Venue Transfer Controversy in the Eastern District of Texas

Patent litigation is big business in the Eastern District of Texas. Nationwide, it is one of the most preferred venues to file a patent lawsuit, and it is the home of many big judgments against tech giants such as Microsoft and Apple. But recently there has been a push by big defendants to transfer venue, presumably because of frequent large judgments against these defendants. The vehicle for these transfers is 28 U.S.C. § 1404(a), which provides for venue change “[f]or the convenience of parties and witnesses, in the interest of justice.” The Fifth Circuit considers factors of private convenience and public judicial economy in determining whether a venue transfer is proper.¹

Recently, the Eastern District denied venue transfer in ColorQuick, LLC v. Vistaprint Ltd. despite the fact that none of the parties resided in Texas.² The court concluded that judicial economy outweighed the convenience that the transfer might afford. In contrast, the Federal Circuit held that the Eastern District’s denial of venue transfer in Mediostream, Inc. v. Microsoft Corp. was an abuse of discretion despite the fact that the plaintiff had an office in Texas (albeit an office with no employees).³ There, the court stated that the Western District of Washington was a more convenient and fair trial venue, and that the Eastern District abused its discretion by denying the transfer. These inconsistent results should leave patent practitioners wondering about the future of venue transfers from the Eastern District of Texas.

Should the Eastern District grant more venue transfers? There are good arguments on both sides of the debate. On one side, defendants argue that they should have the freedom to transfer venue to places more convenient—and arguably more fair for trial—than the Eastern District of Texas. On the other hand, plaintiffs argue that they should be able to choose the venue to right the alleged wrongs that have befallen them. And many who live in the Eastern District argue that having such a specialized venue is great for the local economy. One thing is for sure, if venue transfers become frequent, the business of patent litigation in Texas will change.

1. See In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008).

2. See ColorQuick, LLC v. Vistaprint Ltd., 2010 WL 5136050 (E.D. Tex. July 2010), aff’d sub nom. In re Vistaprint Ltd., 628 F.3d 1342 (Fed. Cir. 2010).

3. See In re Microsoft Corp., 2011 WL 30771 (Fed. Cir. 2011), vacating Mediostream, Inc. v. Microsoft Corp., 2009 WL 3161380 (E.D. Tex. 2009).