Access practice tools, as well as industry leading news, customizable alerts, dockets, and primary content, including a comprehensive collection of case law, dockets, and regulations. Leverage...
By Peter Leung
Hughes Network’s Systems LLC’s petition to transfer a patent infringement lawsuit out of an East Texas court has been rejected by the nation’s patent appeals court ( In re: Hughes Network Sys., LLC , Fed. Cir., No. 17-130, petition denied 7/24/17 ).
The U.S. Court of Appeals for the Federal Circuit July 24 refused Hughes’ petition to review its transfer request. The court said the U.S. District Court for the Eastern District of Texas didn’t act unreasonably when it denied Hughes’ motion, which was filed 16 months after the initial complaint and less than two months before trial was scheduled to start.
The court also said that the trial court acted within its discretion in ruling that Hughes had waived its right to file a motion to transfer venue. Hughes filed its motion for the first time after the U.S. Supreme Court’s May 22 ruling in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, which put limits on where patent owners can sue.
The Federal Circuit’s decision, though nonprecedential, provides some insight into how its judges will handle post- TC Heartland motions to transfer. The Supreme Court’s decision was expected to make it easier for defendants to move cases out of venues with patentee-friendly reputations such as the Eastern District of Texas.
Several federal district court judges have denied motions to transfer on the grounds that the defendant, by not filing the motion until after the TC Heartland decision, waived the right to make its venue arguments. However, the Federal Circuit did not weigh in definitively on the waiver issue. The court emphasized that its decision turned largely on the fact that Hughes filed its motion less than two months before trial, and moving the case would be inconvenient.
The court on July 18 accepted another petition to review a rejected motion to transfer venue out of the Eastern District of Texas, in In re Cray, where it could rule on what constitutes a “regular and established place of business” in a district. The Eastern District of Texas had rejected Cray Inc.'s motion because the supercomputer maker had a sales employee who worked out of his home in East Texas.
Hughes’ case centers on the other big question facing courts handling transfer motions: whether a defendant has waived venue arguments by not raising them earlier. Before TC Heartland, some plaintiffs didn’t bother with motions to transfer venue because they likely wouldn’t have succeeded under the Federal Circuit’s interpretation of 28 U.S.C. 1400(b), the patent venue provision.
Hughes did not file its transfer motion until two days after TC Heartland. Judge Robert W. Schroeder of the Eastern District of Texas said the delay wasn’t justified because the TC Heartland decision wasn’t a change in the law—the venue argument was available when Elbit Land Systems LLC, the patent owner, filed its lawsuit. Hughes’ failure to raise the issue earlier is a waiver of the argument, Schroeder ruled.
When the Supreme Court reversed the Federal Circuit in TC Heartland, it suggested that the law regarding venue hadn’t changed for some 30 years, and the Federal Circuit had misinterpreted the case law.
The Federal Circuit said in its ruling that it doesn’t necessarily agree that TC Heartland wasn’t a change in the law, but that Schroeder didn’t abuse his judicial discretion.
Chief Judge Sharon Prost, along with Judges William C. Bryson and Richard G. Taranto jointly issued the order.
Hughes’ lawyers at Baker Botts LLP did not immediately respond to a request for comment. Elbit’s lawyers at Covington & Burling LLP declined to comment.
To contact the reporter on this story: Peter Leung in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Mike Wilczek at email@example.com
Text available at http://src.bna.com/q2g
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)