Appeals court orders Novartis patent infringement case transferred out of East Texas

Marilyn Tennissen Dec. 9, 2009, 10:11am


A federal appeals court has granted a writ of mandamus to the defendant in a patent infringement suit and ordered the case be transferred out of the Eastern District of Texas.

On Dec. 2, the U.S. Court of Appeals for the Federal Circuit ruled that Chief Judge David Folsom of the Eastern District of Texas abused his discretion when he refused to transfer a patent suit against Hoffman-La Roche by drug maker Novartis over the drug Fuzeon.

"There appears to be no connection between this case and the Eastern District of Texas except that in anticipation of this litigation, Novartis' counsel in California converted into electronic format 75,000 pages of documents ... and transferred them to the offices of its litigation counsel in Texas," wrote Judge Arthur Gajarsa for the Federal Circuit.

The Federal Circuit hears all appeals for patent infringement cases.

Novartis is a California-based company, Roche is a Swiss company, Fuzeon is manufactured in Colorado and only one witness lives in Texas. Roche's attorneys petitioned the Federal Circuit and requested the case be transferred to the Eastern District of North Carolina, where Fuzeon had been developed.

The three judge panel for the Federal Circuit agreed that North Carolina was the appropriate location for the case. Judge Gajarsa said Novartis was attempting to "manipulate the propriety of venue" by claiming the case documents belonged in Texas.

The petition for writ of mandamus stemmed from a patent infringement suit filed in the Marshall Division of the Eastern District of Texas in 2007.

Novartis Vaccines and Diagnostics Inc. sued the makers of Fuzeon, a commercial HIV inhibitor drug, which had been discovered by scientists at Duke Medical Center. The scientists formed Trimeris Inc. to develop and test the drug at a lab in Morrisville, N.C., where relevant documents and records are still kept.

Trimeris then partnered with Hoffman-La Roche to manufacture and market Fuzeon. The active pharmaceutical ingredient for Fuzeon is manufactured by Roche at its Colorado facilities, then further processed by Hoffman-La Roche facilities in either Michigan or in Switzerland. Then the drug is packaged in New Jersey and marketed worldwide.

Novartis alleged that Fuzeon infringed one of its patents and filed the suit in the Eastern District of Texas, a court that has become a hot spot for patent infringement cases –both for its stream-lined procedural rules and perceived friendliness to plaintiffs.

Roche moved to transfer the suit to North Carolina, contending that there were no witnesses or any sources of proof within 100 miles of the Eastern District of Texas.

Roche also argued that the bulk of the evidence was located in North Carolina and that a trial there would be far more convenient for most of the witnesses.

Novartis opposed the motion and said that parties, proof and witnesses were spread throughout the country. It argued that 75,000 pages of documents had already been sent to the Eastern District of Texas.

Judge Folsom denied the transfer, stating it would only "shift inconveniences" for witnesses and that it was unnecessary because there were not a substantial number of witnesses closer to North Carolina than to East Texas.

But the appellate judges reversed Folsom, and ordered the transfer to North Carolina. In their order they cited recent decisions made by the Fifth Circuit – Volkswagen, TS Tech and Genentech Inc. – where transfer was granted because there was "a stark contrast in relevance, convenience and fairness between the two venues."

Novartis Vaccines and Diagnostics is represented by Sam Baxter of McKool Smith in Marshall and Rachel Krevans of Morrison & Foster in San Francisco, Calif. Also Rosemary Snider of Dallas and John Garvish II of Austin.

Roche is represented by Stephen Rabinowitz of Fried, Frank, Harris, Shriver & Jacobson in New York, N.Y., and Randy Eisensmith.

Case No. 2:07-cv-507

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