IP News

Clear Abuse of Discretion in District Court's Refusal to Transfer

In In re TS Tech USA Corp., Misc. Docket No. 888 (Fed. Cir. Dec. 29, 2008), the Federal Circuit granted petitioner TS Tech USA Corp.'s (“TS Tech”) petition for a writ of mandamus directing the District Court for the Eastern District of Texas to transfer a patent infringement suit filed against TS Tech by Lear Corporation (“Lear”) to the District Court for the Southern District of Ohio.

Lear filed suit against TS Tech in the Eastern District of Texas on Sept. 17, 2007 alleging that TS Tech made and sold pivotal headrest assemblies that infringed Lear's patent related to the same. On Dec. 27, 2007, TS Tech moved to transfer venue pursuant to '1404(a) to the Southern District of Ohio arguing that this was a more convenient venue based upon the location of the physical evidence and likely trial witnesses. TS Tech further argued that because none of the parties were incorporated in Texas or had offices located in the Eastern District of Texas, there was no meaningful connection between the venue and the case. Lear responded that venue was proper because several Honda vehicles allegedly incorporating the infringing headrests had been sold in Texas.

On Sept. 10, 2008, the Eastern District of Texas denied TS Tech's motion to transfer, reasoning that TS Tech had failed to demonstrate that the inconvenience to the parties and witnesses clearly outweighed the deference entitled to Lear's choice in bringing suit in the Eastern District of Texas. The district court further found that because several vehicles with TS Tech's allegedly infringing headrest had been sold in the venue, the citizens of the Eastern District of Texas had a “substantial interest” in having the case tried locally. TS Tech petitioned the Federal Circuit for a writ of mandamus, arguing that the district court ignored precedent and clearly abused its discretion in refusing to transfer the case.

The Federal Circuit issued the writ, directing the district court to transfer the case to the Southern District of Ohio, holding that the district court clearly abused its discretion. Applying regional law, the Federal Circuit reasoned that the district court ignored Fifth Circuit precedent from In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc), which held that a transfer motion should be granted upon a showing that the transferee venue is “clearly more convenient” than the venue chosen by plaintiff. The Federal Circuit noted that the Fifth Circuit requires consideration of “public” and “private” factors for determining forum non conveniens when deciding a '1404(a) venue transfer question. The “private” interest factors include: 1) the relative ease of access to sources of proof; 2) the availability of compulsory process to secure the attendance of witnesses; 3) the cost of attendance for willing witnesses; and 4) all other practical problems that make a trial easy, expeditious, and inexpensive. The “public” interest factors to be considered are: 1) the administrative difficulties flowing from court congestion; 2) the local interest in having localized interests decided at home; 3) the familiarity of the forum with the law that will govern the case; and 4) the avoidance of unnecessary problems of conflicts of laws [or in] the application of foreign law.

Applying these factors, the Federal Circuit held that the district court erroneously gave too much weight to Lear's choice of venue, which under Fifth Circuit law, should not be considered a separate factor in the transfer analysis. The Federal Circuit also determined that the district court improperly ignored the cost of attendance for witnesses, and the relative ease of access to sources of proof. Finally, the TS Tech court held that the district court disregarded Fifth Circuit precedent in analyzing the public interest in having localized interests decided at home. Specifically, the Federal Circuit found that the district court's reasoning related to this public interest factor ' that the citizens of the Eastern District of Texas had a “substantial interest” in having the case tried locally because several of the vehicles were sold in that venue ' was unequivocally rejected by the Fifth Circuit.

Supreme Court Requests Brief of Solicitor General in Copyright Case

On Jan. 12, 2009, the U.S. Supreme Court invited the Solicitor General to file a brief expressing the views of the United States in Cable News Network, Inc. et al. v. CSC Holdings, Inc. et al., No. 08-448, indicating that the Court may grant Cable Network, Inc.'s petition for a writ of certiorari. On Oct. 6, 2008, plaintiff Cable News Network, Inc. petitioned the Court for a writ of certiorari after the Second Circuit held that defendant Cablevision would not directly infringe plaintiff's copyrights by offering its Remote Storage Digital Video Recorder (“RS-DVR”) system to consumers.

The RS-DVR allows customers who do not have a stand-alone DVR to record cable programming on central hard drives housed and maintained by Cablevision at a “remote” location. RS-DVR customers may then receive playback of those programs through their home television sets, using only a remote control and a standard cable box equipped with the RS-DVR software. CSC Holdings produces copyrighted movies and television programs that it provides to Cablevision pursuant to numerous licensing agreements. Petitioner CSC News Network Inc. stated the questions presented for the Court's review as:

1. Whether the Second Circuit's ruling that Cablevision is not legally responsible for its copying and performance of Petitioners' copyrighted works fundamentally destabilizes copyright law and
inverts the proper relationship between direct and secondary copyright infringement due to the court's expansive misreading of Sony Corp v. Universal Studios and complete disregard for New York Times v. Tasini.

2. Whether the Second Circuit erred in ruling that Cablevision is not directly liable for its copying of Petitioners' programs because 1) Cablevision designed and operates its service to use computers, rather than human beings, to make copies for customers who request them, and 2) “buffer” copies that Cablevision itself admittedly creates in that process are not “fixed,” under a misreading of the plain language of the Copyright Act that conflicts with the interpretation uniformly adopted by three other Circuits and the Copyright Office.

3. Whether the Second Circuit erred by holding ' under an interpretation of the Copyright Act that conflicts with the plain statutory language and decisions of other Circuits ' that Cablevision's performances of Petitioners' programs are not “public,” and therefore not infringing, because Respondent designed its service to send separate on-demand transmissions generated from separate copies of the same program to members of the public.

Matthew Berkowitz is an associate in the New York office of Kenyon & Kenyon LLP.

Clear Abuse of Discretion in District Court's Refusal to Transfer

In In re TS Tech USA Corp., Misc. Docket No. 888 (Fed. Cir. Dec. 29, 2008), the Federal Circuit granted petitioner TS Tech USA Corp.'s (“TS Tech”) petition for a writ of mandamus directing the District Court for the Eastern District of Texas to transfer a patent infringement suit filed against TS Tech by Lear Corporation (“Lear”) to the District Court for the Southern District of Ohio.

Lear filed suit against TS Tech in the Eastern District of Texas on Sept. 17, 2007 alleging that TS Tech made and sold pivotal headrest assemblies that infringed Lear's patent related to the same. On Dec. 27, 2007, TS Tech moved to transfer venue pursuant to '1404(a) to the Southern District of Ohio arguing that this was a more convenient venue based upon the location of the physical evidence and likely trial witnesses. TS Tech further argued that because none of the parties were incorporated in Texas or had offices located in the Eastern District of Texas, there was no meaningful connection between the venue and the case. Lear responded that venue was proper because several Honda vehicles allegedly incorporating the infringing headrests had been sold in Texas.

On Sept. 10, 2008, the Eastern District of Texas denied TS Tech's motion to transfer, reasoning that TS Tech had failed to demonstrate that the inconvenience to the parties and witnesses clearly outweighed the deference entitled to Lear's choice in bringing suit in the Eastern District of Texas. The district court further found that because several vehicles with TS Tech's allegedly infringing headrest had been sold in the venue, the citizens of the Eastern District of Texas had a “substantial interest” in having the case tried locally. TS Tech petitioned the Federal Circuit for a writ of mandamus, arguing that the district court ignored precedent and clearly abused its discretion in refusing to transfer the case.

The Federal Circuit issued the writ, directing the district court to transfer the case to the Southern District of Ohio, holding that the district court clearly abused its discretion. Applying regional law, the Federal Circuit reasoned that the district court ignored Fifth Circuit precedent from In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc), which held that a transfer motion should be granted upon a showing that the transferee venue is “clearly more convenient” than the venue chosen by plaintiff. The Federal Circuit noted that the Fifth Circuit requires consideration of “public” and “private” factors for determining forum non conveniens when deciding a '1404(a) venue transfer question. The “private” interest factors include: 1) the relative ease of access to sources of proof; 2) the availability of compulsory process to secure the attendance of witnesses; 3) the cost of attendance for willing witnesses; and 4) all other practical problems that make a trial easy, expeditious, and inexpensive. The “public” interest factors to be considered are: 1) the administrative difficulties flowing from court congestion; 2) the local interest in having localized interests decided at home; 3) the familiarity of the forum with the law that will govern the case; and 4) the avoidance of unnecessary problems of conflicts of laws [or in] the application of foreign law.

Applying these factors, the Federal Circuit held that the district court erroneously gave too much weight to Lear's choice of venue, which under Fifth Circuit law, should not be considered a separate factor in the transfer analysis. The Federal Circuit also determined that the district court improperly ignored the cost of attendance for witnesses, and the relative ease of access to sources of proof. Finally, the TS Tech court held that the district court disregarded Fifth Circuit precedent in analyzing the public interest in having localized interests decided at home. Specifically, the Federal Circuit found that the district court's reasoning related to this public interest factor ' that the citizens of the Eastern District of Texas had a “substantial interest” in having the case tried locally because several of the vehicles were sold in that venue ' was unequivocally rejected by the Fifth Circuit.

Supreme Court Requests Brief of Solicitor General in Copyright Case

On Jan. 12, 2009, the U.S. Supreme Court invited the Solicitor General to file a brief expressing the views of the United States in Cable News Network, Inc. et al. v. CSC Holdings, Inc. et al., No. 08-448, indicating that the Court may grant Cable Network, Inc.'s petition for a writ of certiorari. On Oct. 6, 2008, plaintiff Cable News Network, Inc. petitioned the Court for a writ of certiorari after the Second Circuit held that defendant Cablevision would not directly infringe plaintiff's copyrights by offering its Remote Storage Digital Video Recorder (“RS-DVR”) system to consumers.

The RS-DVR allows customers who do not have a stand-alone DVR to record cable programming on central hard drives housed and maintained by Cablevision at a “remote” location. RS-DVR customers may then receive playback of those programs through their home television sets, using only a remote control and a standard cable box equipped with the RS-DVR software. CSC Holdings produces copyrighted movies and television programs that it provides to Cablevision pursuant to numerous licensing agreements. Petitioner CSC News Network Inc. stated the questions presented for the Court's review as:

1. Whether the Second Circuit's ruling that Cablevision is not legally responsible for its copying and performance of Petitioners' copyrighted works fundamentally destabilizes copyright law and
inverts the proper relationship between direct and secondary copyright infringement due to the court's expansive misreading of Sony Corp v. Universal Studios and complete disregard for New York Times v. Tasini.

2. Whether the Second Circuit erred in ruling that Cablevision is not directly liable for its copying of Petitioners' programs because 1) Cablevision designed and operates its service to use computers, rather than human beings, to make copies for customers who request them, and 2) “buffer” copies that Cablevision itself admittedly creates in that process are not “fixed,” under a misreading of the plain language of the Copyright Act that conflicts with the interpretation uniformly adopted by three other Circuits and the Copyright Office.

3. Whether the Second Circuit erred by holding ' under an interpretation of the Copyright Act that conflicts with the plain statutory language and decisions of other Circuits ' that Cablevision's performances of Petitioners' programs are not “public,” and therefore not infringing, because Respondent designed its service to send separate on-demand transmissions generated from separate copies of the same program to members of the public.

Matthew Berkowitz is an associate in the New York office of Kenyon & Kenyon LLP.