selecting a patent suit venue
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Selecting a Patent Suit Venue
Ann G. FortJuly 27, 2011
©2011 Sutherland Asbill & Brennan LLP
GENERALLY RECOGNIZED FACTORS IN SELECTING A VENUE FOR PATENT INFRINGEMENT LITIGATION
• Venue statute• Personal jurisdiction over the defendant• Plaintiff’s “home court advantage”• “Pro-patent” jurisdiction
©2011 Sutherland Asbill & Brennan LLP
PATENT VENUE: 28 U.S.C. § 1400(b)
• “Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. § 1400(b).
• “For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction.” 28 U.S.C. § 1391(c) (emphasis added).
• VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), cert. den. 499 U.S. 922 (1990): patent infringement venue is proper v. a corporation wherever it is subject to personal jurisdiction.
©2011 Sutherland Asbill & Brennan LLP
PERSONAL JURISDICTION OVER OUT-OF-STATE DEFENDANT
• Fed. Cir law controls• Test: Satisfy forum state's long-arm statute + satisfy federal due
process. • Most states interpret long-arm statutes to be co-extensive with
due process, so test collapses down to familiar “minimum contacts” test under Int’l Shoe, Burger King:
• “The Federal Circuit applies a three prong test to determine if specific jurisdiction exists: (1) whether the defendant purposefully directed activities at residents of the forum; (2) whether the claim arises out of or relates to those activities; and (3) whether assertion of personal jurisdiction is reasonable and fair.”
• Nuance Comm. v. Abbyy Software House, 626 F.3d 1222 (Fed. Cir. 2010)
©2011 Sutherland Asbill & Brennan LLP
TYPICAL GROUNDS FOR PERSONAL JURISDICTION
• Stream of Commerce theory – World Wide Volkswagen, Asahi Metals
• Other contacts in jurisdiction – sometimes a close call (trade shows)
©2011 Sutherland Asbill & Brennan LLP
STREAM OF COMMERCE
• Sufficient to show (1) placing a product in the stream of commerce; (2) with the expectation that it would be purchased in the forum state.
• Nuance Comm. v. Abbyy Software House, 626 F.3d 1222 (Fed. Cir. 2010): Due process satisfied where foreign manufacturer contracted with in-state distributor.
• Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994): Due process satisfied based on shipping 52 fans to a retailer with 6 outlets in the forum state.
• NOTE: Some states’ long-arm statutes do not support this, e.g., NY Stephan v. Babysport, LLC, 499 F. Supp. 2d 279 (E.D.N.Y. 2007).
©2011 Sutherland Asbill & Brennan LLP
TRADE SHOW JURISDICTION
• Minimum contacts shown: multiple attendance/exhibition at trade shows in forum state
• Jurisdiction not unreasonable: no compelling burden on defendants; “their admitted presence at numerous trade shows in Nevada indicates that, despite their arguments to the contrary, neither company faces a particularly onerous burden in defending itself in Nevada.”
• Patent Rights Protection Group, LLC v. Video Gaming Technologies, Inc., 603 F.3d 1364 (Fed. Cir. 2010).
©2011 Sutherland Asbill & Brennan LLP
NON-U.S. DEFENDANTS
• But venue for a foreign corporation is proper “in any district.” 28 U.S.C. § 1391(d); Brunette Mach. Works Ltd. v. Kockum Indus., Inc., 406 U.S. 706 (1972);
• Fed. R. Civ. P. 4(k)(2) (jurisdiction can be based on contacts with U.S. as a whole if contacts with any single state not sufficient).
©2011 Sutherland Asbill & Brennan LLP
PLAINTIFF’S “HOME COURT ADVANTAGE”
• Lower costs litigating at home• Well-known employer/corporate citizen may hope for
a sympathetic judge/jury by suing in home city.
BUT• Public opinion is a fickle thing. A layoff or factory
closing can turn that opinion against the plaintiff overnight.
• Famous ≠ Beloved: The 19 Most Hated Companies in America, The Atlantic, July 3, 2011 (banks, utility/cable companies, hotels, airlines, insurance companies, Facebook/Myspace)
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TRAITS OF “PRO-PATENT” VENUE
• Patent owner’s goal – WIN • Injunction, damages or both
©2011 Sutherland Asbill & Brennan LLP
TRAITS OF A WINNING JURISDICTION
• High likelihood of granting injunction• Low likelihood of defense summary judgment• Speedy trial• High damage awards
©2011 Sutherland Asbill & Brennan LLP
SOURCES OF INFORMATION
• University of Houston Law Center Institute for Intellectual Property & Information Law: Patstats.org
• Stanford Intellectual Property Litigation Clearinghouse, www.lexmachina.org
• Mark A. Lemley, Where to File Your Patent Case, 38 AIPLA Quarterly Journal Fall 2010 1 (2010) (analyzing data from Stanford IPLC)
• IPO, The IP Record• Legal Metric research service reports
©2011 Sutherland Asbill & Brennan LLP
ARE POPULAR PLAINTIFFS’ DISTRICTS REALLY “BEST” DISTRICTS?
©2011 Sutherland Asbill & Brennan LLP
OVERALL RESULTS IN PATENT LITIGATION, 2000-2010
Per Lemley, contested cases resulted in overall patentee win rate of 32.5%
©2011 Sutherland Asbill & Brennan LLP
MOST POPULAR VENUES 2000-2010
Table 1: Number of Patent Cases Litigated in Districts with 25 or More Outcomes
District Total
Central District of California 2289
Northern District of California 1424
Northern District of Illinois 1233
Eastern District of Texas 1024
Southern District of New York 1018
District of Delaware 1017
District of New Jersey 987
District of Minnesota 600
District of Massachusetts 584
Southern District of California 519
Source: Lemley, Where to File
©2011 Sutherland Asbill & Brennan LLP
MOST POPULAR VENUES 2010
Table 2: Number of Patent Cases 2010
District Total
Eastern District of Texas 446
District of Delaware 273
Northern District of Illinois 249
Central District of California 231
Northern District of California 184
District of New Jersey 164
Southern District of New York 132
Northern District of Ohio 80
District of Massachusetts 78
Eastern District of Virginia 69
Source: IPO, The IP Record 2011
©2011 Sutherland Asbill & Brennan LLP
MOST POPULAR VENUES 2000-2010 – PATENTEE WIN RATE
Table 3: Patentee Win Rate in Districts with 25 or More Outcomes
DistrictClaimant Win Percentage
Northern District of Texas 55.1%
Middle District of Florida 46.3%
District of Nevada 46.2%
District of Delaware 45.3%
District of Oregon 45.2%
Eastern District of Texas 40.3%
Eastern District of Missouri 40.0%
District of Massachusetts 38.4%
Southern District of New York 37.0%
Central District of California 36.3%
Source: Lemley, Where to File
©2011 Sutherland Asbill & Brennan LLP
OVERALL TRIAL RATE 2000-2010
• Per Lemley – 2.8% of patent cases reached trial• More trials – fewer settlements, defense SJs• Faster trials = money/injunction sooner; pressure
leading to settlements
©2011 Sutherland Asbill & Brennan LLP
MOST POPULAR VENUES 2000-2010 – TRIAL RATE
Table 4: Percentage of Patent Cases that Result in Trial in Districts with 25 or More Outcomes
DistrictPercentage to Trial
District of Delaware 11.8%
Eastern District of Texas 8.0%
Western District of Wisconsin 7.4%
Eastern District of Virginia 6.4%
District of Massachusetts 6.2%
Southern District of Florida 4.4%
Eastern District of Missouri 4.1%
Western District of Texas 4.0%
Middle District of Florida 4.0%
Southern District of Texas 3.5%
Source: Lemley, Where to File
©2011 Sutherland Asbill & Brennan LLP
MOST POPULAR VENUES 2000-2010 – TIME TO TRIAL
Table 5: Districts with 25 or More Outcomes, Sorted by Time to Trial
DistrictTime to Trial (years)
Western District of Wisconsin 0.67
Eastern District of Virginia 0.96
Southern District of Florida 1.66
Middle District of Florida 2.00
District of Delaware 2.03
District of Oregon 2.07
Eastern District of Texas 2.13
Western District of Washington 2.19
District of Maryland 2.22
Northern District of Texas 2.26
Source: Lemley, Where to File
©2011 Sutherland Asbill & Brennan LLP
“BEST” VENUES 2000-2010 – AGGREGATED FACTORS
Table 6: Aggregate Ranking of Districts
DistrictClaimant Win Percentage Ranking
Percent to Trial Ranking
Time to Resolution Ranking
Time to Trial Ranking
Aggregate Ranking
Middle District of Florida 2 9 6 4 21Eastern District of Virginia 14 4 2 2 22District of Delaware 4 1 15 5 25Southern District of Florida 18 6 4 3 31Western District of Wisconsin 28 3 1 1 33Northern District of Texas 1 17 10 10 38Eastern District of Texas 6 2 28 7 43Western District of Texas 11 8 11 16 46District of Oregon 5 11 25 6 47Eastern District of Missouri 7 7 18 15 47Source: Lemley, Where to File
©2011 Sutherland Asbill & Brennan LLP
DAMAGE AWARDS
Table 7: Distribution of 25 Highest Awards, 2005 – 4/11/2011
DistrictNo. of Top 25 Damage Awards
Eastern District of Texas 12
Northern District of California 2
Southern District of California 2
District of Delaware 2
District of Massachusetts 2
District of Arizona 1
District of Kansas 1
Northern District of New York 1
District of Oregon 1
District of Rhode Island 1
Source: Patstats.org
©2011 Sutherland Asbill & Brennan LLP
“BEST” VENUES v. BIG MONEY
“Best” Venues
M. D. Fla.
E. D. Va.
S.D. Fla.
W. D. Wis.
N. D. Tex.
W. D. Tex.
E. D. Tex (12)
D. Del. (2)
D. Ore. (1)
Most Big $ Awards
N. D. Cal. (2)
S. D. Cal. (2)
D. Mass. (2)
D. Ariz. (1)
D. Kan. (1)
N. D. N. Y. (1)
D. R. I. (1)
©2011 Sutherland Asbill & Brennan LLP
INJUNCTIONS, POST-EBAY (5/15/2006 – 4/11/2011)
• 132 Injunctions granted• 44 Denied
Source: Patstats.org
©2011 Sutherland Asbill & Brennan LLP
INJUNCTIONS IN LEMLEY’S BEST VENUES
Table 8: Grants v. Denials in Top Plaintiffs’ Districts, Post-eBay (ending 4/11/2011)
District Grants Denials
Middle District of Florida 3 2
Eastern District of Virginia 1 2
District of Delaware 11 7
Southern District of Florida 3 0
Western District of Wisconsin 1 1
Northern District of Texas 2 0
Eastern District of Texas 19 9
Western District of Texas 2 0
District of Oregon 3 0
Eastern District of Missouri 0 0
Source: Patstats.org
©2011 Sutherland Asbill & Brennan LLP
OTHER FACTORS
• Experience with technology or other issues in the case
• Patent Local Rules But of Lemley’s Best Venues, only 4 have PLR: E.D. Tex,
W.D. Tex., N.D. Tex., E.D. Mo.
• “Patent Pilot Program” participation Goal: Improve speed & quality by building expertise
©2011 Sutherland Asbill & Brennan LLP
PATENT PILOT PROGRAM DISTRICTS
• Eastern District of New York• Southern District of New York• Western District of Pennsylvania• District of New Jersey• District of Maryland• Northern District of Illinois• Southern District of Florida*
* Lemley Top 10 District
• District of Nevada• Eastern District of Texas*• Northern District of Texas*• Western District of Tennessee• Central District of California• Northern District of California• Southern District of California
©2011 Sutherland Asbill & Brennan LLP
ONCE YOU’RE THERE, CAN YOU STAY?
TRANSFER BASICS:• 28 U.S.C. § 1404(a) – court may transfer to any other district in
which the case could have been brought “for the convenience of the parties, in the interests of justice”
• 28 U.S.C. § 1406(a) – if venue is improper, the district court “shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought”
• Common law forum non conveniens – case can be dismissed if there is another, more convenient forum in another jurisdiction. Bonzel v. Pfizer, Inc., 439 F.3d 1358 (Fed. Cir. 2006) (affirming dismissal in favor of action in Germany enforcing a German license agreement with a German doctor).
©2011 Sutherland Asbill & Brennan LLP
CURRENT TRANSFER TRENDS
• Transfer governed by regional circuit law, not Federal Circuit law.
• In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008)(en banc).
• In re TS Tech, 551 F.3d 1315 (Fed. Cir. 2008): on petition for writ of mandamus, applied; In re Volkswagen and ordered E.D. Tex. to transfer
• Since TS Tech through 2010, at least 14 writs of mandamus sought from E. D. Texas:
Six granted writ for transfer Six denied writ for transfer Two had no decision on the merits
©2011 Sutherland Asbill & Brennan LLP
FACTORS IN TRANSFER ANALYSIS
• Private Interests: Access to proof
Availability of compulsory process for witnesses
Cost of attendance for willing witnesses
Other practical problems making trial “easy, expeditious and inexpensive”
• Public Interests: Impact of court congestion
Local interest in having localized issues decided at home
Forum’s familiarity with governing law
Avoidance of conflict of laws or application of foreign laws
Gulf Oil v. Gilbert, 33 U.S. 501 (1947), cited in In re Volkswagen
©2011 Sutherland Asbill & Brennan LLP
CONCLUSIONS?
• Assuming venue statute, personal jurisdiction satisfied:
Remember - “Past performance is not a predictor of future results” and “Your mileage may vary.” This is not an exact science.
Prioritize your goals
Weight factors toward most important goal
Consider chances of transfer
©2011 Sutherland Asbill & Brennan LLP
QUESTIONS?
Please contact: Ann G. Fort at ann.fort@sutherland.com
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