Recently in Multi-defendant Litigation Category

Eastern District of Texas Orders Severance of Multi-Defendant Action Sua Sponte to Avoid One "Massive" and "Unmanageable" Trial

January 14, 2013

In a patent infringement action brought by Alexsam, Inc. ("Alexsam") against thirteen separate defendants, grouped into seven issuers of electronic gift cards, the Eastern District of Texas decided to sever the defendants as the case got closer to trial. As explained by the court, "[t]his is the sixth lawsuit that Alexsam has pursued in the Eastern District of Texas alleging infringement of the patents-in-suit, U.S. Patent Nos. 6,000,608 ("the '608 patent") and 6,189,787 ("the '787 patent"), which relate to stored value/debit cards. The final pretrial conference is currently scheduled March 4, 2013, with a single trial to begin no more than four weeks later. Given the unique issues that exist within the defendant/defendant groups and the complexities involved in attempting to try this case in one trial in less than two months, the Court must sever the seven groups of defendants into their own separate cause of action."

Continue reading "Eastern District of Texas Orders Severance of Multi-Defendant Action Sua Sponte to Avoid One "Massive" and "Unmanageable" Trial" »

Verizon Successfully Moves to Sever and Stay Patent Infringement Action Based on "Customer Suit Exception"

August 31, 2012

Plaintiff Micro Enhanced Technology Inc. ("Micro") filed a patent infringement action against Videx, Inc., accusing Videx of infringing six patents. Micro subsequently amended its complaint to add two defendants, Verizon Wireless ("Verizon") and ITC Holdings Corp. ("ITC"), both of whom are customers of Videx. Verizon filed a motion to dismiss and a motion to sever and stay.

As the district court explained, Fed.R.Civ.P. 21 "gives the Court discretion to sever any claim against any party" and that "[c]onsistent with that rule, courts have recognized that when a patentee sues both the manufacturer and its customers, 'litigation against or brought by the manufacturer of infringing goods takes precedence over a suit by the patent owner against customers of the manufacturer.' Speed Spectrum Screening LLC v. Eastman Kodak Co., 657 F.3d 1349, 1357 (Fed. Cir. 2011)." The district court further explained that this doctrine is referred to as the "customer suit exception" and "is based on the recognition that a manufacturer is presumed to have a 'greater interest in defending its actions against charges of patent infringement [than a customer may]; and to guard against the possibility of abuse.' Kahn v. Gen. Motors Corp., 899 F.2d 1078, 1081 (Fed. Cir. 1989); see also Spread Spectrum Screening, LLC v. Eastman Kodak Co., 2010 WL 3516106, at *2-3 (N.D. Sept. 1, 2010) (severing customer defendants and transferring claims against manufacturer under the notion that the customers were 'peripheral' to the infringement allegations)." The district court also noted that district courts have broad discretion to control their dockets by staying proceedings, as long as the stay is not indefinite or otherwise excessive.

Continue reading "Verizon Successfully Moves to Sever and Stay Patent Infringement Action Based on "Customer Suit Exception"" »

Multi-District Panel Denies Transfer Where Plaintiff Had History of Licensing and Prior Actions Had Settled Early in Litigation

August 13, 2012

The patent holder, Genetic Technologies Limited ("GT") sought centralization in the District of Colorado or, alternatively, in the Northern District of California of six actions involving the alleged infringement of a patent concerning methods of genetic testing. The six actions were pending in the Northern District of California, the District of Connecticut, the Middle District of North Carolina and three actions in the District of Delaware. All of the responding defendants opposed centralization.

The Panel found that centralization was not appropriate and would not serve the convenience of the parties and witnesses or further the just and efficient conduct of the litigation. Several factors weighed against centralization, particularly the patent holder's litigation history. "Several factors weigh against centralization. The patent's litigation history suggests that most actions that have been filed in the past several years have not required significant judicial attention. GT has filed at least nine actions over the course of the past nine years against at least 24 defendants, and only one case has proceeded to claim construction." In addition, GT's extensive licensing activities also weighed against centralization. "As in In re ArrivalStar, the litigation history of similar cases suggests that the advantages centralization typically affords - i.e., reducing duplicative discovery and motion practice, etc. - may not be relevant to most litigants. Further, GT has a fairly extensive licensing history, reportedly issuing licenses for the technology to over 60 entities."

Continue reading "Multi-District Panel Denies Transfer Where Plaintiff Had History of Licensing and Prior Actions Had Settled Early in Litigation" »

Multi-District Panel Rules That America Invents Act Does Not Bar Centralization of Multiple Defendants in Single District

May 16, 2012

Bear Creek Technologies, Inc. ("Bear Creek") is the patent holder in fourteen patent infringement actions pending in three different district courts. Bear Creek moved for centralization in the District of Delaware or, alternatively, the Eastern District of Virginia. In each of the cases, Bear Creek alleged that various telecommunications companies infringed the Bear Creek patent and the various telecommunications companies raised questions surrounding the validity or enforceability of the patent.

Certain of the defendants did not oppose centralization but suggested that the district should be either Delaware or the Eastern District of Pennsylvania. Other defendants opposed centralization and the Vonage defendants asserted that the America Invents Act ("AIA") limits centralization under 28 U.S.C. ยง 1407.

Continue reading "Multi-District Panel Rules That America Invents Act Does Not Bar Centralization of Multiple Defendants in Single District" »

Judge Posner Consolidates Multiple Defendants Sued in Separate Actions and Raises Questions Whether Plaintiffs, if Successful in Establishing Liability, Will Be Entitled to Non-Trivial Damages

April 2, 2012

As a preliminary matter, Judge Posner consolidated the six patent cases that were filed by Brandeis University against various defendants, finding that they involve a number of common issues of law and that judicial efficiency would be maximized by consolidation. "These six cases are hereby consolidated under 1:12-cv-01508, pursuant to Fed. P. 42(a). The parties agree that they involve a number of common issues of law, and I believe that judicial efficiency will be maximized by consolidation. I will consider in due course the defendants' request for separate trials of issues, particularly damages, that vary significantly across the six cases."

Continue reading "Judge Posner Consolidates Multiple Defendants Sued in Separate Actions and Raises Questions Whether Plaintiffs, if Successful in Establishing Liability, Will Be Entitled to Non-Trivial Damages" »

Brandeis University's Patent Infringement Case Over Cookies Crumbles Against Multiple Defendants and the Court Transfers All the Crums to Another District

February 29, 2012

Plaintiff Brandeis University ("Brandeis") alleged that it was the owner of the patents-in-suit and plaintiff GFA Brands, Inc. ("GFA") alleged that it was the exclusive licensee of the patents-in-suit. Plaintiffs asserted that the defendants infringed the patents by making, using, selling or importing various products such as cookies, cookie dough and spreads. A number of the defendants moved to transfer or sever.

With respect to the motions to sever, some of the defendants asserted that the joinder violated Fed.R.Civ.P. 20. Although most of the parties agreed that there were common questions of fact and law, the question remained whether plaintiffs' claims against the different defendants arose out of the same transaction, occurrence or series of transactions or occurrences.

Continue reading "Brandeis University's Patent Infringement Case Over Cookies Crumbles Against Multiple Defendants and the Court Transfers All the Crums to Another District " »

Multidistrict Panel Transfers Patent Cases Pending in District Courts in Texas and Delaware to the District of Maryland Even Though No Cases Were Pending in Maryland

December 30, 2011

Defendants in two Eastern District of Texas actions moved to centralize their cases in the District of Delaware or in another transferee forum. Three actions involving the same plaintiff and patent were already pending in the District of Delaware. Two of the defendants in the Delaware actions supported the motion to transfer and centralize, while the other defendants in the Delaware actions did not oppose the motion. The patent holder opposed centralization and, alternatively, suggested selecting the Eastern District of Texas as the transferee forum.

The panel found that the five actions involved common questions of fact and that centralization would serve the convenience of the parties and witness and promote the just and efficient conduct of the litigation. To support this conclusion, the panel noted that all five actions involve factual question regarding the infringement and/or validity of a single patent that relates to basic web presentation technologies, such as "previews" that pop up when a mouse rolls over certain site features. The panel found 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."

Continue reading "Multidistrict Panel Transfers Patent Cases Pending in District Courts in Texas and Delaware to the District of Maryland Even Though No Cases Were Pending in Maryland" »

Multidistrict Panel Denies Transfer in Patent Infringement Action Involving Multiple Defendants and Patents in Different District Courts

December 26, 2011

Plaintiffs asserted patents relating to computer-based messaging products and services against numerous defendants, including Facebook, LinkedIn, E*Trade and Verizon in two different district courts. The patents at issue named Charles Bobo as an inventor and one of the earlier patents in the Bobo family of patents was asserted in six of the actions pending in the Central District of California. Five later-issued patents in the Bobo family were asserted in actions in the Eastern District of Texas.

The panel considered whether centralization in one district would serve the convenience of the parties and witnesses or further the just and efficient conduct of the litigation. Many of the defendants supported centralization, while Verizon opposed centralization. The plaintiffs opposed the motion to centralize the cases.

Continue reading "Multidistrict Panel Denies Transfer in Patent Infringement Action Involving Multiple Defendants and Patents in Different District Courts" »

L.L. Bean Wins Motion to Sever and Transfer Where Plaintiff's "Lame" Response That All Accused Products Were Similar Is Insufficient to Establish Proper Joinder

December 23, 2011

Pinpoint filed a patent infringement action in the Northern District of Illinois against L.L. Bean, Orbitz, Groupon and Hotwire for allegedly infringing three patents pertaining to accessing data using customer profiles. L.L. Bean filed a motion to sever and transfer to the District of Maine. The district court granted the motion and transferred the case against L.L. Bean to Maine.

The first step in the district court's analysis was to analyze whether L.L. was misjoined in the action. Focusing on Fed.R.Civ.P. 20(a)(2), and in particular the requirement that "any right to relief is asserted against [the defendants] jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences," the district court found that joinder was not proper. "As L.L. Bean points out, defendants are unrelated companies that have nothing in common except Pinpoint's allegation that they have infringed the same three patents." Referring to Pinpoint's response as "lame," the district court found that the argument that all of the accused products are extremely similar to be insufficient to satisfy the first prong of Fed.R.Civ.P. 20(a)(2). "The defendants' operations of unrelated websites does not establish a common transaction or occurrence.

Continue reading "L.L. Bean Wins Motion to Sever and Transfer Where Plaintiff's "Lame" Response That All Accused Products Were Similar Is Insufficient to Establish Proper Joinder" »

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."

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

Plaintiff Gives Thanks That Texas Court Denied Prevailing Defendants Their Attorneys' Fees Despite Plaintiff's Claim Construction and Infringement Theories That "Stretch[ed] the Bounds of Reasonableness"

November 24, 2011

In three patent cases brought by the same plaintiff, Raylon LLC, against numerous defendants, Judge Davis of the Eastern District of Texas denied Rule 11 sanctions and motions for attorneys' fees under Section 285 of the Patent Statute, and Section 1927 of Title 28.

Following the grant of summary judgment of noninfringement, Defendants filed motions contending that Raylon's infringement theory was "so legally untenable" that fees and costs should be awarded under Sections 285 and 1927. Defendants earlier had filed a Rule 11 motion seeking sanctions. Raylon asserted U.S. Patent No. 6,655,589 ("the '589 patent") against all of the defendants. All of the claims of the '589 patent require a "display being pivotably mounted on said housing." Raylon argued that this should be construed to mean "an electronic device attached to a housing that visually presents information and allows the display to be moved or pivoted relative to the viewer's perspective" and alleged that infringement was found where the entire device, not just the display, could be pivoted to the view. Defendant EZ Tag sought a construction of the term to mean that "an integral computer screen which can move positions with regard to the computer housing and is not maintained in a fixed position." The remaining defendants argued that it should mean "the display must be mounted on the housing and the mounting of the display on the housing must be pivotable so that the display and housing may pivot with respect to each other." The Court construed the term as "the display must be mounted on the housing so that the display and housing may pivot with respect to each other." Because it was undisputed that all of the defendants' accused products had displays that were rigidly mounted as to the housing, the court granted summary judgment of noninfringement, both literally and under the doctrine of equivalents.

Continue reading "Plaintiff Gives Thanks That Texas Court Denied Prevailing Defendants Their Attorneys' Fees Despite Plaintiff's Claim Construction and Infringement Theories That "Stretch[ed] the Bounds of Reasonableness"" »

Motion to Stay Based on Customer Suit Exception Denied as Premature Where Infringement Contentions Had Not Yet Been Served

November 23, 2011

The plaintiff sued over 500 defendants for patent infringement in multiple actions in the United States District Court for the Eastern District of Texas. The patent-at-issue claims a "'software interface' that may provide a 'map of a selected geographic area' such that 'information which is associated with particular geographic locations,' such as 'good and services,' 'can be readily accessed.'" Eighty-one defendants in the various actions moved to stay the case pursuant to the "customer suit exception" to the first-to-file rule.

The moving defendants contended that their case should be stayed pending the outcome of a later filed declaratory judgment action brought by Microsoft and Google, among others, in the District of Delaware, because the declaratory judgment actions were manufacturer suits. The moving defendants contended that they merely license the relevant software from the manufacturers. Accordingly, the moving defendants contended a resolution of those lawsuits may resolve the cases against the licensees.

Continue reading "Motion to Stay Based on Customer Suit Exception Denied as Premature Where Infringement Contentions Had Not Yet Been Served" »

Customers Severed in Multi-Defendant Litigation and Case Against Suppliers Transferred

November 14, 2011

In the wake of the new restrictions on joinder of multiple defendants after the enactment of the America Invents Act, a number of plaintiffs have still attempted to join multiple defendants in a single lawsuit. One tactic used by plaintiffs is to file suit against several customers of a supplier along with the supplier of the accused product. This type of lawsuit establishes a close connection between the defendants in that the accused product is the same across all the defendants, which likely is a permissible joinder under the new standards set forth in the America Invents Act.

Nonetheless, this new tactic is having limited success. In a recent patent infringement action in the United States District Court for the Northern District of Illinois, the plaintiff sued several customers and the supplier of an accused product. The defendants moved to sever the customer defendants from the supplier defendant and to stay the action against the customer defendant. The supplier defendant also moved to transfer the severed action against it to the Northern District of California where it was based. It also asserted that transfer was appropriate because the plaintiff was based in Southern California, much closer to the Northern District of California than the Northern District of Illinois.

Continue reading "Customers Severed in Multi-Defendant Litigation and Case Against Suppliers Transferred" »

Multiple Defendants Dismissed Based on Improper Joinder

September 30, 2011

In a ruling that is likely to become more and more common after the passage of the America Invents Act, the United States District Court for the Northern District of California dismissed all but one of the defendants in a patent infringement action for improper joinder. In February 2010, the plaintiff filed a patent infringement action against Apple, Dell, HP, Lenovo and Sony for allegedly infringing a patent for dynamic power management of solid-state memories. The plaintiff alleged that each of the defendants sells computers and/or computer systems that infringe the patent-in-suit.

Plaintiff filed a motion seeking leave to amend the complaint to join five additional defendants on the ground that the new defendants' products also allegedly infringe the patent-in-suit. The existing defendants then filed a motion to dismiss the complaint as to all but one of the defendants based on the argument that the defendants were misjoined in the action.

Continue reading "Multiple Defendants Dismissed Based on Improper Joinder" »

Dismissal of Indirect and Joint Infringement Appropriate Where Plaintiff Failed to Plead Sufficient Facts to Establish Knowledge and Control or Direction

July 22, 2011

Plaintiff filed a patent infringement suit against 17 defendants alleging direct, indirect and joint infringement. The defendants moved to dismiss for failure to state a claim. The district court granted the motions to dismiss the joint infringement and indirect infringement claims, but denied the motions to dismiss the direct infringement claims.

The patent-in-suit discloses a data processing station subscriber unit that delivers interactive or television-quality entertainment and informational content to subscribers. Each of the independent claims include a limitation requiring a plurality of sources of video text and television program channels available from a wireless television program communication network.

Continue reading "Dismissal of Indirect and Joint Infringement Appropriate Where Plaintiff Failed to Plead Sufficient Facts to Establish Knowledge and Control or Direction" »