Last Week in the Federal Circuit (October 26-30): Another Texas Mandamus Grant

In what seems to be a pattern, the week before argument week was again light on output at the Federal Circuit. The Court issued just two opinions and two dispositive orders. Below we provide our usual weekly statistics and our case of the week—our highly subjective selection based on whatever case piqued our interest.

Precedential opinions: 1 opinion and 1 precedential order

Non-precedential opinions: 1 opinion and 1 non-precedential order

Rule 36: 0

Longest and shortest case pending case from argument (non-Rule 36): Corcamore, LLC v. SFM, LLC, No. 19-1526 (236 days) (only decision this week in which argument was held)

Case of the week: In re Nitro Fluids LLC, No. 20-142 (Oct. 28, 2020)

Panel: Judges Reyna, Wallach, and Chen, with Judge Reyna authoring the order.

You should read this case if: you have a client accused of infringement in multiple forums by the same plaintiff.

This week we look at another grant of a mandamus petition from the Federal Circuit, which seems to be a bit of a trend (see A Tale of Two Mandamus Petitions). In this week’s order, the Federal Circuit sent back Judge Albright’s denial of a motion to transfer a case from the Western District to the Southern District of Texas and gave guidance on the first-to-file rule.

Cameron International Corp. first sued Nitro Fluid for patent infringement in the Southern District of Texas. That court stayed the case pending an inter partes review. Cameron then sued Nitro Fluid in the Western District of Texas on related patents but based on the same products.

Despite the pending Southern District case, the Western District court rejected a motion to transfer or decline jurisdiction based on the first-to-file rule. That rule generally says that “the court in which an action is first filed is the appropriate court to determine whether subsequently filed cases involving substantially similar issues should proceed.” But the Western District court thought there were “sufficiently compelling circumstances” to overcome the rule based on applying the traditional transfer factors.

The Federal Circuit vacated that order, holding that the district court had abused its discretion. The Federal Circuit accepted that, under Fifth Circuit law, “compelling circumstances” could overcome the first-to-file rule and that the 1404(a) transfer factors could in some cases amount to compelling circumstances. But it held that the district court got “matters backwards” by placing the burden on Nitro Fluid and asking whether the factors favor transfer. Instead, the district court should have placed the burden on Cameron and asked whether “the balance of transfer factors favors keeping the case in the second-filed court.”

The Federal Circuit also held that the district court had committed “clear errors” in analyzing two of the transfer factors. First, in considering court congestion, the district court wrongly focused on the fact that it could hear cases more quickly than the Southern District. But it failed to consider whether that was because of “an appreciable difference” in congestion, as required, or instead due to other factors, like a stay in favor of Patent Office proceedings. Second, the district court erred in considering judicial economy. It wrongly elevated “its own views on the importance of speed of resolution” above the premium that the first-to-file rule places “on the importance of allowing one court to resolve substantially overlapping cases.” As the Federal Circuit explained, “there is no reason to think that even if the second-filed court could more quickly resolve this case than the first-to-file court that would alleviate the need for two courts to resolve the overlapping issues.” The Federal Circuit thus remanded to the district court to reconsider the factors under the correct test.