In Re Nintendo of America, Inc.
756 F.3d 1363
Fed. Cir.2014Background
- Secure Axcess sued Nintendo of America and eleven retailers in the Eastern District of Texas for patent infringement involving Nintendo DS systems sold both standalone and bundled.
- Nintendo is headquartered in Redmond, Washington; key witnesses, documents, and decision-makers are located there. Secure Axcess lists Plano, Texas as its principal place of business.
- Petitioners (Nintendo and the Retailers) moved to sever the claims against Nintendo and transfer those claims to the Western District of Washington, and to stay the remaining claims against the Retailers; the Retailers stipulated they would be bound by the transferee court's judgment.
- The district court denied severance and transfer, reasoning that Secure Axcess might obtain a higher royalty from the Retailers (due to retail pricing and bundling) and thus should be allowed to pursue all defendants simultaneously.
- On mandamus review the Federal Circuit found Nintendo to be the “true defendant,” determined that severance and transfer would materially advance the administration of justice, and directed the district court to grant the motion to sever, transfer, and stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court should sever Nintendo and transfer its claims under 28 U.S.C. § 1404(a) and Fed. R. Civ. P. 21 | Secure Axcess argued its chosen forum (Eastern District of Texas) is proper and that claims should remain joined to seek higher royalties from Retailers | Petitioners argued severance and transfer to Western District of Washington is proper because Nintendo (true defendant) and most witnesses/documents are located there; Retailers lack relevant design/development information | Court ordered severance and transfer: Nintendo is the true defendant and transfer materially advances justice; district court abused discretion by denying motion |
| Applicability of customer-suit principles to forum/transfer analysis | Secure Axcess relied on forum choice and potential higher retailer damages to justify no severance | Petitioners argued customer-suit rationale supports prioritizing manufacturer litigation to avoid burdening customers and to resolve core issues first | Court applied customer-suit reasoning: manufacturer litigation should proceed first and does not conflict with § 1404(a); supports transfer |
| Weight of plaintiff’s forum choice/home-forum deference | Secure Axcess claimed deference as plaintiff in its home venue (Plano, TX) | Petitioners argued convenience disparity (witnesses, documents, decision-makers in Washington) outweighs plaintiff’s forum choice | Court held deference to plaintiff’s forum is overcome by marked disparity of convenience; transfer appropriate |
| Whether plaintiff’s tactical desire for a higher royalty from Retailers defeats transfer | Secure Axcess asserted severance would allow Retailers to be pursued separately for potentially higher royalties | Petitioners argued any retailer recovery depends on success against Nintendo, so transferring Nintendo’s case first is efficient | Court rejected plaintiff’s tactical argument: recovery from Retailers contingent on success against Nintendo; transferring Nintendo is proper |
Key Cases Cited
- Wyndham Assocs. v. Bintliff, 398 F.2d 614 (2d Cir. 1968) (severance and transfer may be appropriate to advance administration of justice)
- In re Toyota Motor Corp., 747 F.3d 1338 (Fed. Cir. 2014) (mandamus relief where trial court abused discretion in venue/severance posture)
- In re EMC Corp., 677 F.3d 1351 (Fed. Cir. 2012) (venue transfer and mandamus principles)
- Spread Spectrum Screening LLC v. Eastman Kodak Co., 657 F.3d 1349 (Fed. Cir. 2011) (manufacturer/customer suit principles and case prioritization)
- Katz v. Lear Siegler, Inc., 909 F.2d 1459 (Fed. Cir. 1990) (customer-suit exception reasoning; prioritize manufacturer suit)
- Codex Corp. v. Milgo Elec. Corp., 553 F.2d 735 (1st Cir. 1977) (manufacturer often the true defendant in customer suits)
- Van Dusen v. Barrack, 376 U.S. 612 (1964) (§ 1404(a) purpose: prevent waste and protect convenience)
- In re Microsoft Corp., 630 F.3d 1361 (Fed. Cir. 2011) (forum deference can be overcome by marked convenience disparity)
- In re Hoffmann-La Roche Inc., 587 F.3d 1333 (Fed. Cir. 2009) (transfer where convenience disparity outweighs plaintiff's choice)
- In re Nintendo Co., 589 F.3d 1194 (Fed. Cir. 2009) (contrast of venue relevance and convenience)