May 30, 2015 | SEARCH

Dallas Attorney Dick Sayles in the Dallas Business Journal

Court rulings could drop allure of ‘rocket docket’

Defendants allowed to move cases from Eastern District

Dallas Business Journal

Two recent appellate court decisions will make it easier for defendants in civil suits in the U.S. District Court’s Eastern District of Texas to move their cases to other venues, experts say.

The Eastern District is one of several hotbeds of patent litigation nationwide because of perceived benefits of speedier trials, expertise of judges in the field and, at least in some quarters, a view that courts there are plaintiff-friendly.

While the expertise of the district’s judges in patent law is not in dispute, local patent lawyers say the venue’s so-called “rocket docket” has slowed as more cases have been filed there, and any supposed tilt toward plaintiffs is more myth than reality.

But this much is crystal-clear: Civil defendants who don’t want to go to the Eastern District’s divisions in Beaumont, Lufkin, Marshall, Sherman, Texarkana or Tyler have a better shot at getting their cases transferred to other venues thanks to two recent decisions. One, dubbed In re Volkswagen of America Inc., became final before the U.S. Court of Appeals for the 5th Circuit in late December and saw a products-liability case moved from Marshall to Dallas. The other, In re TS Tech USA Corp., involved a patent case moved from the Eastern District to the Southern District of Ohio at the October order of the U.S. Court of Appeals for the Federal Circuit, which hears patent appeals.

In both Volkswagen and TS Tech, the appellate panels, in relatively rare moves, reversed Eastern District judges’ refusals to transfer the cases. In both litigations, the appellate panels ruled the cases did not have enough of a link to the Eastern District to warrant being tried there.

In turn, Eastern District judges in the last couple of weeks have shifted two cases from their district — one to California, the other to Oregon — citing the two decisions.

“Prior to these cases, particularly TS Tech, very, very few transfers were granted in the last five or six years,” says Richard A. Sayles, CEO of the Dallas law firm Sayles Werbner.

Sayles was instrumental in winning a change of venue earlier this year from Tyler to Oregon on behalf of Microsoft Corp. in a patent-infringement suit. He says Eastern District judges previously denied change-of-venue requests on the theory that the district had an interest in the determination of a given suit because products that supposedly infringed on a given patent were sold there.

But now, under the recent decisions, the plaintiff’s choice of venue can be given only so much weight in a court’s decision where a case will be tried. In Volkswagen, the appellate panel said other factors to be considered included a range of practical problems, such as the location of evidence and the cost for “willing” witnesses to give testimony.

Michael C. Smith, a partner in the Marshall office of Siebman, Reynolds, Burg, Phillips & Smith LLP, represented the Volkswagen plaintiffs during part of their appeal. Smith says the change-of-venue matter is headed to the U.S. Supreme Court, which will decide in February whether to hear it.

Smith said slightly more than 300 patent-infringement suits were filed in the Eastern District last year, down from 371 in 2007, a drop he attributes to the dour economy.

Veronica Smith Lewis, a partner in the Dallas office of Vinson & Elkins, believes more plaintiffs may have business operations in the Eastern District when they file patent suits there. On the flip side, she adds, “I’d expect that you’d see less of” big companies with no connection to that area taking their patent cases to the Eastern District.

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