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Plaintiff’s Choice of Forum and Defendant’s State of Incorporation Not Dispositive in Venue Transfer Analysis

11-M990
December 02, 2011

Decision icon Decision

Last Month at the Federal Circuit - January 2012

Judges: Rader, Dyk, O'Malley (per curiam)

[Appealed from: D. Del., Judge Robinson]

In In re Link_A_Media Devices Corp., No. 11-M990 (Fed. Cir. Dec. 2, 2011), the Federal Circuit granted Link_A_Media Devices Corp.’s (“LAMD”) petition for a writ of mandamus directing the United States District Court for the District of Delaware to vacate its order denying LAMD’s motion to transfer venue, and to direct transfer to the United States District Court for the Northern District of California.

Marvell International Ltd. (“Marvell”) filed a patent infringement suit against LAMD in the District of Delaware. LAMD is incorporated under the laws of the state of Delaware, but maintains its principal place of business in the Northern District of California, where nearly all of its employees work. None of its employees work in Delaware. Marvell is a Bermuda-based holding company and has a related entity, which is headquartered in the Northern District of California and which employs the inventors of the patents-in-suit and presumably houses all of Marvell’s documents relevant to the suit.

LAMD moved to transfer the case to the Northern District of California pursuant to 28 U.S.C. § 1404(a), which authorizes a district court of proper jurisdiction to nonetheless transfer a case “[f]or the convenience of the parties and witnesses, in the interest of justice.” Slip op. at 2 (alteration in original). The District of Delaware denied LAMD’s motion to transfer and LAMD filed a petition for a writ of mandamus.

Applying Third Circuit law, the Federal Circuit noted that the standard for granting a writ of mandamus “is an exacting one, requiring the petitioner to establish that the district court’s decision amounted to a failure to meaningfully consider the merits of the transfer motion.” Id. at 4. In finding this standard satisfied, the Court noted that the district court did not properly balance the private and public interest factors the Third Circuit considers in a § 1404 transfer analysis. Id. (citing Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995)). Specifically, the Federal Circuit found that the district court “failed to balance those factors fairly and instead elevated two considerations to overriding importance.” Id.

With respect to private interests, the Federal Circuit found that the district court erred by placing far too much weight on (1) Marvell’s choice of forum and (2) LAMD’s incorporation in Delaware. The Court acknowledged that the Third Circuit places significance on a plaintiff’s choice of forum, but “[w]hen a plaintiff brings its charges in a venue that is not its home forum, . . . that choice of forum is entitled to less deference.” Id. Further, neither Jumara nor § 1404 lists a party’s state of incorporation as a factor for a venue inquiry, and it is “certainly not a dispositive fact in the venue transfer analysis, as the district court in this case seemed to believe.” Id. at 5. Finally, the district court erred by not considering two of the private interest factors of Jumara: (1) the convenience of the witnesses and (2) the location of the books and records, each of which favored transfer. “While advances in technology may alter the weight given to these factors,” the Court found it “improper to ignore them entirely.” Id. at 6.

With respect to the public interest factors, the Federal Circuit held that the district court erred when it found that the factors did not favor either forum. The Court noted that the defendant’s state of incorporation should not be dispositive of the public interest analysis. “Aside from LAMD’s incorporation in Delaware, that forum has no ties to the dispute or to either party.” Id. LAMD is headquartered in the Northern District of California, its relevant witnesses and evidence are located there, and while Marvell is incorporated and located in Bermuda, its affiliate, which employs the named inventors, is also located in the Northern District of California, only three miles from LAMD.

Finally, the Court rejected Marvell’s argument that the case should remain in Delaware because Delaware’s judges are highly experienced in patent infringement litigation. Id. at 7. Unlike state law claims, where a trial court’s familiarity with the law is a public interest factor in the venue transfer analysis under Third Circuit law, Marvell’s claims arise under the federal patent laws, for which there is nationwide uniformity and “which the Northern District of California is equally equipped to address.” Id. Further, there was no evidence that Delaware’s experience in patent law meant that patent cases were resolved more quickly there than in the Northern District of California.

Accordingly, the Federal Circuit granted LAMD’s petition for a writ of mandamus and directed the District of Delaware to vacate its order denying LAMD’s motion to transfer venue, and to direct transfer to the Northern District of California.

Summary authored by Adam J. Sibley, Esq.