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Federal Circuit: Texas Court Abused Its Discretion By Delaying On Venue Transfer Motion While Proceeding With the Merits of the Case
A district court has broad discretion to manage its docket and decide venue transfer motions. The ongoing proceedings in Netlist, Inc. v. SK Hynix Inc., Nos. 6:20-CV-00194-ADA, 6:20-cv-00525-ADA (W.D. Tex.) provide an unusual and informative example of the scope and bounds of that discretion.
On March 17, 2020, Plaintiff Netlist filed a first action in the Western District of Texas alleging that Defendant SK Hynix infringes two related patents. A few months later, on June 15, 2020, it filed a second action in the same court alleging infringement of a third, unrelated patent. District Court Judge Alan Albright consolidated the cases, setting a Markman hearing for March 19, 2021 and trial for Dec. 6, 2021. See, e.g., -194 case, Dkt. No. 73 at 3, 5.
On May 4, 2020, SK Hynix moved to transfer the first case to the Central District of California, where Netlist is headquartered, the two inventors of the patents reside, and two lawsuits were pending between the parties alleging that the same accused products infringed related patents. As a basis for transfer, SK Hynix relied on both the "first-to-file" rule (which provides for transfer when another district court is already hearing a case addressing overlapping issues) and 28 U.S.C. §1404(a) (which provides for transfer based on the convenience of parties and witnesses and the interest of justice). The parties then stipulated that the transfer motion would also apply in the second case.
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