In an opinion issued on Wednesday, a Federal Circuit appellate panel found flaws with the lower court’s venue analysis in a case brought by Ikorongo Texas LLC and Ikorongo Technology LLC. The appeal stemmed from the Western District of Texas court’s denial of Samsung Electronics Co. Ltd., LG Electronics Inc., and their affiliates’ motions to transfer the venue to the Northern District of California.
Ikorongo contended that Samsung and LG infringed at least one claim of the asserted patents by making and selling devices that perform certain functionality. In particular, the allegations are “directed at functionality in third-party applications,” like Google Maps, YouTube Music, and AT&T Secure Family, that run on the accused mobile products Samsung and LG sell.
The defendants separately moved to transfer venue on the bases that “three of the five accused third-party applications were developed in Northern California, where those third parties conduct significant business activities and that no application was developed or researched in Western Texas.” The parties further argued that potential witnesses and sources of proof are in the proposed transferee district, whereas none are in the current.
The Federal Circuit considered both whether the district court erred in concluding that venue in the Northern District of California under 28 U.S.C. § 1400(b) was improper and whether it clearly erred in its examination of the traditional transfer factors under 28 U.S.C. § 1404(a). The panel, applying Fifth Circuit law, answered both questions in the affirmative.
The judges held that the defendant attempted to manipulate the venue because of party Ikorongo Tech’s pretextual business purpose. That entity, the court reasoned, “seems to exist for the sole purpose of limiting venue to the Western District of Texas.” The court further referred to its creation as “plainly recent, ephemeral, and artificial — just the sort of maneuver in anticipation of litigation that has been routinely rejected.”
In addition, the opinion said, the lower court abused its discretion in its assessment of the various permissive transfer factors. For example, the decision reportedly discounted the convenience of third-party witnesses and disregarded the fact that relevant events leading to the purported infringement claims largely took place in Northern California, where the case will now proceed.
The petitioners are represented by O’Melveny & Myers LLP, and the respondents by Nix Patterson LLP, Sorey Law Firm, and Wisnia PC. The Computer & Communications Industry Association was represented by its own counsel as amicus curiae on behalf of the petitioners.