Multidistrict Litigation: The Future of Multi-Defendant Cases After the America Invents Act?

December 19, 2011

The plaintiff filed multiple patent infringement actions against seven different defendants in many different district courts. The plaintiff moved to centralize the patent litigation in the Eastern District of Texas where there were seven actions pending in five separate districts. The responding defendants all opposed centralization. Based on the briefing before the panel and after a hearing, the panel held that the actions involved common questions of fact and that centralization of the actions would serve the convenience of the parties and witnesses. The panel also found that centralization would promote the just and efficient conduct of the litigation. However, the panel determined that centralization was more appropriate in the Western District of Oklahoma (where one case was pending) rather than the Eastern District of Texas (where three cases were pending).

All seven actions concerned questions regarding the infringement and/or the invalidity of three patents pertaining to "smart meters" that are used to measure energy consumption and to collect those measurements over a wireless communication network. In each action, the plaintiff alleged that the defendant, each of whom are utility companies, use infringing meters covered by the patents. As a result, the panel determined that "[c]entralization will eliminate duplicative discovery, prevent inconsistent pretrial rulings (particularly on claim construction issues), and conserve the resources of the parties, their counsel and the judiciary."

The defendants argued against centralization because there was a great procedural disparity between the Eastern District of Texas action and the more recently filed action and because the plaintiff had intentionally proliferated the litigation by filing actions against end users of the meters rather than the manufacturers. The panel found that these arguments did not defeat the benefits of centralization because claim construction had not yet taken place in any action and a claim construction due to take place in the Eastern District of Texas had been postponed. In addition, the panel found that centralization "will prevent the duplication of discovery and pretrial proceedings, such as claim construction hearings, that would otherwise occur." Accordingly, centralization of the five actions was ordered.

The panel next addressed the appropriate venue. The defendants argued that if centralization were ordered, then the appropriate venue would be the Western District of Oklahoma, while the plaintiff argued that the Eastern District of Texas would be the appropriate venue. Here, the panel agreed with defendants finding that the Western District of Oklahoma "is the most appropriate transferee district. It is near Texas, where many parties are located; is in a geographically central location; and an action is already pending in that district. Most responding defendants support or do not oppose centralization in the Western District of Oklahoma, and the relative docket conditions in this district are more favorable than other proposed transferee forums."

In re: Transdata, Inc., Smart Meters Patent Litigation, MDL No. 2309 (Dec. 13, 2011)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.