In re TikTok Inc. Archives

TikTok: Federal Circuit Follows Fifth Circuit, Transfers Case for Witness Convenience

In the first mandamus decision applying the US Court of Appeals for the Fifth Circuit’s new transfer motion guidelines under 28 U.S.C. 1404(a), the Federal Circuit followed suit and transferred a case for witness convenience. In re Samsung Elecs. Co., Ltd., Case No. 2023-146 (Fed. Cir. Dec. 14, 2023) (nonprecedential) (Prost, Hughes, Stoll, JJ.) (per curiam).

DoDots Licensing sued Samsung in the US District Court for the Western District of Texas (WDTX), alleging that Samsung phones and tablets infringed three DoDots patents. Samsung moved to transfer the case to the Northern District of California (NDCA). The applicable Fifth Circuit law allows for transfer only when the movant shows that the transferee forum is “clearly more convenient” than the transferor forum, which is determined by assessing a series of private and public interest factors. Echoing three of those factors, Samsung argued the following:

The teams that developed the allegedly infringing functionalities resided in NDCA and Korea.
Important third-party witnesses could be compelled to testify in NDCA but not in WDTX.
There was no meaningful connection between WDTX and the events giving rise to the suit.

Judge Albright denied the motion to transfer. He found that two factors weighed in favor of transfer: the ability to compel witness testimony and NDCA’s local interest in the case. However, Judge Albright also found that two factors weighed against transfer: WDTX was more convenient for certain witnesses, and DoDots’ co-pending and related lawsuits in WDTX meant that practical problems would arise if this case was transferred. The district court further determined that any remaining factors were neutral. Weighing all factors, the district court denied Samsung’s transfer motion, finding that Samsung had not shown that NDCA would be “clearly more convenient.”

Samsung filed a petition for writ of mandamus to the Federal Circuit, seeking to have the Court direct WDTX to transfer the case to NDCA. The sole question presented was whether, under Fifth Circuit law, the district court erred in refusing to transfer the case.

The Federal Circuit determined that the district court had clearly abused its discretion and that failing to transfer the case to NDCA had led to a “patently erroneous result.” The Federal Circuit found that the two factors that the district court determined weighed against transfer instead weighed in favor of transfer.

First, the Federal Circuit explained that the district court erred in finding that the “willing witness” factor weighed against transfer. Various Samsung entities had 10 relevant employees in NDCA and 20 in Korea. DoDots, in contrast, pointed to no potential technical or key witnesses in WDTX, although there were some Samsung marketing employees in Eastern Texas. The district court found that this weighed against transfer because any added travel from California to Texas for these technical witnesses was only a “slight” inconvenience. This argument echoed the argument that the Fifth Circuit rejected in its recent ruling in In re TikTok. In that case, the Fifth Circuit found on very similar facts that it was [...]

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TikTok Makes It Out of West Texas to Sunny Northern California

The US Court of Appeals for the Fifth Circuit granted a writ of mandamus ordering the transfer of a case, finding that the district court’s denial of the motion to transfer “was so patently erroneous” that the extreme measure was appropriate. In re TikTok, Inc., Case No. 23-50575 (5th Cir. Oct. 31, 2023) (Smith, Southwick, Wilson, JJ.)

In the underlying case, Beijing Meishe Network Technology Co. sued TikTok in the US District Court for the Western District of Texas, alleging infringement, trade secret misappropriation and false advertising. All claims stemmed from the theory that a former Meishe employee disclosed copyrighted source code for video and audio editing software to TikTok, which TikTok then implemented into its app. Meishe and TikTok are Chinese companies, and both the alleged disclosure and TikTok’s alleged code implementation occurred in China, assisted by TikTok engineers in California. TikTok has no engineers in Texas but does maintain a business office there, although not within the Western District.

TikTok moved under 28 U.S.C. § 1404 to transfer the case to the Northern District of California. The district court took 11 months to rule on the motion, and in the meantime the case continued through discovery. After the district court denied the motion, TikTok petitioned the Fifth Circuit for a writ of mandamus.

The sole issue on mandamus was the propriety of the district court’s refusal to transfer venue. To succeed on a writ of mandamus, a petitioner must satisfy the reviewing court regarding the following questions:

Are there other ways to obtain the desired relief?
Is the reviewing court’s right to issue the writ “clear and indisputable”?
Is the writ appropriate, given the circumstances?

The Fifth Circuit focused on the second question, its right to issue the writ. In the Fifth Circuit, the 2008 en banc In re Volkswagen case mandates an eight-factor test that a district court must consider in deciding a § 1404 transfer motion. No one factor is dispositive, and the Fifth Circuit has cautioned against tallying the yes/no results or denying transfer just because most factors are neutral. Unsurprisingly, in the 15 years since Volkswagen, district courts applying these factors have reached inconsistent results. Even the Fifth Circuit has reached “conflicting outcomes” when reviewing these cases. The Fifth Circuit therefore took the opportunity to address each factor.

The Fifth Circuit found that two factors weighed in favor of transfer:

The relative ease of access to sources of proof
The cost of attendance of willing witnesses

Regarding ease of access to proof, the Fifth Circuit clarified that factfinders analyze “relative ease of access, not absolute ease of access” to documents and other physical evidence. The district court had determined that this factor was neutral, given that most documentation was electronic. The Fifth Circuit disagreed, explaining that while the source code was electronically stored, it was protected by a high level of security clearance. Only certain TikTok employees based in California and China were able to access the code. Using the relative metric, [...]

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TikTok: Federal Circuit Follows Fifth Circuit, Transfers Case for Witness Convenience

TikTok Makes It Out of West Texas to Sunny Northern California

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