The Location of Witnesses and Relevant Evidence Still Reigns Supreme in Venue Decisions
In In Re: Juniper Networks, Inc., Appeal No. 21-160, the Federal Circuit held that a party’s general presence in a forum is an insufficient reason to deny transfer when the majority of witnesses and relevant evidence are in the desired venue.
WSOU Investments LLC (“Brazos”) sued Juniper in W.D. Tex. for patent infringement. Juniper moved to transfer venue to N.D. Cal. under 28 U.S.C. § 1404(a) based on the fact that its headquarters and relevant operations are in Sunnyvale, CA and its argument that Brazos conducted little to no business in W.D. Tex. Specifically, Juniper argued that Brazos described itself as a “patent assertion entity,” had only recently opened an office in W.D. Tex., had only one of its officers in Texas, had two of its officers, its CEO, and its president in California, and that the agreement assigning to Brazos much of its patent portfolio listed a California address for Brazos. Brazos countered that it had two employees in the W.D. Tex. office and Juniper had a small office in W.D. Tex. as well. However, Juniper represented that its Texas office had no involvement with the accused products and that office was closed shortly after the action was filed.
Judge Albright denied the motion for transfer, finding Jupiter failed to “sufficiently differentiate” exactly where relevant documents were located, neither party claimed witnesses were unwilling to testify, the convenience of witnesses is entitled to little weight given the parties’ control over their witnesses, both parties had business in W.D. Tex., Juniper failed to show the accused product development occurred entirely in the N.D. Cal., and the W.D. Tex. would reach trial more quickly than the N.D. Cal.
The Federal Circuit vacated Judge Albright’s Order, finding an abuse of discretion, and directed transfer to N.D. Cal. under 28 U.S.C. § 1404(a). The Federal Circuit reaffirmed that the convenience of witnesses, whether party witnesses or not, is “probably the single most important factor” in the analysis, and in this case 11 witnesses were in N.D. Cal. while only one was in W.D. Tex. The Court also held Juniper’s general presence in W.D. Tex. was not enough to establish a local interest when the majority of the relevant evidence was in N.D. Cal., the fact that some evidence might be in neither forum does not weigh against transfer, and Brazos’s presence in W.D. Tex. appeared recent, “relatively insubstantial,” and looked like forum shopping. Finally, the Court held that court congestion, not aggressive scheduling, was a relevant, though speculative, consideration, but W.D. Tex. and N.D. Cal. showed no significant differences in time-to-trial statistics, and as a patent assertion entity Brazos did not have a threatened market position requiring quick resolution.
Willful Infringement Does Not Require “Wanton, Malicious, and Bad-Faith” Behavior
In Sri International, Inc. v. Cisco Systems, Inc., Appeal No. 20-1685, the Federal Circuit held that applying the proper test for willful infringement, the Federal Circuit reinstated a jury’s willfulness verdict and affirmed the district court’s damages enhancement and attorney-fee award.
SRI International, Inc. (“SRI”) sued Cisco Systems, Inc. (“Cisco”) for patent infringement. A jury found Cisco willfully infringed SRI’s patents and awarded damages. After trial, the district court upheld the jury’s finding of willfulness, doubled the jury’s damages award, and awarded SRI its attorney fees based in part on the finding of willfulness. In a first appeal, the Federal Circuit reversed the jury’s finding of willful infringement before May 8, 2012, and therefore vacated the district court’s decisions regarding willfulness and attorney fees.
On remand, the district court considered whether substantial evidence supported a finding of willful infringement after May 8, 2012. It applied a willfulness standard requiring conduct rising to the level of “wanton, malicious, and bad-faith” behavior. Based on that standard, the district court granted judgment as a matter of law (“JMOL”) of no willful infringement after May 8, 2012, and did not award enhanced damages. However, the district court again awarded SRI its attorney fees, this time without relying on willfulness. Both parties appealed.
In a second appeal, the Federal Circuit reversed the district court’s JMOL of no willful infringement after May 8, 2012. The Federal Circuit clarified that while “wanton, malicious, and bad-faith” behavior warrants enhanced damages, such behavior is not required for a jury to find willful infringement. It noted that, instead, willfulness requires no more than deliberate or intentional infringement. The Federal Circuit also reinstated the district court’s original enhancement doubling the jury’s damages award. It noted the original enhancement applied only to damages sustained after May 8, 2012 and found that the district court had properly considered the issue before the first appeal. Lastly, the Federal Circuit affirmed the district court’s award of attorney fees to SRI based on a litigation strategy by Cisco that the court described as “aggressive.”
Serial Post-Grant Review Filings and the Limits of PTO Discretion Under §325(d)
In In Re: Vivint, Inc., Appeal No. 20-1992, the Federal Circuit held that even when a request for ex parte reexamination raises a substantial new question of patentability, the Patent Office can exercise its discretion to deny the request under 35 USC § 325(d) where the petitioner has engaged in a pattern of filing “similar, serial challenges to the same patent.”
Accused patent infringer Alarm.com filed a request for ex parte reexamination of Vivint’s patent after the Patent Office had previously denied institution of Alarm.com’s three petitions for inter partes review of the same patent. The Patent Office denied the third IPR petition because it reflected Alarm.com’s “undesirable, incremental petitioning” practice of using prior Board decisions as a roadmap to correct past deficiencies. Although Alarm.com’s subsequent reexamination request largely “repackaged” arguments from its third IPR petition, the Patent Office ordered reexamination. The examiner ultimately rejected all claims, and Vivint appealed to the Board. The Board affirmed. Vivint appealed to the Federal Circuit.
The Federal Circuit vacated and remanded with instructions for the Patent Office to dismiss the reexamination. The Federal Circuit agreed with the Board that Alarm.com’s “repackaged” arguments raised a “substantial new question of patentability” as required under 35 U.S.C. § 303(a). The Federal Circuit held that a question of patentability is new until it has been considered and decided on the merits. Because the Patent Office denied the third IPR petition based on Alarm.com’s abusive filing practices, the arguments in that petition were never addressed on the merits.
Nonetheless, the Federal Circuit held that the Patent Office abused its discretion and acted arbitrarily and capriciously by ordering reexamination of Vivint’s patent. Under § 325(d), the Patent Office has discretion to deny a petition for IPR or a request for reexamination where “the same or substantially the same prior art or arguments previously were presented to the Office.” The Federal Circuit determined that the Patent Office implicitly exercised this discretion when it declined to institute the third IPR petition based on Alarm.com’s “similar, serial challenges to the same patent.” The Federal Circuit held that, in light of that decision, it was arbitrary and capricious for the Patent Office to subsequently grant the same petitioner’s “nearly identical reexamination request.”
The Federal Circuit emphasized that its ruling is narrow and does not stand for a blanket bar on reexamination where a particular challenger has engaged in improper serial filing. The Federal Circuit noted that “there can be a public interest in reexamination that goes beyond the interest, or propriety of behavior, of a particular challenger.” This public interest, the court explained, is reflected in the Director’s authority under § 303(a) to launch a reexamination “[o]n his own initiative.” Such authority, however, was not at issue in the present case.