The U.S. Court of Appeals for the Federal Circuit has ruled that a party’s verbal notice to the court clerk’s office of a settlement of a patent infringement case was not sufficient to support withdrawal of an order directing transfer of the case. But the court also ruled that the district court did not have to transfer the dismissed complaint.
The most recent order stokes ongoing controversy about the Federal Circuit’s Dec. 2 decision ordering the case transferred from the District of Delaware to the Northern District of California and its likely impact on Delaware as a popular patent case forum.
On Dec. 16, the same panel that issued the earlier order in the case, In Re Link_A_Media Devices Corp., issued a per curiam order: Chief Judge Randall Rader and judges Timothy Dyk and Kathleen O’Malley.
The latest order denied the parties’ motion to withdraw or dismiss the mandamus petition filed by Link_A_Media that generated the first order. The Federal Circuit also refused to withdraw or vacate its own order granting the petition.
Marvell International Ltd., a Bermuda-based holding company for Marvell Technology Group, sued Link_A_Media in the District of Delaware in October 2010. Marvell claimed Link_A_Media infringed four of its patents related to components for computer disk drives. Link_A_Media is incorporated in Delaware but headquartered in Santa Clara, Calif.
The Federal Circuit’s Dec. 2 per curiam order ruled that Judge Sue Robinson of the District of Delaware should vacate her previous decision and allow Link_A_Media’s transfer motion. The panel wrote that Robinson’s June ruling “placed far too much weight on the plaintiff’s choice of forum” and that her “heavy reliance on the fact that [the defendant] was incorporated in Delaware was similarly inappropriate.”
According to the Federal Circuit’s recent order, Marvell stated that it called the Federal Circuit clerk’s office on Dec. 1 and informed an unidentified person that the case had settled. The parties filed a settlement agreement with the district court on Dec. 2, but didn’t formally notify the Federal Circuit until Dec. 5.
The per curiam order cited two U.S. Supreme Court cases that hold that it is counsel’s duty “to formally inform this court in writing of the agreement” when there’s a settlement. Those two are Board of License Commissioners of Tiverton v. Pastore from 1985 and a 1997 ruling in Arizonans for Official English v. Arizona.
“We determine that granting a motion to vacate our order is neither required nor a proper use of the judicial system,” stated the order.
The order noted that the district court didn’t need to transfer the dismissed case, but “consistent with our sister courts, we conclude that we should not vacate our order after the matter was decided.”
This month’s Federal Circuit rulings about Delaware follow several mandamus cases about the Eastern District of Texas, mostly requiring transfer out of the plaintiff-friendly district. That wave of cases started with a December 2008 Federal Circuit ruling in In re TS Tech USA Corp., which applied 5th Circuit case law and found that the Eastern District of Texas abused its discretion by rejecting a transfer motion.
Marvell’s lawyer, Fish & Richardson partner Indranil “Indy” Mukerji, deferred questions to his client, which did not respond to a request for comment.
Wayne Puglisi, Link_A_Media’s senior director of business development and corporate marketing, declined to comment, as did the company’s lawyers at San Francisco’s Durie Tangri.
The Federal Circuit “clearly wanted to keep that [Dec. 2] order in place,” said Michael Sacksteder, a patent litigation partner in the San Francisco office of Fenwick & West, who isn’t involved in the case.
The earlier ruling is really significant because “it makes cases a lot less sticky in Delaware unless you have a rare case where one or both of the parties is actually headquartered in Delaware as opposed to being incorporated there,” Sacksteder said.
Delaware has been an attractive option for patent litigation because some judges have taken the position that “if you were incorporated in Delaware, you couldn’t complain about being sued there. [But] the Federal Circuit said that’s not really a factor that should be considered,” Sacksteder said.
It’s too early to tell whether these two orders will reduce patent case filings in Delaware, particularly because of a new congressionally developed patent pilot program designed to enhance district judges’ patent experience at 14 select courts, said Joseph Farnan Jr. of Wilmington, Del.-based Farnan LLP. Farnan, who isn’t involved in the case, was a Delaware federal judge from 1985 to 2010. He doesn’t believe the Federal Circuit will allow every defendant sued in a pilot district to transfer a case to its principal place of business on the basis of convenience now that Congress created pilot districts to boost patent expertise in the federal judiciary.
If not, then it would be inconsistent for the Federal Circuit to allow a Delaware-incorporated multinational corporation with a principal place of business in another state to transfer a case to that other state, he said.
“Sometimes when things are immediate, they look more important than they do three months down the road,” Farnan said. “I don’t think it’s going to affect the Delaware practice because it’s been here so long.”
This article first appeared in The National Law Journal, an affiliate of Texas Lawyer.
