One of the risks of electing to resolve a dispute in arbitration is that, apart from a few narrow exceptions, the decision of the arbitrator is non-appealable.  This can be very hard on the losing party, who believes the arbitrator completely misapplied the law or, in the terminology of the courts, “manifestly disregarded” the law.

Affymax believed it was faced with such a situation when an arbitration panel ruled in favor of Otho-McNeil-Janssen on certain issues in a complicated patent dispute.  Affymax challenged the panel’s decision, and the federal district court reversed part of the arbitration panel’s award.

Wrong, said Chief Judge Easterbrook of the 7th Circuit Court of Appeals in Affymax, Inc. v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., decided on October 3, 2011:  “Manifest disregard of the law” is not a ground on which a court may reject an arbitrator’s award.  The First Circuit, where I practice, has made this clear as well.  See Ramos-Santiago v. United Parcel Service, 524 F.3d 120, 124 n.3 (1st Cir. 2008) (“manifest disregard of the law is not a valid ground for vacating or modifying an arbitral award in cases brought under the Federal Arbitration Act”).

Earlier this year Massachusetts Continuing Legal Education  (MCLE)  asked me to update my 2009 chapter on Employee Noncompetition Agreements.   The revised chapter, part of the 2-volume Massachusetts Employment Law series, was published in June.

Below are links to the cases I added to this chapter.   I’ve also included a sentence or two regarding each case.  However, I did not make an effort to describe every legally significant aspects of each case.

• Ethicon Endo-Surgery, Inc. v. Pemberton, 27 Mass. L. Rptr. 541 (Super. Ct. 2010).  This case, decided by Judge Peter Lauriat  in the Suffolk Business Litigation Session, applies New Jersey non-compete law, but Massachusetts procedural law for purposes of ruling on a preliminary injunction.  The former employee filed suit in California first, but Judge Lauriat  refused to dismiss this case based on the “first filed” rule.  The court enforced an 18 month covenant not to compete against the former employee.

• Inner-Tite Corp. v. Brozowski, No. 2010-0156 (Worcester Super. Ct. 2010).  This lenghy decision was written by Judge Janet Kenton-Walker, sitting in Worcester County, following a bench trial.   The judge enforced a one year convenant not to compete against an employee who had worked for Inner-Tite in Georgia.  Given Brozowski’s  relatively low salary, and the fact that he was asked to sign the non-compete after beginning work for Inner-Tite, this contract would not have been enforceable under the various proposed Massachusetts non-compete statutes.  Either ground would have invalidated the agreement.  This was a tough outcome for the former employee, and one which might have had a different outcome in Suffolk, Middlesex or Norfolk counties, which tend to have more liberal leanings in these cases.

• Rohm & Haas Elec. Materials, LLC v. Elec. Circuits Supplies, Inc., 2010 U.S. Dist. LEXIS 136080 (D. Mass., Dec. 22, 2010).  In this case, brought against a corporate distributor of Rohm,  Judge Joseph Tauro denied a preliminary injunction for a variety of reasons, including Rohm’s failure to prove the  distributor possessed trade secrets or confidential information, and because Rohm’s damages were quantifiable and relatively small,

• Marino Company, Inc. v. Anderson, 2010 Mass. App. Unpub. LEXIS 448 (2010).  This case was moot on appeal where the employer sought specific performance of a three year non-compete agreement, but by the time of trial more than three years had already passed.  See EMC v. Arturi, below.

• Palladium Group, Inc. v. MacGillivray, 2010-2246 (Middlesex Sup. Ct. 2010).  The court construed the non-compete agreement to provide only for forfeiture of benefits, and therefore injunctive relief against the former employee was not available to the former employer.

• Me. Pointe, LLC v. Starr, 2011 U.S. Dist. LEXIS 10442 (D. Mass. Feb. 3, 2011).  Judge O’Toole found that where a sales representative signed an independent contractor agreement on behalf of his company the agreement committed the company, but not the individual in his personal capacity.

• People’s Choice Mortgage, Inc. v. Premium Capital Funding, LLC, 26 Mass. L. Rptr. 582 (Super. Ct. 2010).  This opinion, written by Judge Stephen E. Neel sitting in Suffolk County, is notable because the new employer was found liable for tortious interference and violation of M.G.L. c. 93A.

• Ansys, Inc. v. Computational Dynamics North America, Ltd., 595 F.3d 75 (1st Cir. 2010).  The First Circuit, applying an “abuse of discretion” standard to denial of a preliminary injunction by the New Hampshire District Court, affirmed the lower court.  This case applied New Hampshire non-compete law.

• Parexel International Corp. v. Nanavati, 26 Mass. L. Rptr. 426 (Super. Ct. 2011).  In an odd twist (one which I can’t recall having seen before), Judge Thayer Fremont-Smith, sitting in Middlesex County, found that the fact that the new employer had agreed to pay the employee during the non-compete period, even if the employee was enjoined from working, was a factor that actually favored entry of the injunction, since the employee would not be injured by the injunction.

And a few cases that have been decided following the MCLE publication:

•  OfficeMax v. Levesque (1st Cir.).  In this case the non-compete agreements were found to be unenforceable because they were not assignable to OfficeMax as part of a corporate acquisition.  This probably came as a surprise to OfficeMax, and shows why “due diligence” is an important part of the corporate acquisition process.   (Applying Maine law).

• Empirix v. Ivanov (Middlesex Sup. Ct., May 17, 2011). Superior Court Judge Frances A. McIntyre, sitting in Suffolk County, issued an injunction enforcing a one year non-compete.

• EMC v. Arturi (1st Cir., Aug. 26, 2011) (Souter, J). In this decision, written by former Associate Supreme Court Justice Souter, the First Circuit upheld the denial of a preliminary injunction where the one-year non-compete period had expired.  “Like any contracting party, EMC makes its agreements subject to the rules of equity governing specific enforcement; rules, moreover, that were clearly in place in the governing federal and state cases well before the company required [the employee] to sign. Being forewarned, EMC could have contracted . . .  for tolling the term of the restriction during litigation, or for a period of restriction to commence upon preliminary finding of breach. But it did not.”  I would venture to say that this decision puts to rest, once and for all,  the argument that a noncompete provision can be enforced beyond its term in the absence of a tolling agreement.

• Aspect Software v. Barnett (D. Mass., May 27, 2011).  In this decision, Judge Denise Casper’s first non-compete case since she was appointed to the federal district court, the court granted a preliminary injunction that it deemed necessary to protect the former employer’s trade secrets.  The employee had moved to California, and argued that California law (which does not enforce employee non-compete agreements against employees) should apply.  However, the employee’s agreement with Aspect provided that  Massachusetts law controlled the agreement, and  therefore the court rejected the employee’s “California defense.”

I was interested to read the The Wall Street Journal’s report that Raj Rajaratnam spent $300,000 on jury consultants before the trial in which he was convicted on all 14 counts of securities law violations.  As my teenage daughter might say, “fail”!

OK, I admit that I’m being a bit unfair.  From everything I read in the press regarding this trial it would have been astounding if Mr. Rajaratnam had been acquitted. After all, the government had something quite rare in insider trading cases: audiotapes of the defendant, convicting him with his own words.  A jury consultant “fantasy team” comprised of Sigmund Freud and a certified psychic probably wouldn’t have been able to help in this case.

Nevertheless, it’s no great surprise that Raj’s attorneys chose to use jury consultants in this case.  $300,000 was a drop in the bucket given the “spare no expense” approach taken by defense counsel in this case.  Mr. Rajaratnam”s lawyers undoubtedly concluded that jury consultants might help, and couldn’t hurt.  The decision to utilize jury consultants probably was a prudent step in minimizing future regret.  (“If only we had used a jury consultant our client might not have been convicted! Darn.”).

Trial lawyers have long been deeply divided on the question of whether jury consultants are “worth it.” Some of the consultants’ recommendations in this case  (as reported in the WSJ), are so obvious that it your lawyer doesn’t know them without a jury consultant’s advice, get a new lawyer.  For example, the Journal reports that the consultantants concluded that jurors who were members of ethnic minority groups were more sympathetic to Mr. Rajaratnam, who was born in Sri Lanka.  Hmm . . . . did OJ’s lawyers need jury consultants to tell them that people of color might be more favorably disposed to OJ than whites?  I hope not.  Lawyers shouldn’t need jury consultants to tell them that people are predisposed to like people  like themselves.  If my client is an ultra orthodox Jew, I want a jury of the same.  If my client is a native American . . . . well, you get it.

There are many “rules of thumb” that lawyers tend to develop to guide them in jury selection, and these are often specific  to the lawyer who is picking the jury (or, to be more precise, exercising the right to strike some of the jurors).  These rules change with the time -jury selection in Manhattan today is not what it was  in mid-19th century New York.  However, you don’t need a jury consultant to tell you the obvious.  Francis Wellman said this well in his classic, Day in Court, published 100 years ago:

Laboring men prefer their own kind. Each nationality will to some degree stand together. If the advocate is for the plaintiff, he wants to avoid the cold-blooded, narrow-minded, narrow-hearted types; he wants to select young men with warm natures and intelligent faces. One can often read a man’s character in his face, especially after middle life, although it should never be forgotten that an intelligent exterior sometimes conceals a very shallow mind. He should remember that a jury of landlords will deal unjustly with tenants. Farmers will invariably side with farmers. Railroad men have a natural prejudice against those who attack railroads. On the other hand, a dislike of great corporations makes a good plaintiff’s juror. Many a builder or expert mechanic has swayed the whole jury by knowing the case and explaining his version of it to his fellow-jurors. These are all distinctions that are so simple and plain that even mention of them seems unnecessary, were it not that they are overlooked every day in our courts, . . .

Of course, lawyers bring their stereotypes with them to court.  Some lawyers believe that women are more likely to give large monetary judgments then men, or vice versa.  Other lawyers believe that people with a particular ethnic background are more generous than the population at large  – – or less generous.  I recall reading many years ago about a comment by a juror of a particular religious persuasion who, after the jury found for the defendant in a wrongful death case, was quoted as stating, “we are all born to die,” suggesting that this particular philosophy was a factor in her jury vote.  Clearly, a plaintiff’s lawyer hoping for sympathy for a client who was severely injured, or for the survivors of someone who was killed as a result of what the plaintiff’s lawyer hopes the jury will conclude was negligence, would like to avoid someone with that particular set of beliefs.   If a jury consultant can help a lawyer who might otherwise be clueless about the demographics of the jury pool avoid someone like that (or help the defense lawyer, keep someone with that point of view on the jury), it would well be worth it.  However, situations like that must be very rare.

I will admit that I fall on the side of the skeptics on the question of whether to use jury consultants. I am hard-pressed to believe that a so-called jury consultant is able to add much in the way of value by providing advice regarding factors such as sex, age, education, ethnicity and work experience. And, after all, one never knows whether a jury consultant added value in any particular case.  You don’t get to try the case twice under controlled circumstances that will answer this question.  I suppose that if I were involved in a case that had a limitless budget (that is quite rare), I might listen to what a jury consultant had to say. But, I wouldn’t commit to being bound by that advise.

However, there is one major exception to these comments.  When the Wall Street Journal described Mr. Rajaratnam’s use of jury consultants, it also mentioned that the defendant’s trial team had conducted a “mock trial”. In other words, a group of people was brought together – – presumably a group that reflected the expected demographics of the jury pool in Manhattan – – and Mr. Rajaratnam’s lawyers “put on their case.”  Mock trials can vary greatly in scope.  Some are very elaborate, and include not only opening statements but actual direct and cross-examination of witnesses.  Others are quite abbreviated; the lawyers might grab a few secretaries or paralegals (or perhaps the spouses or friends of firm employees), and do nothing more than present opening statements.  Typically, one lawyer is asked to role-play a lawyer on the other side of the case.  The best mock trials actually include juror deliberations behind a one way mirror, while the attorneys are able to observe and videotape the deliberations.  To get the most out of this exercise it should be as realistic as possible, and the mock jury should not know which side of the case had hired them.

While I am not a strong believer in jury consultants who provide advice on what “type” of person is the ideal juror in a case (or the “anti-ideal juror”), I am a strong believer in the benefits of mock trials, and a jury consultant can help organize a mock trial and analyze the results.  There is nothing more humbling to a lawyer who has spent years developing his or her case theme, only to discover that it goes over like a lead ballon when presented to a mock jury.  Or, that the witness whom the lawyer is counting on to win the case is perceived as insincere or unpersuasive.  A mock trial can reveal these weaknesses.

Of course, the lawyer has to learn this far enough in advance of trial to change course, and not on the eve of trial, when it may be too late.  If not . . .. well, there’s always the next case!

“I’m sorry this letter is so long, I didn’t have time to make it shorter.”
— George Bernard Shaw

Non-lawyers see lawyers arguing before judges on television and in the movies, and they get the mistaken impression that oral argument is the heart and soul of lawyering.  In fact, it’s not.  Most judges based their decision on a careful reading of the legal briefs submitted to them.  That’s particularly true of the Supreme Court, where each side to a case may spend hundreds or thousands of hours preparing their written briefs, and get all of 30 minutes per side for oral argument.  This wasn’t always the case – until the mid-1800′s the time for argument was unrestricted, and could go for days.  In 1849 the time per side was limited to two hours.  This was reduced to one hour in 1925, and 30 minutes in 1970.  And, as Justice Alito recently noted, half of the words spoken during those 30 minutes are spoken by the Justices themselves, while questioning the lawyers.

As the time available for oral argument has diminished the importance of written briefs has increased, and I think most lawyers would agree that most cases are won or lost on the briefs.  Hence, the increase in studies of how to use the written word most effectively to persuade Supreme Court justices.

In late 2006 and 2007, language savant Bryan Garner interviewed eight of the nine then-sitting Supreme Court justices on their views on writing and advocacy.   He posted videos of these interviews online.

Now, he has published full transcripts of the interviews in The Scribes Journal of Legal Writing.

The interviews are quite educational, and also amusing.   Most of what the justices have to say is no great surprise.  A few choice quotes:

• “I have yet to put down a brief and say, ‘I wish that had been longer’” (p. 35).

• “What the academy is doing, as far as I can tell, is largely of no use or interest to people who actually practice law” (p. 37).

• “I love But at the beginning of a sentence . . .” (p. 60).

• “[G]ood counsel welcomes, welcomes questions” (p. 70).

• “So the crafting of that issue . . . Man, that’s everything.  The rest is background music” (p. 75).

• “[T]he genius is having a ten-dollar idea in a five-cent sentence, not having a five-cent idea in a ten-dollar sentence” (p. 100).

• “I can’t bear it [legalese]” (p. 141). “Terrible! Terrible!” (p. 156).

The entire transcript is almost 200 pages long, and is recommended reading for those who want to understand how Supreme Court justices — who are likely representative of most judges in most respects — view the role of written persuasion.

One of the oldest, most hoary rules of the trial practice is this: if you have a bad fact, reveal it to the jury before your opponent does.  Otherwise, the theory goes, the jury (or judge) will think you are trying to hide it from them, and will count it against you. Worst case, you will lose credibility as an advocate – if this lawyer will try to hide a significant fact from me this time, what else is he or she hiding?  Why should I trust this attorney?

Disclosing the bad fact is OK, but even better, figure out some way to turn the “bad” fact to your advantage – “if you can’t fix it, feature it.”  For example, “my client was convicted of criminal fraud ten years ago.  We want you to know about this, jurors, and to know that he has paid his price to society, and been free of any allegations of wrong doing since.  Since then he has married, he is the father of triplets, and he hasn’t gotten into trouble since.  We all make mistakes – don’t hold this one against him.”

Doesn’t work all the time, but at least you’ve prevented the opposing lawyer from making it appear that you tried to hide the bad fact.

Hence, the raised eyebrows in the trial bar when, during the trial of Raj Rajaratnam, Raj’s lawyer called a witness for the defense, only to have the  prosecutor show, during cross-examination, that Raj had  invested $25 million with the witness shortly before trial.

Why didn’t Raj’s lawyer reveal this during direct examination of this witness?  It goes straigt to bias, of course (Raj: “hey, will you testify for me at trial?  And by the way, I’d like to invest $25 big ones with you first.  But don’t let that influence your testimony!”).  Why did Raj even do this?  Is it possible that  Raj’s lawyer wasn’t even aware of this before it was disclosed in court, and was he taken by surprise?  Clients do stuff like this, you know.  If Raj’s lawyer  didn’t know, kudos to him for not (a) fainting on the spot, or (b) strangling his client in open court.

Did this trial blunder have an impact on the verdict?  We’ll never know, of course, but it must have hurt, and it illustrates a key precept of trial practice:  if you can’t fix it feature it; or, at the very least, don’t appear to be hiding it.

You’re out cruising garage sales on a hot summer Sunday morning when you spot an unopened copy of AutoCAD sitting on a card table for $40 – 40 buckeroos for a program people spend $700 for new.  Yeah, it’s a couple of versions back, but you figure you can get $340 for it on eBay, and not break a sweat.  You buy it from the clearly clueless seller, and the next thing you know you’re watching bids come in at over $300.  Except that Autodesk, proud owner of this high-end computer aided design program, objects.  You don’t own that program, they say, we licensed it to the original seller, and she had no right to sell it, no right at all.  You are infringing our copyright by reselling the software, so take it off eBay right now, Autodesk’s lawyers insist in a hand delivered, “sign-here-to-acknowledge-receipt-sir” letter.  In the meantime, they’ve sent eBay a DMCA take-down notice and eBay has killed your sale.

You are upset.  You purchased that software, just like you might purchase a book at a garage sale.  You can resell a book, a music CD, a record, and the copyright owner of those works has no right to object, so how can Autodesk stop you from selling a product you purchased fair and square?  A little research educates you on the copyright law “first sale” doctrine, which says that a copyright owner can’t stop a purchaser from reselling a work the purchaser owns – the “first sale” teminates the copyright holder’s control over the physical object in which the work is embodied.  Without that, there wouldn’t be a legal second-hand book store anywhere in the U.S. of A.

So, you file suit, asking a federal court to “declare” that you are not an infringer, that you are entitled to buy and resell that software under “first sale.”

This, in essence is what Tim Verner did.  He won in federal district court, but on September 10, 2010, the Ninth Circuit federal court of appeals reversed, holding that (i) the copies of Autodesk Verner bought had been licensed by Autodesk, not sold; (ii) that the software license agreement under which Autodesk had been licensed prohibited any transfer by the licensee; and (iii) accordingly, as Autodesk had indeed argued, Verner was a dad-blamed copyright infringer by trying to sell this stuff.

The decision is filled with legal arguments that, to anyone other than a copyright enthusiast, is more boring than watching paint dry.  For example, we can skip the arguments over whether Verner was allowed to end-run Autodesk’s position under the “essential step” defense, and go right to what I consider the heart of the decision: when you buy something, how can you tell if it’s a license or a sale?  If the publisher puts a sticker on the book you purchase at Barnes & Noble warning you to read the license on the inside back cover, and stating that once the book is purchased at the register you have agreed to that license, are you indeed a “licensee”?

Conveniently, the Ninth Circuit provides a test, as follows:

We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions.

In this instance, a package label attached by Autodesk, along with “significant” transfer and “notable” use restrictions, meant that the transaction was a license and not a sale.

If, after reading this, you think it is darned easy for a software publisher to meet this test, I agree.  In fact, as I read the test, if the publisher is in doubt about how to ensure the legality of a no-transfer clause, it has an incentive to make its license more restrictive under part (3).  Autodesk, and other publishers of expensive software that is sold under a shrink-wrap or click-wrap license that prohibits transfer, happy days.

In the book-seller example, what’s to stop a book seller from licensing books?  In fact, Verner’s lawyer, Greg Beck, has raised just this concern.  In an interview, Mr. Beck states:

AuctionBytes: how likely is it in your opinion that book publishers may decide to issue licenses for their books?

Greg Beck: In my opinion, it’s almost inevitable that it will happen. You’ll probably see it first in cases like textbook publishers where there is already a strong interest in limiting resale because they don’t like students selling textbooks to the next class that comes along. They’d much prefer if every student had to buy a new textbook.

So I can definitely see the textbook industry adopting a similar model based on this decision, and I don’t think that other kinds of publishers would be far behind.

As Beck observes, there’s nothing in the law that would encourage the courts to treat books differently than software.

And, if you’re thinking of purchasing a book on Amazon’s Kindle, you may want to check out the Amazon Kindle License: “Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sublicense or otherwise assign any rights to the Digital Content or any portion of it to any third party.”  Does that mean my Kindle, with the thousands of books I’ll have purchased (oops, licensed) before I depart for the great courthouse in the sky will have to be cremated with me?  Or that my heirs will inherit an illegal Kindle?  It will be interesting when Kindles start showing up in yard sales.

Verner v. Autodesk, Inc.

Additional commentary by Eric Goldman (“This case makes my head hurt”), Prof. Randy Picker at U. Chicago (“gnashing of teeth in some quarters”) and EFF (“major blow to user rights”).

Despite all the hoopla, this week’s copyright decision in Viacom v. YouTube (link on Scribd) was predicatable – a decision in the opposition direction would have been a shocker.  Viacom accused YouTube (owned by Google) of massive copyright infringement.  The court dismissed the case on summary judgment in favor of YouTube.

Of course, there is no question that copyright infringement is taking place on YouTube every instant of the day.  The court noted that video is being uploaded to YouTube at the rate of 24 hours per minute.  My calculator tells me that this is over 12.6 million hours of video per year.  It’s no secret that people are uploading copyright material at a fantastic rate – a search of YouTube will find that almost any popular song can be located.  it’s a simple matter to download the clip (either video of just audio), and share it with friends or on peer-to-peer networks.   YouTube “ground zero” for online copyright infringement.

However, as I’ve noted in the past, the Digital Millenium Copyright Act – the DMCA – is a federal law that protects publishers such as YouTube as long as they follow the DMCA’s “notice and take-down” procedures (aka “whack-a-mole”), which YouTube has faithfully done.  Thus, YouTube was able to claim that it followed “the letter of the law” and therefore its conduct fell within this statutory safe harbor.

Southern District of New York Federal District Court Judge Louis L. Stanton rejected Viacom’s argument that YouTube was aware of, and ignored, massive copyright infringement by YouTube users.  The DMCA, the judge held, does not permit Viacom to establish liability based on “a general awareness that there are infringements.”   The DMCA requires specific knowledge, and when YouTube had that knowledge (usually based on notice from Viacom), it “took down” the copyrighted work.

The atmospherics of the case were also helpful to YouTube.  Unlike music sharing sites like Grokster, which were shown to have been aware of infringement but turned a blind eye to it (See Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005)), there were very few “smoking gun” emails uncovered by Viacom in discovery, so YouTube was able to credibly argue that it was not encouraging or turning a blind eye to infringement.

All of this is not to say that Viacom’s equitable argument is without significant force.  YouTube (and other online service providers like it) are aware that their sites are a vehicle for user-uploaded infringements.  The district court observed that Viacom’s submissions were sufficient for a jury to find that the defendants “not only were generally aware of, but welcomed, copyright-infringing material being placed on their website. Such material was attractive to users, whose increased usage enhanced defendants’ income from advertisements ….”

Viacom may be right to question whether this is a proper allocation of responsibility for copyright enforcement. Under the law, the website operator “need not monitor or seek out facts indicating [infringing] activity,” forcing the copyright owner to monitor the site and constantly inform the operator of the location of  infringing works.  If a popular but infringing video is taken down as a result of such a “take down” notice, it may pop-up again moments later after being upload by a different (or even the same) user, forcing another take-down notice – hence the “whack-a-mole” analogy.   Who should carry the burden of policing this behavior?  The DMCA, a statute enacted long before the advent of YouTube, shifts most of this burden to the copyrights owners, in this case Viacom.

Viacom announced that intends to appeal the ruling, but I give it little chance of success.  Perhaps Viacom thinks that if a Court of Appeals affirms the decision it will give Viacom and other right holders some leverage to argue for a legislative change, but I give that little chance of success as well.

Worthy commentary by Eric Goldman, Evan Brown and Larry Downs.

Oh yeah, and the Mark Cuban thing …. here.

I’ve written before about how generous juries in the federal courts in the Eastern District of Texas (EdTX) are to patent plaintiffs. (link).  After I wrote about this a year ago there was a feeling that this trend might be reversing itself. However, Johnson & Johnson’s $1.6 billion judgment against Abbott and i4i’s $200 million verdict against Microsoft last summer put an end to those thoughts.

So, when Apple, Sirius XM and others were recently sued for patent infringement in EdTX they quite naturally looked for a way out.  Massachusetts, they told the Texas district court, was a far better choice, particularly when you considered the fact that that the patent owner, a non-practicing entity, had set up a Texas company shortly before filing suit, and located its business in the offices of its Texas lawyers.

But, it’s not that easy.

After the EdTX trial court refused to transfer the case to Massachusetts, Apple and its co-defendants filed a “mandamus” with the Federal Circuit.  Mandamus is a rare procedural tool.  Its a way to ask a court (typically an appellate court) to take an action that isn’t really an appeal (because the there is no final judgment), and no specific statute authority authorizing interlocutory appeal. I think it fair to say that fewer than one in a hundred lawyers has ever filed a “writ of mandamus,” (more likely fewer than one in five hundred).

However, Apple was desperate.  And it had a good argument, or so you would think.  Clearly, the plaintiff in this case set up the Texas corporation for one reason only: to establish venue in Texas.  One would think that even if the Texas court refused to transfer the case out of the state, the CAFC would see the unfairness in this tactic. Sadly, for Apple, this was not to be the case.  The district court denied the motion to transfer, and the Federal Circuit upheld this decision on appeal, stating:

To be sure, the status of Personal Audio, LLC, as a Texas corporation is not entitled to significant weight, inasmuch as the company’s presence in Texas appears to be both recent and ephemeral—its office is apparently the office of its Texas litigation counsel, and it appears not to have any employees in Texas. Nonetheless, the petitioners have not made a compelling showing that Massachusetts is a more convenient forum, particularly in light of the fact that none of the defendants is headquartered there. The district court also addressed and rejected the petitioners’ claim that Massachusetts would be a more convenient forum for prospective witnesses in the case, and we are not prepared to hold that the court’s conclusion in that regard was plainly incorrect. In sum, the petitioners have failed to satisfy the demanding standard required to justify the issuance of a writ of mandamus.

Link on Scribd.