Not much new to report. Just ongoing discovery formalities. For example, ALJ Rogers granted-in-part Nintendo's motion to compel the production of documents from Motiva back in May of 2011, however the public version of this order has now been issued as of March 21, 2012. Motiva asserted that the documents Nintendo requested were privileged, that Motiva did not waive privilege, and that the privilege log and accompanying documents Motiva had provided were sufficient. The first piece of information discussed concerned a freedom to operate opinion ("Standley Opinion") prepared by the Standley Law Group for Motiva. ALJ Rogers determined that Motiva waived its attorney-client privilege when it shared this opinion with a business partner, and thus ordered the company to produce this document and other related communications.
ALJ Rogers further determined that Motiva waived privilege with respect to documents underlying Motiva's domestic industry assertions. Again, Motiva had waived privilege with respect to the Standley Opinion since it had put its contents at issue with respect to its domestic industry claims. It was decided that Motiva had further waived privilege with respect to documents that related to patent prosecution and litigation because of its domestic industry claims. Nintendo argued that it could not determine the accuracy of Motiva's domestic industry investments without certain supporting documents. ALJ Rogers agreed and ordered Motiva to produce documents related to billing and the subject of the work performed. ALJ Rogers further ordered Motiva to produce certain documents on its privilege log that were identified as invoices or billing records in addition to its fee arrangement regarding its present litigation. Nintendo's request for production of Motiva's privileged communications related to patent litigation and prosecution were denied, however, since they were not put at issue.
The last issue decided upon was the privilege log that Motiva had produced earlier. Nintendo argued that Motiva violated Ground Rule 4.10.1 while Motiva asserted that Nintendo was referring to an old privilege log, and that its amended privilege log complied with this rule. ALJ Rogers found Motiva's privilege log to be insufficient in many regards. For example, many of the authors or senders of each document were omitted from the log. ALJ Rogers further found that documents omitted from the log and documents relating to corporate formation were not adequately explained to be withheld as attorney work product. Nintendo also argued that communications were being withheld even though there was no indication that an attorney was involved. For this reason, and because of all other deficiencies found with the privilege log, ALJ Rogers ordered Motiva to produce a privilege log that complies with Ground Rule 4.10.1.
Case Update: June 2011
Initially in the Eastern District of Texas, this case was referred to mediation on March 17, 2009, and then transferred to the US District Court for the Western District of Washington on March 3, 2010. The parties are concurrently litigating a related case in front of a judge at the International Trade Commission. On June 2, 2011, the ITC judge denied Nintendo’s motion to force Motiva to turn over documents that Nintendo alleged Motiva was improperly withholding as privileged.
After reviewing the items ALJ Robert Rogers found that while Motiva did not meet the burden to show that the documents were protected by attorney client privilege (because they did not “in any way reflect or relate to a fact of which the attorney was informed by the client”), they did successfully prove that the documents were protected by the attorney work product doctrine.
This is the latest chapter in the suit’s progress through the ITC. The ITC probe was initially terminated in February because Judge Rogers initially determined that there was no domestic industry that existed to allow Motiva to proceed with this patent-based suit. Prior to filing this ITC complaint Motiva had been involved in district court proceedings in the US against Nintendo but the judge initially found that this was not enough to constitute “domestic activity.” The ITC vacated this determination in April 2011 saying 1) that it was a genuine issue of material fact as to whether Motiva’s district court litigation against Nintendo was related to its licensing activities and thus a “domestic activity,” and 2) that Judge Rogers erred in declining to consider Motiva’s activities in the US before the issuance of their patents (this included substantial amounts of time spent on product development.) The case was remanded to Judge Rogers.
In early 2009, Nintendo filed a motion requesting that the case be transferred to the Western District of Washington, the location of Nintendo’s principal place of business. Nintendo argued that not only were portions of physical and documentary evidence located in that district but also neither Nintendo nor Motiva were incorporated in Texas, had offices in Texas, or had any witnesses from Texas. On June 30, 2009, the Texas district court denied Nintendo’s request. Nintendo filed a motion asking the court to reconsider its decision, and also petitioned the U.S. Court of Appeals for the Federal Circuit ("Federal Circuit") to vacate the district court’s decision.
Specifically, Nintendo petitioned for a writ of mandamus alleging that the district court clearly abused its discretion when denying Nintendo’s request to transfer the suit to Washington. Citing the mounting pile of decisions transferring cases out of the very same district, including Volkswagen (545 F.3d 304), TS Tech (551 F.3d 1315) , and Genentech (566 F.3d 1338), the Federal Circuit held that “the district court clearly abused its discretion in denying transfer from a venue with no meaningful ties to the case.” In fact, the Federal Circuit indicated that “[t]his case appears to repeat the erroneous methodology that led this court to grant mandamus in TS Tech.” The decision continued to elaborate on the errors made by the district court, including:
(1) applied too strict of a standard to allow transfer;
(2) gave too much weight to the plaintiff’s choice of venue;
(3) misapplied the forum non conveniens factors;
(4) incorrectly assessed the 100-mile tenet;
(5) improperly substituted its own central proximity for a measure of convenience of the parties, witnesses, and documents; and
(6) glossed over a record without a single relevant factor favoring the plaintiffs chosen venue.
Specifically regarding the plaintiff’s choice of venue, the court again reiterated that the:
Fifth Circuit has unequivocally rejected the argument that citizens of the venue chosen by the plaintiff have a ‘substantial interest’ in adjudicating a case locally because some allegedly infringing products found their way into the Texas market.
This is especially pertinent to the gaming community, as it would be hard to imagine any given district in the United States where a gaming product (such as Nintendo’s Wii and/or its related peripherals) did not find its way into the local market. Similarly, the Federal Circuit took issue with the district court asserting Texas was an acceptable centralized location for witnesses, when in fact, no witnesses resided in that district. While not expressly stated in the decision, the court appeared to recognize that applying such a rule would affect several suits in which one witness resided west of Texas while another witness resided east of Texas. Again, given the nature of video game development and usage across the Internet, applying the district court’s rule could prevent a large portion of transfers for infringement suits involving video games.
Specifically regarding the 100-mile tenant, the Federal Circuit cited the Volkswagon decision, stating: “[w]hen the distance between an existing venue for trial of a matter and a proposed venue under [the relevant statue] is more than 100 miles, the factor of inconvenience to witnesses increases in direct relationship to the additional distance to be travelled.” The Federal Circuit's decision can be read here.
It is important to note that several issues, including: 1) the appropriateness of Nintendo's methods seeking review of the district court’s denial to transfer the suit, and 2) the forum non conveniens factors to consider when deciding a motion to transfer venue, did not relate to substantive patent law, thus the Federal Circuit applied the law of the circuit which the district court is located, in this case the 5th Circuit.
On March 1, 2010, the district court vacated its June 30, 2009 order that denied Nintendo's Motion to Transfer and transferred the matter to the United States District Court for the Western District of Washington.
We will continue to follow the case as it resumes in the Western District of Washington.