Federal Circuit allows patent trial against Google to go ahead in Texas

It's still tough to get patent infringement lawsuits out of the Eastern District of Texas, even when a federal appellate court already ruled for defendant Alphabet Inc.-owned Google in a very similar case.

Seven months after defeating a plaintiff's lawsuit on venue grounds, the U.S. Court of Appeals for the Federal Circuit is allowing a case to go to trial against the Mountain View-based company over the objections of Quinn Emanuel partner Charles K. Verhoeven.

Federal Circuit Judge Jimmie V. Reyna denied Google's writ of mandate asking the court to order U.S. District Judge J. Rodney Gilstrap of the Eastern District of Texas to vacate and reconsider its decision denying Google's motion to dismiss or transfer the case for improper venue.

Reyna, in his opinion, didn't give Gilstrap's ruling a strong endorsement but instead wrote Google didn't meet the high standards required to stop a trial with a writ of mandate.

"Google raises viable arguments based on the law of agency and this court's precedent, and we are concerned that the district court did not move more quickly to resolve Google's motion," he wrote. "Nonetheless, we are not satisfied that, based on the record before us, Google's right to a writ is clear and indisputable." In re: Google LLC, 2020-144 (Fed. Cir., filed Aug. 4, 2020).

In February, Google persuaded a different Federal Circuit panel it could not be sued in the Eastern District of Texas just because the company had servers and served customers there.

After that ruling, Gilstrap ordered Google and the plaintiff in a different patent case, Personalized Media Communications LLC, to file briefs about whether that decision meant a Texas venue was still appropriate for the lawsuit.

Attorneys for Personalized Media Communications adopted a different argument, that the Eastern District of Texas is still a proper venue because Google hired a contractor to run operations out of a facility in Flower Mound, Texas. They cited another Federal Circuit case, In re Cray, 871 F.3d at 1360, and the case from earlier this year involving Google and another plaintiff. In re Google, 949 F.3d at 1345.

"This factor is satisfied because CTDI [the contractor] acts as Google's agent conducting Google's business at the Flower Mound facility," Gilstrap wrote in a July ruling denying the company's motion to dismiss the case due to improper venue.

In his writ motion, Verhoeven cited a recent U.S. Supreme Court decision -- TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017) -- in which justices held venue is proper only in a district "where the defendant has committed acts of infringement and has a regular and established place of business."

"This is another case in which a district court in the Eastern District of Texas has misconstrued 28 U.S.C. § 1400(b), accepted a plaintiff's strained venue theory, and failed to dismiss or transfer a case in which venue is improper," Verhoeven wrote in the motion.

The Federal Circuit panel didn't agree, concluding Google would get a chance to appeal an adverse verdict.

Joshua Landau, an attorney with the Computer & Communications Industry Association who filed a brief supporting Google, said in a telephone interview Friday the case is "part of an ongoing trend of judges in the Eastern District of Texas trying to keep cases in the Eastern District."

The district is regarded as a favorable plaintiffs' venue, and Silicon Valley companies often want cases transferred to the Northern District of California. Since TC Heartland, they sometimes succeed, either because a Texas judge rules in their favor or the Federal Circuit overrules an adverse decision. But the Eastern District of Texas still holds onto many cases.