Federal Circuit Clarifies Requirements for Joinder in Multi-Defendant Patent Infringement Lawsuits

On May 4, 2012, a Federal Circuit panel issued a decision that narrowed the conditions under which plaintiffs can include multiple unrelated defendants in claims of patent infringement. The ruling, which only applies to lawsuits filed before the America Invents Act took effect in September 2011, blocks joinder in multi-defendant patent infringement cases where the only commonality is the alleged infringement of the same patent(s).

For your reference, here’s a quick roundup of legal commentary on the ruling:

In Re EMC: Federal Circuit Limits Joinder to Pre-AIA Cases (White & Case LLP)

“The decision is the result of the Federal Circuit granting a writ of mandamus filed by EMC and joined by petitioners Iron Mountain, Carbonite, Go Daddy, Pro Softnet and Oracle. The decision addressed the incorrect joinder test used by the Eastern District of Texas and directs the district court to reconsider severance under the ‘correct test.’ The Eastern District of Texas applied an incorrect transaction-or-occurrence test, finding joinder proper because the accused services were ‘not dramatically different’ and that questions of validity and claim construction are questions common to all defendants.” Read the full update>>

Patent Litigation Alert: Federal Circuit Clarifies Standard for Joinder of Multiple Defendants in Patent Infringement Cases (Fenwick & West LLP)

“Applying the proper logical relationship test, the Federal Circuit held that joinder in patent cases ‘is not appropriate where different products or processes are involved.’ However, simply showing that the accused products are the same is not enough. As the Federal Circuit explained:

To be part of the ‘same transaction’ requires shared, overlapping facts that give rise to each cause of action, and not just distinct, albeit coincidentally identical, facts. The sameness of the accused products is not enough to establish that claims of infringement arise from the ‘same transaction.’ Unless there is an actual link between the facts underlying each claim of infringement, independently developed products using differently sourced parts are not part of the same transaction, even if they are otherwise coincidentally identical.” Read the full update>>

Say Goodbye to Your Co-Defendants: Federal Circuit Imposes New Requirements for Joinder in Pre-AIA Cases (Morrison & Foerster LLP)

“The new standard will ‘have an immediate impact on the numerous multi-defendant case filed just before the enactment of the [America Invents Act],’ EMC’s deputy general counsel, Krish Gupta, told the Litigation Daily. Indeed, the very same day that the Federal Circuit issued its ruling, ‘some of the over 300 defendants in an Eastern District of Texas patent suit brought by GeoTag Inc. . . . asked the court to take notice of the decision when considering their pending motions to dismiss for misjoinder.’ The new standard may also help certain defendants transfer patent cases out of plaintiff-friendly venues such as the Eastern District of Texas. The Federal Circuit’s reminder that parties may use consolidation and MDL even when joinder is improper may mitigate the decision’s impact for many cases. Also, the legal standard under the AIA will become increasingly important over time. Nonetheless, the EMC decision provides important new guidance for joinder and venue in pre-AIA patent cases involving multiple unrelated defendants.” Read the full update>>

Federal Circuit Sets Standard for Joinder in Multidefendant Patent Cases (Morgan Lewis)

“The court also, however, took care to point out that district courts have ‘considerable discretion’ not only in how they apply the relevant factors but also in their ability ‘to consolidate cases for discovery and for trial under Rule 42 where venue is proper and there is only “a common question of law or fact.”’

For multidefendant patent cases filed before the AIA was enacted, it will now be easier for defendants to get the claims severed into separate actions, but it remains to be seen how great the practical impact of that will be if the separate cases are then consolidated for purposes of discovery and/or trial.” Read the full update>>

Related Reading:

The America Invents Act Redefines Jurisdiction Over Patent Term Adjustment Civil Actions (Patton Boggs LLP)

“When the America Invents Act (AIA) was enacted on September 16, 2011, it effectively preempted the Administrative Procedures Act (APA) regarding jurisdiction over civil actions brought by patentees challenging patent term adjustment calculations by Directors of the U.S. Patent and Trademark Office. Previously, pursuant to Section 154(b)(4) of the patent statute and the APA, jurisdiction over civil actions relating to patent term adjustment calculations was in the U.S. District Court for the District of Columbia. Under Section 9 of the AIA, jurisdiction now lies in the U.S. District Court for the Eastern District of Virginia.” Read the full update>>

The America Invents Act Does Not Preclude Consolidating Cases in Multidistrict Litigation (Patton Boggs LLP)

“The Judicial Panel on Multidistrict Litigation (JPML) recently ruled that multidistrict litigation remains a viable option for parties to transfer and centralize pretrial proceedings for separate patent infringement actions pending in different district courts. In In re Bear Creek Technologies, Inc., the JPML granted the patentholder’s motion to transfer 14 actions in three districts to the District of Delaware, holding that the American Invents Act does not preclude the panel from centralizing patent litigation.” Read the full update>>

What A Difference An MDL Transfer Makes (Dechert LLP)

“Welsh originated in Missouri state court, and demonstrates the lengths to which plaintiffs will go if given free reign to misjoin plaintiffs and defendants in order to defeat diversity. Missouri, you see, is in the Eighth Circuit, and that circuit has essentially refused to recognize fraudulent misjoinder. See In re Prempro Products Liability Litigation. Here, the defendants were saved from the grotesque misjoinders allowed by the Eighth Circuit by the felicitiously timed creation of the Fosamax MDL, venued in New Jersey. Unlike the Eighth Circuit, the Third Circuit recognizes fraudulent misjoinder.” Read the full update>>

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