies are still limited to requests to strike material in (or attached to) the reply brief.

The rule was also clarified that Rule 7(g) does not limit a party's ability under the Federal Rules to file motions to strike, including motions under FRCP 12(f) to strike materials in the "pleadings" as defined by FRCP 7(a).

Motions for reconsideration under Rule 7(h) must be filed within ten judicial days after the order to which the motion relates "is filed." This cleared up some ambiguity in the old rule as to whether time to file a motion for reconsideration started to run from the day the order was served, signed, or filed.

CR 10. Form of Pleadings, Motions and other Filings

Citations to the court record must include a docket number.

"All exhibits must be marked to designate testimony or evidence referred to in the parties' filings" Acceptable forms include highlighting, bracketing, underlying, etc. Must be clear, text must remain legible.

If you change address (physical or email) you must notify the Clerk's office within 10 days of the change.

CR 55. Default; Default Judgment

The change to the rule is actually no change to what is already law for obtaining a default judgment, the Court (probably after having so many mistakes) simply thought it necessary to say that in order to obtain a default judgment, one must first move for entry of default under CR 55(a).

CR 72. Magistrate Judges; Pretrial Orders

Objections to a Magistrate's ruling on nondispositive matters must be noted for consideration on the day filed. No response is necessary unless requested.

NVIDIA Settles Patent Dispute with Implicit Networks

Santa Clara-based NVIDIA Corporation, manufacturer of graphics-processor technologies for workstations, desktop computers, and mobile devices, settled a patent dispute today with Implicit Networks. Implicit is a small, Seattle-based company involved in computer software and licensing. Implicit is taking on some of technology's biggest companies, including the likes of Intel and AMD.

Implicit's case against Intel, NVIDIA and others involves US Patent No. 6,629,163 covering "A method and system for demultiplexing a first sequence of packet components to identify specific components wherein subsequent components are processed without re-identifying components." This is basically, a system for processing encrypted data. According to allegations in the Complaint, this technology is used in Intel's Viiv platform, the Java Media Framework, ATI Radeon hardware, software from NVIDIA called Stant, and other products.

Details of NVIDIA's settlement with Implicit remain confidential, or at least I don't have any information about it other than what is in this post.

order%20dsmsing%20NVIDIA.pdf

Western District Adopts Supplemental Patent Rules

From the Court's ECF system today:

Please be advised that the court has adopted changes to its local general and civil rules. The court has also adopted supplemental patent rules. These changes to the local rules, as well as the supplemental patent rules, will take effect at 12:01 a.m. on January 1, 2009, and will apply to cases then pending and to cases filed after January 1st. Please visit the court's web site for copies of the rules. Thank you.

Here is a link to the supplemental patent rules for this district.