TikTok: Federal Circuit Follows Fifth Circuit, Transfers Case for Witness Convenience | McDermott Will & Emery
In the first mandamus decision applying the US Court of Appeals for the Fifth Circuit’s new transfer motion guidelines under 28 U.S.C. 1404(a), the Federal Circuit followed suit and transferred a case for witness convenience. In re Samsung Elecs. Co., Ltd., Case No. 2023-146 (Fed. Cir. Dec. 14, 2023) (nonprecedential) (Prost, Hughes, Stoll, JJ.) (per curiam).
DoDots Licensing sued Samsung in the US District Court for the Western District of Texas (WDTX), alleging that Samsung phones and tablets infringed three DoDots patents. Samsung moved to transfer the case to the Northern District of California (NDCA). The applicable Fifth Circuit law allows for transfer only when the movant shows that the transferee forum is “clearly more convenient” than the transferor forum, which is determined by assessing a series of private and public interest factors. Echoing three of those factors, Samsung argued the following:
- The teams that developed the allegedly infringing functionalities resided in NDCA and Korea.
- Important third-party witnesses could be compelled to testify in NDCA but not in WDTX.
- There was no meaningful connection between WDTX and the events giving rise to the suit.
Judge Albright denied the motion to transfer. He found that two factors weighed in favor of transfer: the ability to compel witness testimony and NDCA’s local interest in the case. However, Judge Albright also found that two factors weighed against transfer: WDTX was more convenient for certain witnesses, and DoDots’ co-pending and related lawsuits in WDTX meant that practical problems would arise if this case was transferred. The district court further determined that any remaining factors were neutral. Weighing all factors, the district court denied Samsung’s transfer motion, finding that Samsung had not shown that NDCA would be “clearly more convenient.”
Samsung filed a petition for writ of mandamus to the Federal Circuit, seeking to have the Court direct WDTX to transfer the case to NDCA. The sole question presented was whether, under Fifth Circuit law, the district court erred in refusing to transfer the case.
The Federal Circuit determined that the district court had clearly abused its discretion and that failing to transfer the case to NDCA had led to a “patently erroneous result.” The Federal Circuit found that the two factors that the district court determined weighed against transfer instead weighed in favor of transfer.
First, the Federal Circuit explained that the district court erred in finding that the “willing witness” factor weighed against transfer. Various Samsung entities had 10 relevant employees in NDCA and 20 in Korea. DoDots, in contrast, pointed to no potential technical or key witnesses in WDTX, although there were some Samsung marketing employees in Eastern Texas. The district court found that this weighed against transfer because any added travel from California to Texas for these technical witnesses was only a “slight” inconvenience. This argument echoed the argument that the Fifth Circuit rejected in its recent ruling in In re TikTok. In that case, the Fifth Circuit found on very similar facts that it was an “immense inconvenience” for the “majority of relevant witnesses” from Korea and parts of California to travel not just to NDCA, but to Texas. This level of difficulty for witnesses with technical information could not be outweighed by a few employees with nonspecialized knowledge who resided in the transferor state.
Second, the Federal Circuit found that the district court erred in finding that the “practical problems” factor weighed against transfer. DoDots argued—and the lower court agreed—that DoDots’ co-pending lawsuits against two other companies in WDTX justified denial of transfer. However, the Federal Circuit noted that the lower court had stayed the claims against one of the companies pending the Samsung case and had granted the other company’s motion to transfer its case to NDCA on the same day it denied Samsung’s motion to do the same. Under the circumstances, the Court determined that there was no basis for finding that practicalities weighed against transfer. Instead, they weighed in favor of transfer.
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