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Eastern District of Texas Partially Transfers Patent Case

September 24, 2009

September 24, 2009 (San Francisco, CA) – Michael Sacksteder, partner in the Patent Litigation Group at Fenwick & West LLP, was recently quoted in the National Law Journal article "Eastern District of Texas Partially Transfers Patent Case."

A recent Eastern District of Texas order that shipped some defendants to California while keeping the local defendants in the district highlights the traditionally plaintiff-friendly Texas district's increasing tendency to reject cases that belong in other venues.

Traditionally, the Eastern District of Texas is considered one of several rocket dockets where cases move quickly through the system. On Sept. 15, an order in Balthaser Online Inc. v. Art Star Design LLC that transferred most defendants to the Northern District of California follows the lead set by two U.S. Court of Appeals for the Federal Circuit decisions and a 5th Circuit ruling that criticized the Texas federal court for not transferring cases.

In the Balthaser order, District Judge David Folsom wrote that Balthaser "has failed to show a sufficient connection to this district to override the conveniences gained by transferring" the California defendants. He also claimed that it would be "extremely inconvenient and unfair" to move the Texas defendants added after the TS Tech ruling. "These Defendants were apparently added to the lawsuit for the purpose of maintaining venue in this district," Folsom wrote.

Michael Sacksteder, the Fenwick & West patent litigation partner who argued the joint defense motion for the California defendants, said Balthaser added several extremely small Texas-based defendants shortly after the TS Tech decision. Sacksteder said the defendants that fought for the transfer also recognized that it was unfair to these small Texas companies to move with the other defendants.

"We raised the argument that if you [transfer the whole case], then no Texas company is safe from a patent infringement suit even though it has nothing to do with them," Sacksteder said.

The four Texas defendants the judge allowed to stay in Texas include a Christian social networking community, Web site design companies with one or two employees and a 325-member video-sharing Web site.

About the Fenwick & West Intellectual Property Litigation Group

Fenwick & West attorneys have handled some of the most prominent IP litigation over the past two decades, including securing one of the largest IP litigation settlements of 2005—a $400M settlement for its client Compuware against IBM—and one of the largest patent verdicts of the past eighteen months, a $74.7M patent litigation verdict for client Asyst Technologies against Jenoptik. The firm is ranked by Managing Intellectual Property as one of the top five West coast firms for IP litigation, by IP Worldwide as one of the top dozen firms that Fortune 500 companies relied on for IP litigation, and was recently awarded "Most Innovative Use of Technology by a Law Firm" by American Lawyer Media for the firm's proprietary electronic discovery tools.

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