IP Law Daily, PATENT—Fed. Cir.: Haptic’s infringement suit against Apple will stay in Northern California, (Jun 26, 2024)

By Jonathan Anderson

In denying Haptic’s petition for to transfer the case back to Texas, the Federal Circuit considered sources of proof, cost of attendance for willing witnesses, the local interest factor, and court congestion.

A patent infringement lawsuit by Haptic, Inc., against Apple Inc. will stay in the Northern District of California (N.D. Cal.), the U.S. Court of Appeals for the Federal Circuit has held. In reviewing the denial of a petition for writ of mandamus to retransfer the case back to the Western District of Texas (W.D. Tex.), the appeals court concluded that the district court did not clearly abuse its discretion to produce a patently erroneous result. The Federal Circuit noted that relevant Apple employees are in N.D. Cal., the burden on potential witnesses would be materially less if the case is adjudicated in N.D. Cal., and the local interest factor favors N.D. Cal. The appeals court also found acceptable the district court’s consideration of court congestion (In re Haptic, Inc., No. 24-121 (Fed. Cir. June 25, 2024)).

Background. Haptic, Inc. sued Apple in W.D. Tex. alleging that the “back tap” feature on iPhones infringes Haptic’s patent for gesture detection systems. Pursuant to 28 U.S.C. § 1404(a), Apple sought to transfer the case to N.D. Cal. and the district court granted the motion after analyzing the public- and private-interest factors under § 1404(a). The court found three factors weighed in favor of transfer: much of the evidence is in N.D. Cal.; most Apple employees who worked on the allegedly infringing technology are in N.D. Cal.; and the creation of the accused product took place largely in N.D. Cal. Haptic subsequently petitioned the Federal Circuit for a writ of mandamus directing the district court to vacate the order and return the case to W.D. Tex.

Standard. Under Fifth Circuit law, a transfer should be granted when a movant demonstrates “the transferee venue is clearly more convenient.” In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc). On mandamus, a reviewing court will disturb a transfer decision only when there is a “clear” abuse of discretion that produced a “patently erroneous result.” Id.

Sources of proof. The Federal Circuit said the district court did not clearly err in relying exclusively on source code and other electronic sources of proof to find that this factor favors transfer to N.D. Cal. Such information was restricted within Apple to employees located in N.D. Cal. and outside of W.D. Tex.

Cost of attendance for willing witnesses. The Federal Circuit said it has no reason to second guess the district court’s determination that on balance, the burden on potential witnesses would be materially less if the case were transferred to N.D. Cal. Apple submitted sworn declarations that several employees with relevant knowledge are in N.D. Cal. or would find the transferee venue more convenient. No Apple employee in W.D. Tex. appeared to have relevant and material information. Haptic identified two of its own potential witnesses in W.D. Tex. and one potential witness in Houston.

Local interest factor. The Federal Circuit said the district court reasonably concluded that the local interest factor favors transfer to N.D. Cal. because at least part of the design and development of the accused products occurred in the N.D. Cal. and not in W.D. Tex. Haptic relied on a 2016 meeting between its predecessor and Apple in Houston to argue willfulness; Haptic also said it developed its own technology in W.D. Tex. However, the Federal Circuit said the district court did not clearly err in refusing to find these facts establish a comparable local interest in W.D. Tex. The district court noted that the meeting occurred outside of W.D. Tex. and the lawsuit arose not from Haptic’s creation of its own product but from Apple’s creation of the accused product.

Court congestion. Haptic relied on the district court’s statement that “the undersigned has a particularly busy civil caseload” as a partial basis for the mandamus petition, citing In re Clarke, 94 F. 4th 502, 515 (5th Cir. 2024). However, the Federal Circuit said the “comparison is inapt.” The Fifth Circuit in Clarke granted mandamus to reverse transfer, concluding that “transfer cannot be granted solely because of court congestion.” But the Federal Circuit explained that no other transfer factors weighed specifically in favor of transfer in Clarke. In the instant case, the district court weighed court congestion as neutral or “slightly in favor of transfer at best” and “reasonably found several other factors favored transfer.”

The Case is No. 24-121.

Judge: Stoll, K.

Attorneys: Brian Melton (Susman Godfrey LLP) for Haptic, Inc. Melanie L. Bostwick (Orrick, Herrington & Sutcliffe LLP) for Apple Inc.

Companies: Haptic, Inc.; Apple Inc.

Cases: Patent CaliforniaNews FedCirNews TexasNews