IP Law Daily, PATENT—Fed. Cir.: Mandamus granted to vacate Texas court’s order denying FedEx’s transfer motion, (Oct 19, 2022)

By Kevin M. Finson, J.D.

Instead of directing transfer to the Western District of Tennessee, the order remanded the case for further proceedings and explanation of findings.

The U.S. Court of Appeals for the Federal Circuit has granted FedEx Corporate Services’ petition for a writ of mandamus vacating the Eastern District of Texas’s order denying transfer to the Western District of Tennessee because the district court failed to provide a sufficient explanation for its conclusions regarding the witness-related factors and erred in its analysis of the local interest factor by treating the plaintiff’s ephemeral presence in the transferor forum as equivalent to the defendant’s development of the accused products in the transferee forum. The Federal Circuit was unable to conduct mandamus review on the present record. Instead of directing transfer to the Western District of Tennessee, the order remanded the case for further proceedings and reconsideration of the willing witness and compulsory process convenience factors (In re FedEx Corporate Services, Inc., October 19, 2022, per curiam).

R2 Solutions LLC (R2) sued FedEx Corporate Services, Inc. (FedEx) for patent infringement in the Eastern District of Texas. R2’s only connection to that forum appeared to be a small office suite established shortly before the suit was filed, shared with numerous other companies, and in which no officer or employee regularly worked. FedEx moved to transfer to the Western District of Tennessee, where it was headquartered and where the accused products were developed. The trial court denied the motion to transfer. FedEx petitioned the Federal Circuit for a writ of mandamus directing the trial court to transfer the case.

Local interest. The trial court had held that the local interest factor was neutral because the Western District of Tennessee had a significant local interest as the place where the accused products were developed and where the infringement occurred, and the Eastern District of Texas had an interest as a result of R2’s presence in the district. The Federal Circuit held that R2’s presence in the Eastern District of Texas was ephemeral: it had no employees there and possessed only an office suite shared with many other companies and which was obtained shortly prior to filing suit. Treating a recent, ephemeral, and litigation-related presence as equivalent to the interest of the place in which the events that gave rise to the suit occurred was an abuse of discretion.

Witnesses. With regard to the witness-related factors, the Federal Circuit held that the trial court failed to give a sufficient explanation for its decisions. The parties disputed whether a large number of identified witnesses actually possessed relevant information. This dispute included a conflicting declaration about who actually worked on the patented invention and the accused system. The trial court made no findings of fact about these issues, but merely compared the number of identified witnesses. Even just comparing numbers did not explain the court’s conclusion, because the court appeared to find that there were 10 willing witnesses in each potential forum, but also that there were more willing witnesses in Texas.

Finding itself unable to effectively review the trial court’s findings on the existing record, the Federal Circuit vacated the denial of FedEx’s motion to transfer and remanded the case for further proceedings with instructions to the trial court to provide adequate explanation of its findings on each factor and reconsider its decision in light of those findings.

The case is No. 22-156.

Attorneys: Jeffrey A. Berkowitz (Finnegan, Henderson, Farabow, Garrett & Dunner, LLP) for FedEx Corporate Services, Inc. Edward R. Nelson, Lll (Nelson Bumgardner Conroy PC) for R2 Solutions LLC.

Companies: FedEx Corporate Services, Inc.; R2 Solutions LLC

Cases: Patent FedCirNews TexasNews