Michael C. Smith 2012-12-26 02:18:33
The most significant development in patent litigation for Texas practitioners in 2012 has been the management of multi-defendant patent cases in the wake of two events: (1) the passage of the Leahy-Smith America Invents Act in September 2011, which provided a special rule for joinder in patent infringement cases; and (2) the Federal Circuit’s ruling interpreting Federal Rule of Civil Procedure 19 in In re EMC in April 2012. Before In re EMC, a trend had developed in patent infringement litigation of patent holders filing cases accusing numerous defendants of infringing the same patent. In response to assertions that the claims were misjoined under Rule 19, some district courts held that infringement cases against manufacturers of different products were not properly joined, while other courts held that joinder was proper if the products were sufficiently similar. In September 2011, as part of the AIA, Congress enacted a special statute, 35 USC § 299, which eliminated assertion of the same patent as the sole basis for joinder of infringement claims for cases filed after the effective date of the act. Instead, joinder of unrelated defendants in a case or for trial is only proper, in general, when they involve the same product or process. Seven months later in In re EMC, the Federal Circuit held that Rule 19 did not permit joinder of infringement cases against unrelated defendants simply because the same patent was asserted against each, but neither did it prohibit joinder of unrelated defendants where there was a sufficient common aggregate of facts. It also emphasized that even if joinder was not appropriate, courts still had substantial discretion to consolidate and sever cases as needed. Following passage of the America Invents Act, most plaintiffs complied by splitting their newly-filed claims into what became known as “serially filed cases” where the plaintiff would file, for example, a dozen separate cases. Previously, this would have been one case against a dozen defendants. And after In re EMC, defendants filed new or renewed motions to sever in cases filed before the effective date of the AIA, which had much the same effect of splitting cases up by product or manufacturer. This had the effect of exploding the dockets of every federal court across the country in which substantial numbers of patent cases had been filed. And not just in numbers of cases filed — the number of separate initial dispositive and venue motions (Twombly, personal jurisdiction, venue, etc.) also increased exponentially, affecting the courts’ time to decision on these motions. The management solution adopted by some courts, including many in the patent-heavy Eastern District of Texas has been to use their discretion referenced in In re EMC to consolidate the cases for pretrial purposes only, excluding consideration of motions to transfer venue and actual trial, both of which occur on a defendant by defendant basis. Accordingly, cases involving claims of the infringement of the same patents have their common issues, most notably claims construction, addressed together, while the defendant-specific issues of venue and trial are handled in the separate cases. MICHAEL C. SMITH is a partner in Siebman, Burg, Phillips & Smith in Marshall, where he focuses on complex commercial and patent litigation in federal court. He chairs the Litigation Section of the State Bar of Texas and the Board of Editors of the Texas Bar Journal. He also maintains the Eastern District of Texas Federal Court Practice blog at EDTexweblog.com.
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