IP Law Daily, PATENT—Fed. Cir.: Texas district court directed to transfer Uber patent case from Texas to California, (Jul 12, 2021)

By Linda Panszczyk, J.D.

The reasons for not finding judicial economy considerations overrode the clear convenience of the transferee venue applied with even more force in this case.

The U.S. Court of Appeals for the Federal Circuit has again ordered the federal district court in the Eastern District of Texas to transfer a patent infringement action to California. Finding that the district court gave too little weight to the third-party witnesses located in California, the Federal Circuit vacated the district court’s order denying transfer and directed the court to grant Uber’s motion to transfer the case to the U.S. District Court for the Northern District of California. In In re Samsung Electronics Co., the Federal Circuit recently granted mandamus to direct the Western District of Texas to transfer to the Northern District of California two other actions by Ikorongo asserting infringement of two of the same patents against different defendants (In re Uber Technologies, Inc., July 8, 2021, Dyk, T.).

District court's view. In its order denying transfer, the Texas court determined that Uber had failed to establish that this action "might have been brought" originally in Northern California as required under section 1404(a). Specifically, the district court found that the California forum would not be a proper venue under 28 U.S.C. § 1400(b) over Ikorongo Texas’s claims, which were limited to its geographic rights under the asserted patents to certain counties in Texas. In doing so, the district court rejected Uber’s argument that Ikorongo Texas’s recent formation and acquisition of those specified rights from Ikorongo Tech (which shares offices in Northern California and the same ownership and management team as Ikorongo Texas) should be disregarded as mere tactics to avoid transfer. In the alternative, the district court found that Uber had failed to show the Northern District of California was clearly more convenient for trial.

The district court itself recognized that the issues present here are identical to those in Ikorongo’s other cases. As in Samsung, the Federal Circuit indicated, the Western District of Texas erred in this case in concluding that Uber had failed to satisfy the threshold requirement for transfer of venue. The district court’s analysis of the traditional public and private factors in this case is also virtually the same to its analysis in the cases in Samsung. As in this case, Samsung involved cases where the accused technology was researched, designed, and developed in the Northern District of California and the defendants identified several party and non-party witnesses, including two inventors, as residing in the Northern District of California, while no party identified a single witness as residing in or close to the Western District of Texas. Here, Uber is headquartered in the Northern District of California and submitted a declaration identifying over a dozen witnesses residing in the transferee venue that were linked to the development of the accused technology.

Similarity to Samsung case. In Samsung, the Federal Circuit rejected the district court’s conclusion that the willing witness factor weighed only slightly in favor of transfer and stressed that "the incremental gains in keeping these cases in the Western District of Texas simply are not sufficient to justify over-riding the inconvenience to the parties and witnesses." Samsung, moreover, explained that multidistrict litigation procedures could efficiently resolve overlapping invalidity or infringement issues.

In this case, the Federal Circuit saw no basis for a disposition different from the ones reached in Samsung. The district court here relied on the same improper grounds as in Samsung to diminish the clear convenience of the Northern District of California. The reasons for not finding judicial economy considerations to override the clear convenience of the transferee venue also apply with even more force here. Though the district court in this case relied on the co-pending case against Lyft, Inc. as well as Bumble, both of those litigations involve entirely different underlying functionality and the Samsung Electronics Co., Ltd. and LG Electronics Inc. litigations involving that functionality have now been directed to be transferred to Northern California. In addition, the district court clearly erred in negating the transferee venue’s strong local interest by relying merely on the fact that plaintiffs alleged infringement occurred in the Western District of Texas.

The case is No. 21-150.

Attorneys: Mark Andrew Perry (Gibson, Dunn & Crutcher LLP) for Uber Technologies, Inc. Karl Rupp (Nix Patterson, LLP) for Ikorongo Texas LLC and Ikorongo Technology LLC.

Companies: Uber Technologies, Inc.; Ikorongo Texas LLC; Ikorongo Technology LLC

Cases: Patent FedCirNews GCNNews