There are signs that, despite Judge Albright’s best efforts, the rest of the world might not support turning the Western District of Texas into another NPE haven like the Eastern District in its glory days. After Judge Albright’s efforts to make sure Waco was “open for business for patent cases”, NPEs flocked to the Waco courthouse—in fact, one in five patent cases in 2020 will have been filed there, and 85% of those are NPE lawsuits.
But in the past few months, there have been potential setbacks to NPEs’ project to turn the Waco Division of the Western District into their new hometown.
Juries Aren’t All The Same
The first setback for NPEs came in Judge Albright’s first patent trial. In that trial, an NPE called MV3 Partners claimed Roku infringed their patent on a particular type of set-top box with functions for media authentication and rescaling. (MV3 Partners has never made a product and appears to have no public presence; the inventor is also MV3’s managing partner, Jared Abbruzzese, a businessman, lobbyist, and racehorse owner.) During the inventor’s deposition, he couldn’t remember anything about the patent.
As it turns out, that might not be the recipe for a winning case in Western Texas. Jurors decided that MV3’s patent hadn’t been infringed, rejecting MV3’s claim that it was owed $41 million. Western Texas juries—especially in the Austin area—may prove to be more technically sophisticated than Eastern Texas juries and less favorable to the property rights arguments that are favorites of Eastern Texas plaintiffs.
That said, this is just the first trial—any judgment about whether Western District juries are less willing to favor NPEs will have to see how the next few trials go.
Federal Circuit Skepticism
The result in MV3 isn’t the only thing that might concern plaintiffs. Over the past few months, the Federal Circuit appears to have taken an increasingly skeptical view of Judge Albright’s decisions.
First, there was In re Apple, where the Federal Circuit—in the course of denying a motion for transfer—”question[ed] the propriety” of one of Judge Albright’s rulings, throwing doubt on whether he had applied the proper standard of decision. While that error was ultimately harmless, as the motion for transfer failed on other grounds, the Federal Circuit still felt the need to identify this error.
Next, there was In re Adobe, in which the Federal Circuit found that Judge Albright had committed a “clear abuse of discretion” in refusing to transfer a case to California based primarily on an alleged ability to run cases more quickly in his courtroom. Even if that were true, the Federal Circuit noted that the congestion factor requires an appreciable difference, not simply a small difference in time to trial, that the general ability to set a schedule says nothing about the actual ability to try cases, and that court congestion alone cannot outweigh other factors, such as convenience of witnesses.
Third, the Federal Circuit’s In re Sand Revolution noted that the district court “ruling was cursory.” While this alone was not sufficient to justify mandamus, the Federal Circuit was clearly signaling concern that Judge Albright wasn’t doing enough analysis to justify his decisions to keep cases moving in the Western District.
And this week, the Federal Circuit issued its ruling in In re Nitro Fluids, finding that “the very cases relied on by the district court make clear that it had matters backwards.” And again, the Federal Circuit was forced to note that “the district court’s explanation in these respects is cursory” and “consist[ed] of two sentences, neither of which meaningfully discuss” the relevant issues.
The Future of the Western District
While promising, this is just the result from one case and a few orders from the Federal Circuitover the last few months. The Federal Circuit is clearly keeping an eye on the Western District, perhaps to avoid a repeat of the problems in the Eastern District last decade, problems that continue to this day. And for plaintiffs, while the rules employed by Judge Albright in the Western District may remain attractive, the prospect of a skeptical jury pool and an attentive Federal Circuit might not be.
Judge Albright’s stated intent is to create “a serious venue for sophisticated patent litigation.” Only time will tell if the Western District will continue to cater to NPEs instead.