The Federal Circuit is charged with disposing of the mandamus petitions that regularly arise from decisions denying transfer under 28 U.S.C. § 1404(a) in Texas patent litigation. The Fifth Circuit, whose law the Federal Circuit applies in such cases, rarely issues precedential transfer opinions—not even one a year over the last fifteen years. Few, if any, bear on the kinds of evidence and arguments commonly offered as part of transfer disputes in modern patent litigation. In In re TikTok, Inc., No. 23-50575, 2023 U.S. App. LEXIS 28880 (5th Cir. Oct. 31, 2023), the Fifth Circuit seized the opportunity to provide guidance on such evidence and arguments in the context of a high-tech intellectual property case not involving patent claims. Its opinion, issued October 31, 2023, will likely impact the availability of transfer for parties in popular Texas patent venues.
The key takeaways from the TikTok opinion are:
The Fifth Circuit granted mandamus and reversed Judge Alan D Albright’s denial of TikTok Inc.’s motion to transfer litigation from the Western District of Texas to the Northern District of California under 28 U.S.C. § 1404(a). The plaintiff is a Chinese company alleging that TikTok’s Chinese engineers took source code the plaintiff shared and used it to develop video-editing functionality that TikTok’s California engineers implemented in its popular app. TikTok, 2023 U.S. App. LEXIS 28880, at *2-3. TikTok petitioned the Fifth Circuit, not the Federal Circuit, for relief from Judge Albright’s denial of transfer because the claims are directed to copyright infringement, trade secret misappropriation, false advertising, and several state law torts—not patent infringement.
The Fifth Circuit analyzed the private and public interest factors set out in In re Volkswagen of America, Inc., 545 F.3d 304 (5th Cir. 2008) (en banc). The relevant holdings on a factor-by-factor basis are below.
Having weighed these factors, the Fifth Circuit summarized the case as one “concern[ing] Chinese intellectual property that was allegedly infringed and misappropriated by employees located in China” and remarked that “[t]he only individuals in the United States who have any documented connection to this dispute are located outside the district.” Id. at *25. It held, therefore, that “[t]he Northern District of California is a clearly more convenient venue to adjudicate this case.” Id.
In concluding, the opinion noted that “the Federal Circuit has reached conflicting outcomes in reviewing mandamus petitions from the Western District of Texas” over the last few months before characterizing the instant opinion as a means to “improve ‘consistency of outcomes’ by further instructing when transfer is—or, for that matter, is not—warranted in response to a § 1404(a) motion.” Id. at *27 & n.15.