08/08/14

In re Nintendo of America: Writ of Mandamus to Transfer Venue, Sever & Stay Claims Against Defendants Granted

Category: Civil Procedure   
 
 
 
 By: Christian Hannon, Contributor 
 
TitleIn re Nintendo of Am., No. 2014-132 (Fed. Cir. June 24, 2014).
Issue[Did] [t]he distrcit court [correctly] den[y] the motion of Nintendo and the [eleven retailer defendants (the "Retailers")] to sever and stay the claims against the Retailers, and transfer the separated action against Nintendo to the Western District of Washington.
In re Nintendo of Am., at *2 (text added).
HoldingThe benefits of trying the case against Nintendo in the Western District of Washington are indisputable. We conclude that the district court should have exercised its discretion to grant the petition.
Id. at *6. 
 
 

Procedural HistorySecure Axcess LLC brought this suit in the United States District Court for the Eastern District of Texas, charging Nintendo and [the "Retailers"] with patent infringment. The district court denied the motion of Nintendo and the Retailers to sever and stay the claims against the Retailers, and transfer the separated action against Nintendo to the Western District of Washington. Nintendo and the Retailers filed this petition for a writ of mandamus.
In re Nintendo of Am., at *2. 
 
 
 
Legal Reasoning (Newman, Rader and Hughes)
Background
Applicable Law: Change of Venue, MIsjoinder and Nonjoinder of PartiesA district court is authorized to "transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). Where, as here it is unclear whether the entire action could have been brought in the transferee venue, courts may sever defendants for purposes of transfer. Fed. R. Civ. P. 21.
In re Nintendo of Am., at *2.
Applicable Law: Customer Suit ExceptionWhen a patent owner files an infringement suit against a manufacturer's customer and the manufacturer then files an action of noninfringment or patent invalidity, the suit by the manufacturer generally takes precedence. This "customer-suit" exception to the "first-to-file" rule exists to avoid, if possible, imposing the burdens of trial on the customer, for it is the manufacturer who is generally the "true defendant" in the dispute.
Id. at *4 (internal citations omitted).
Applicable Law to Nintendo & Retailers Writ of Mandamus
While the circumstances of this case differ from those of the customer-suit exception, we agree with the district court that the same general principles govern in that Nintendo is the true defendant. [...] [T]he customer-suit exception, Rule 21, and § 1404(a) are all designed to facilitate just, convenient, efficient, and less expensive determination. Petitioners argue persuasively that granting this motion would resolve these claims more efficeintly and conveniently. Indeed, the district court recognized that "the issues of infrignement and validity are common to Nintendo and the Retailer Defendants" and that if Secure Axcess were to collect roaylties from Nintendo, this would preclude suit against the Retailers. Moreover, the record reflects that all of Nintendo's identified witnesses reside in the transferee forum or would find travel to and from that venue significantly more cenveient[.]
In re Nintendo of Am., at *4-5 (internal citations omitted).
Conclusion
The district court order denying the motion to sever,
transfer, and stay is vacated, and the district court is
directed to grant petitioners’ motion.
In re Nintendo of Am., at *6.
 
 
Image Attribution Statement: Evan-Amos, “A Nintendo 3DS in Aqua Blue,” available as a work released to the public domain by the author, http://commons.wikimedia.org/wiki/File:Nintendo-3DS-AquaOpen.jpg (last visited Aug. 2, 2014) (image edited). 
 
 
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