Case: 23-128 Document: 16 Page: 1 Filed: 06/07/2023
NOTE: This order is nonprecedential.
United States Court of Appeals for the Federal Circuit ______________________
In re: MICROSOFT CORPORATION, Petitioner ______________________
2023-128 ______________________
On Petition for Writ of Mandamus to the United States District Court for the Western District of Texas in No. 6:22- cv-00242-ADA, Judge Alan D. Albright. ______________________
ON PETITION ______________________
Before PROST, REYNA, and STARK, Circuit Judges. PER CURIAM. ORDER Microsoft Corporation petitions for a writ of mandamus vacating the district court’s order denying transfer under 28 U.S.C. § 1404(a) and directing that the case be trans- ferred from the United States District Court for the West- ern District of Texas (“WDTX”) to the United States District Court for the Western District of Washington (“WDWA”). Virtru Corporation responds. We grant the pe- tition.
Case: 23-128 Document: 16 Page: 2 Filed: 06/07/2023 2 IN RE: MICROSOFT CORPORATION
BACKGROUND Virtru brought suit against Microsoft for patent in- fringement in the Waco division of WDTX. Microsoft moved to transfer the case to WDWA under 28 U.S.C. § 1404(a), noting that it is incorporated in Washington and headquartered in WDWA; that WDWA is where Microsoft designed, developed, and worked on implementing accused technology and where the events took place that form the basis of Virtru’s willful infringement allegations; and that neither party had any relevant operations in WDTX. The district court denied the motion, concluding that access to sources of proof and local interest slightly favored transfer; administrative difficulties flowing from court con- gestion disfavored transfer; and the other factors were neu- tral. Of particular note, the court found 27 Microsoft employees in WDWA were potential witnesses (individuals identified by the parties with relevant and material infor- mation). Nonetheless, the court found that the willing wit- ness factor was neutral, citing the fact that Virtru had identified eight potential party witnesses more conven- iently located near (but not in) WDTX. The court also found that Microsoft’s identification of nine potential non- party witnesses in WDWA with information relating to the development of accused technology, prior art, and Virtru’s allegations of willful infringement, was offset by five poten- tial non-party witnesses identified by Virtru within the subpoena power of WDTX. On balance, the court concluded that Microsoft failed to show that WDWA was clearly more convenient than WDTX. Microsoft now petitions this court challenging the dis- trict court’s denial of transfer. We have jurisdiction pursu- ant to 28 U.S.C. §§ 1295(a)(1) and 1651(a). See In re Princo Corp., 478 F.3d 1345, 1351 (Fed. Cir. 2007).
Case: 23-128 Document: 16 Page: 3 Filed: 06/07/2023 IN RE: MICROSOFT CORPORATION 3
DISCUSSION In the § 1404(a) transfer context, where we apply re- gional circuit law (here, the law of the United States Court of Appeals for the Fifth Circuit), In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008), “[w]e review only for clear abuses of discretion that produce patently erroneous results,” In re Volkswagen of Am., Inc., 545 F.3d 304, 312 (5th Cir. 2008) (en banc). The Fifth Circuit has made clear that while “the decision of whether to transfer a case is committed to the district court’s discretion,” In re Planned Parenthood Fed’n of Am., Inc., 52 F.4th 625, 629 (5th Cir. 2022), the district court “should” transfer when a movant “demonstrates that the transferee [forum] is clearly more convenient,” Volkswagen, 545 F.3d at 315. The central dispute in this case is whether WDWA is relatively more convenient for the potential witnesses. See In re Genentech, Inc., 566 F.3d 1338, 1343 (Fed. Cir. 2009) (emphasizing the importance of the relative convenience and cost of attendance for witnesses); § 1404(a) (permitting transfer “[f]or the convenience of parties and witnesses”). *
- • Virtru argues that mandamus is inappropriate be- cause Microsoft, without justification, allowed 69 days to pass between the district court’s transfer decision and the filing of Microsoft’s mandamus petition, and during that interim the district court held a claim construction hearing and construed the disputed claim terms. By the time the petition was filed, only three months remained until the end of fact discovery and less than eight months remained until trial. While we do not find this delay to have been so substantial and prejudicial as to warrant denial of the pe- tition, timing considerations are always relevant when we are asked to grant the extraordinary relief of mandamus. See, e.g., In re Telular Corp., 319 F. App’x 909, 911 (Fed. Cir. 2009) (noting that five-month delay in filing petition weighed against granting mandamus); Peteet v. Dow Chem.
Case: 23-128 Document: 16 Page: 4 Filed: 06/07/2023 4 IN RE: MICROSOFT CORPORATION
The district court found no difference in the comparative convenience to the party witnesses, even though it recog- nized there to be at least 27 such witnesses in WDWA and no such witness in WDTX, because “the only identified Mi- crosoft employees that work on” one of the accused product “team[s] reside in the state of Texas” and that Microsoft did not dispute the relevance of two software engineers who reside in Texas (but outside WDTX). Appx 9. That was a clear abuse of discretion. Such a substan- tial imbalance in witness convenience cannot be negated merely by concluding that the convenience of some poten- tial witnesses is so much more important than for others where, as here, there are no case-specific findings to sup- port such a conclusion, none of those witnesses resides in WDTX, and key witnesses were also found in WDWA, see In re Toyota Motor Corp., 747 F.3d 1338, 1340 (Fed. Cir. 2014). See Volkswagen, 545 F.3d at 317 (“[I]t is an ob- vious conclusion that it is more convenient for witnesses to testify at home” given the costs of “being away from work, family, and community.” (internal quotation marks and ci- tation omitted)). We thus conclude that the district court’s “steep discounting of this factor is unreasonable on the rec- ord;” the court “should have [instead] weighed this factor firmly (not slightly) in favor of transfer.” In re Google LLC, 58 F.4th 1379, 1384 (Fed. Cir. 2023). After correcting for that clear abuse of discretion, con- sideration of the other relevant factors shows that WDWA is a clearly more convenient forum. Almost twice as many non-party potential witnesses were found in WDWA as compared to WDTX, not only making WDWA more conven- ient for the majority of those witnesses but also allowing that court to compel their testimony if necessary. The dis- trict court also found that the access to sources of proof
Co., 868 F.2d 1428, 1436 (5th Cir. 1989) (“Courts have con- sidered a party’s delay in denying a motion to transfer.”).
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factor slightly favors transfer and that “WDWA has a strong local interest,” Appx 32, given that a “number of the events that gave rise to this suit took place in Microsoft’s headquarters in the WDWA,” Microsoft’s prior art system, as well as at least two of the accused functionalities, were “likely designed and developed in the WDWA,” and “the events giving rise to Virtru’s willful infringement allega- tions also likely took place in the WDWA.” Appx 31. The only factor the district court weighed against transfer was court congestion based on a 3- to 7-month time-to-trial dif- ference, but Virtru offers no argument for why that differ- ence should be afforded such great weight as to overcome the other factors weighing in favor of transfer, see Genen- tech, 566 F.3d at 1347. We therefore conclude that denial of transfer here was patently erroneous. “The center of gravity of this action, focusing on the Volkswagen factors and the overriding con- venience inquiry is clearly in the [Western District of Washington]”—where the vast majority of potential wit- nesses with relevant and material information reside, where accused product features were researched, designed, and developed, and where physical evidence is located— “not in the Western District of Texas,” where no party wit- nesses with relevant and material information reside and where no development of either an accused product or a pa- tented invention is alleged to have occurred. See Google, 58 F.4th at 1385. We have considered the parties’ remaining arguments and find that they do not change our decision. Accordingly,
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IT IS ORDERED THAT: The petition is granted. The district court’s order deny- ing transfer is vacated, and the district court is directed to grant the transfer motion. FOR THE COURT
June 7, 2023 /s/ Jarrett B. Perlow Date Jarrett B. Perlow Acting Clerk of Court