Patent Case With No Ties to Eastern District of Texas Should Be Transferred: Federal Circuit | Practical Law

Patent Case With No Ties to Eastern District of Texas Should Be Transferred: Federal Circuit | Practical Law

On October 3, 2013, in In re TOA Technologies, Inc., the US Court of Appeals for the Federal Circuit granted a petition for a writ of mandamus vacating the lower court's denial of TOA's motion to transfer venue from the Eastern District of Texas to the Northern District of Ohio.

Patent Case With No Ties to Eastern District of Texas Should Be Transferred: Federal Circuit

by Practical Law Intellectual Property & Technology
Published on 07 Oct 2013USA (National/Federal)
On October 3, 2013, in In re TOA Technologies, Inc., the US Court of Appeals for the Federal Circuit granted a petition for a writ of mandamus vacating the lower court's denial of TOA's motion to transfer venue from the Eastern District of Texas to the Northern District of Ohio.
On October 3, 2013, the US Court of Appeals for the Federal Circuit issued a non-precedential order in In re TOA Technologies, Inc., granting TOA's petition for a writ of mandamus and directing the US District Court for the Eastern District of Texas to transfer venue to the Northern District of Ohio.
CSG Systems, Inc. (CSG) filed a patent infringement suit against TOA in the Eastern District of Texas. CSG is a Delaware corporation and has headquarters in Denver, Colorado. TOA is also a Delaware corporation and has its headquarters in Beachwood, Ohio. TOA moved to transfer venue to the Northern District of Ohio under 28 U.S.C § 1404(a), which allows a district court to transfer a case for the convenience of the parties and witnesses and in the interest of justice.
TOA argued venue should be transferred because the accused product was invented and developed in Beachwood, Ohio, the majority of its witnesses and documents were in Ohio and there was a strong local interest in deciding the matter in Ohio. CSG, on the other hand, argued that several TOA employees lived in Texas, other relevant TOA personnel lived outside of Ohio and the bulk of TOA documents are stored electronically and can be accessed anywhere via the cloud. Additionally, the parties stipulated that neither had ever maintained an office or had any employees in the Eastern District of Texas. Rejecting many of TOA's arguments, the district court held that TOA had not met its burden of demonstrating that Ohio was more convenient than Texas and denied the motion.
On appeal, the Federal Circuit, applying Fifth Circuit law, noted that a motion to transfer venue should be granted if the movant demonstrates that the requested venue is clearly more convenient. In determining whether TOA's motion warranted transfer, the court considered the following factors:
  • The relative ease of access to sources of proof.
  • The cost of attendance for willing witnesses.
  • The availability of compulsory process to secure the attendance of witnesses decided at home.
  • The local interest in having localized interests decided at home.
As to the first factor, the court noted that although many of TOA's documents were stored on the cloud, the district court did not give proper weight to the fact that TOA's physical documents and employee notebooks were located in Ohio. Because neither party is headquartered in Texas and TOA has evidence residing in the Northern District of Ohio, the court held that the district court should have weighed this factor in favor of transfer.
As to the remaining factors, the court also found that the district court did not properly analyze the relative convenience of the requested transfer. For example, the district court did not weigh the convenience of witnesses in favor of transfer even though the parties stipulated that:
  • There were no witnesses residing in the Eastern District of Texas.
  • At least seven expected witnesses reside within 100 miles of the Northern District of Ohio.
  • It would cost approximately twice as much for CSG's witnesses to travel to the Eastern District of Texas as it would to travel to the Northern District of Ohio.
Considering all of the factors, the Federal Circuit concluded:
  • The majority of witnesses would find the Northern District of Ohio less costly and more convenient.
  • The Northern District of Ohio is the only venue where both the physical evidence is located and there is a local interest in the matter, given the local presence of TOA.
  • The Eastern District of Texas has no connection to any witnesses, source of proof or any interest in the case.
Accordingly, the court granted TOA's writ of mandamus and vacated the district court's order denying transfer.
Court document: