By Cara Salvatore

Law360 (December 23, 2020, 3:49 PM EST) -- The Federal Circuit ruled Wednesday that Texas federal Judge Alan Albright was wrong to move a January patent trial against Intel from a city where in-person trials are halted due to the pandemic to one where they're still being held.

Ruling on appellate papers filed by Intel as part of its sprawling patent litigation with holding company VLSI Technology LLC, the Federal Circuit agreed that Judge Albright had no basis to order last month that only the January trial — as opposed to the whole case — be transferred to the Waco division of the Western District of Texas, where Albright is the only permanent district judge.

The case, in which Intel says VLSI is seeking billions of dollars in damages, had been set to go to trial in the district's Austin division, but trials are not being held there because of the coronavirus pandemic, while the Waco courthouse remains open.

Of the two authorities Albright had cited for moving only a trial — Federal Rule of Civil Procedure 77(b) and a judge's inherent docket-management sovereignty — "neither authority authorizes the order at issue," the Federal Circuit said, and the decision "amounts to a clear abuse of discretion."

However, the court said that "we do not hold that the district court lacks the ability to effectuate holding trial in the Waco Division. We only hold that it must effectuate such result under appropriate statutory authority," such as moving the whole case to Waco, not just the trial.

While the court vacated the November order moving only the trial to Waco, it said it took no position on the notion of moving the entire case back to Waco for convenience's sake — only that Judge Albright "failed to perform this analysis."

It was not immediately clear Wednesday what Judge Albright would do with respect to the Jan. 11 trial date. But after the Federal Circuit issued its ruling, VLSI filed a motion in the district court case asking Judge Albright to transfer the whole case to Waco, saying that is clearly the more convenient venue since the Austin courthouse is closed. It asked him to take up the request at a Dec. 28 hearing.

"Enormous time, energy, and nonrefundable economic investment has gone into planning for a January 11 trial," VLSI said. "Thus, VLSI respectfully requests that this court transfer the action to the Waco Division."

The suit going to trial includes three patents for voltage-based and other techniques to speed up computer chips, and specifically targets Intel's Ivy Bridge and Skylake processors. It had actually begun in Waco, when VLSI filed there in April 2019.

But in October 2019, Judge Albright moved the case from Waco to Austin under a rule called Section 1404(a), which does allow the transfer of an entire case.

The parameters of the rule are clear, though, the Federal Circuit said Wednesday.

Section "1404(a) cannot authorize transfer of just the trial from one judicial division to another," it said. "Intel generally has a 'statutory right' to have this case tried in the division in which the action lies."

Though trial is set for Jan. 11, Intel asked Judge Albright to delay it until March or April given the still-increasing spread of the coronavirus pandemic in the U.S. He denied that request earlier this month.

At a hearing on that motion, the judge told a lawyer for Intel that he was getting better information about the local spread of the COVID-19 pandemic from his wife, who works at a Waco hospital's intensive care unit, than Intel's own information.

Intel presented data that intensive care units in the Waco courthouse's county, McLennan County, are at nearly 100% capacity. But Judge Albright said he had, "probably better than anyone on this phone call," firsthand knowledge of "what's going on inside the hospitals — at least her hospital," Judge Albright told Intel, referring to his wife's job as a nurse at Ascension Providence Hospital in Waco.

Another Texas federal jurist, Judge Rodney Gilstrap, has postponed all jury trials in the state's Eastern District until March.

Representatives for the parties were not immediately available for comment.

The patents-in-suit are U.S. Patent Nos. 7,725,759; 7,523,373; and 8,156,357.

VLSI is represented by J. Mark Mann, G. Blake Thompson and Andy Tindel of Mann Tindel Thompson; Craig Cherry of Haley & Olson PC; and Morgan Chu, Benjamin Hattenbach, Keith Orso, Christopher Abernethy, Amy Proctor, Dominik Slusarczyk, Charlotte Wen, Brian Weissenberg, Jordan Nafekh, Michael Strub Jr. and Babak Redjaian of Irell & Manella LLP.

Intel is represented by William Lee, Louis Tompros, Kate Saxton, Gregory Lantier and Amanda Major of WilmerHale; J. Stephen Ravel of Kelly Hart & Hallman LLP; and James Wren of Baylor Law School.

The district court case is VLSI Technology LLC v. Intel Corp., case number 1:19-cv-00977, in the U.S. District Court for the Western District of Texas. The appellate case is In re: Intel Corp., case number 21-105, in the U.S. Court of Appeals for the Federal Circuit.

--Additional reporting by Andrew Karpan, Ryan Davis, Katie Buehler and Lauren Berg. Editing by Alyssa Miller.

Update: This story has been updated with additional detail from the Federal Circuit's order and a response filed in court by VLSI Technology LLC.

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