Texas Transfer Tales

This post is a round up of some interesting orders the Federal Circuit issued last week. All of these orders involve “emergency” appeals.

Last week the court considered Apple Inc.’s emergency appeal involving a request to transfer a patent infringement case out of the Eastern District of Texas to the Northern District of California, where Apple is located. The suit was filed in Texas over two years ago. SimpleAir tried to convince the trial court that Texas is the right place for the case because Apple’s allegedly infringing technology relating to the generation, processing, and delivery of content, notifications, and updates to mobile devices occurs in Texas (among other states). Apple responded by moving to transfer the case to the location where its potential witnesses and relevant evidence are located.

The trial court took 15 months to rule on the motion, and decided that it shouldn’t be moved to California because another defendant (Research-in-Motion) is “present” in Irving, Texas, 164 miles away from the courthouse. The Federal Circuit thought that Apple should have pressured the trial court to act faster by moving the court to act on its pending transfer motion. If you ask me, that would be a rather bold filing by counsel. Also, the Federal Circuit noted that Apple waited over three months after the trial court denied the motion to appeal that decision, when the case was on the eve of trial.

This order is interesting because there doesn’t seem to be a lot of substance behind the trial court’s decision to keep the case. Also, the idea that a venue is correct as to one defendant when another one has ties to a state is a novel theory. But it seems that ultimately, the Federal Circuit denied the emergency motion because of what it sees as undue delay on Apple’s part in seeking emergency relief.

Stay On

And in other news, the Federal Circuit also rejected SDI Technologies, Inc.’s request to re-stay a patent litigation while the patent sued on was finishing up its stint in the reexamination wing of the Patent and Trademark Office (PTO). The court previously granted a stay in the case to allow time for the reexam to proceed, but the reexam took over a year, so the court lifted it at Bose Corporation’s request.

SDI wanted the stay to remain in place, so it sought the Federal Circuit’s help with an emergency request to reinstate the stay. The problem is that the decision to stay a patent litigation while a related proceeding is moving along at the PTO is a matter of the district court’s discretion. SDI needed to provide clear and undisputable evidence of its right to relief in order to get an emergency motion like this granted. It didn’t, so its request was denied.

You’re Not Going Anywhere, Sir

The law firm of Bryan Cave, LLP asked a Pennsylvania district court to let it withdraw as counsel for Alzheimer’s Institute of America, Inc. (AIA). It wanted out of the litigation because, as the case unfolded, the parties and court learned that the patented technology had been developed by a researcher who was working at the University of South Florida (USF) at the time, and the technology was properly owned by USF. USF became involved in the case when the issue of whether it waived any rights to the invention of its former employee arose during the litigation.

Soon after this twist in the case, Bryan Cave told USF that it is representing the University in unrelated patent prosecution and licensing proceedings. It also told USF that under California law, it could not continue to represent AIA in the litigation without USF’s consent. USF refused to consent to the representation of AIA in the ongoing litigation, so Bryan Cave moved to withdraw as counsel for AIA. In response, AIA opposed this motion through separate counsel.

After reviewing the briefings and arguments on the withdrawal issue, the district court denied the motion to withdraw. It applied Pennsylvania ethics rules and concluded that Bryan Cave could still represent AIA if the court ordered it to do so. It justified this denial based on the potential prejudice that withdrawal would cause for AIA, the likely delay to the case due to the replacement of counsel, and the harm this would cause to the administration of justice by disrupting the flow of the litigation and other pending related cases in other jurisdictions. It also denied USF’s request to send this one issue up to the Federal Circuit for immediate review. So USF filed an emergency motion, asking the Federal Circuit to overturn the trial court’s decision.

The Federal Circuit concluded that the district court’s assessment of the situation was proper, as was its decision to apply the Pennsylvania ethics rules. Interestingly, the court noted that even if a court finds that counsel has violated the Pennsylvania Rules of Professional Conduct, disqualification is not mandatory, merely discretionary.

This is a fascinating and pragmatic discussion of the conflict conundrum many large law firms regularly face. Here’s the USF order, in case you want to read it.