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Second Patent Case in a Year Ordered Transferred from E.D. Texas
By Stephanie Weiner – Edited by Jad Mills

In re Hoffman-La Roche Inc., et al., No. 911 (Fed. Cir. Dec. 2, 2009)
Slip Opinion

On December 2, 2009, a Federal Circuit panel granted Hoffman-La Roche’s petition for a writ of mandamus ordering the District Court for the Eastern District of Texas to transfer a patent infringement suit brought by Novartis to the Eastern District of North Carolina.  The Federal Circuit found that district court “clearly abused its discretion” in denying petitioners’ motion to transfer the case pursuant to 28 U.S.C. § 1404(a).  This is the second case within the year that the Federal Circuit has ordered transferred out of the Eastern District of Texas on mandamus.  See In re TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir. 2008).

Legal Pad says there was “no earthly reason” for the case to be in the Eastern District of Texas.  Harness, Dickey & Pierce’s legal blog points out that this may portend an easier road for defendants seeking to transfer venue from the Eastern District of Texas, a district considered to be very plaintiff-friendly.  Patently-O summarizes the case.

Novartis sued Roche and its partners in the Eastern District of Texas for patent infringement, based on the defendants’ manufacture of Fuzeon®, a commercial HIV inhibitor drug.  The defendants moved to transfer the case to the Eastern District of North Carolina, where Fuzeon was developed and tested and where the developer’s relevant books and documents are maintained. The District Court for the Eastern District of Texas denied the motion, finding that the case was “decentralized,” with potential witnesses scattered about the country, and that transfer would merely shift inconveniences from those witnesses closer to North Carolina to those witnesses closer to Texas.

Judge Arthur Gajarsa, writing for a three-judge panel, directed the district judge to grant the motion, relying heavily on TS Tech and In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008) (a Fifth Circuit case that similarly granted mandamus directing the Eastern District of Texas court to transfer to a “clearly more convenient” forum).  A writ of mandamus is appropriate if the petitioner demonstrates a “clear and indisputable” right to relief. Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 35 (1980).  The panel found that standard to be met here.  It held that the district court was “patently erroneous” in its application of the test for forum nonconveniens under Fifth Circuit law, and that there was “a stark contrast in relevance, convenience, and fairness between the two venues.”

Among other things, the Federal Circuit found that the district court gave too much weight to its ability to compel the only potential witness in Texas, who was in another district over 100 miles away, and erred in finding that it had “absolute subpoena power” over that witness within the meaning of Volkswagen.  The district court did not assess convenience and fairness to any of potential witnesses, four of whom reside in North Carolina, in its analysis.

The Court of Appeals found that the district judge also disregarded Volkswagen and In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009) in holding that the Eastern District of North Carolina had no more of a local interest in deciding this matter than the Eastern District of Texas.  The panel regarded the former district’s interest in the matter “self-evident,” while seeing no relevant factual connection to the Eastern District of Texas.  While Novartis pointed to 75,000 pages of documents relating to the patent that were in the Eastern District of Texas, the panel determined that the documents were sent there electronically from California purely to manipulate the propriety of venue; it called the assertion that the documents were “Texas” documents a “fiction.”

This decision continues the Federal Circuit trend limiting the Eastern District of Texas’ patent “rocket docket.”

Posted On Dec - 7 - 2009 Comments Off

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