A funny thing happened last September, in the week between
Congress' passage of patent reform legislation and President
Barack Obama signing the bill into law on Sept. 16. The Eastern
District of Texas, that notorious haven of patent trolls, saw a
sudden surge in the sort of multidefendant suits the new law
would bar. I haven't seen hard numbers on the phenomenon, but,
anecdotally, some tech defendants claimed to have been hit in
two, three, even five new cases just in those few days, as
trolls rushed to file complaints before the door slammed shut on
multidefendant suits.
The timing was especially poignant for EMC Corp, which had
filed a petition for a writ of mandamus at the U.S. Court of
Appeals for the Federal Circuit on Sept. 7, the day before
Congress passed the America Invents Act. EMC asked the appeals
court to review U.S. District Judge Michael Schneider's denial
of defense motions to break up an 18-defendant suit filed by the
patent holding company Oasis Research. EMC claimed the east
Texas judge had abused his discretion and asked the Federal
Circuit for a ruling of first impression on the standard for
joinder in multidefendant patent cases.
The patent reform law made EMC's mandamus petition a
historical oddity, since the law set a standard for cases filed
after Sept. 16. (As I've reported, patent plaintiffs have
responded by filing individual suits against a multitude of defendants.) But the amped-up filing in the week before
enactment made EMC's appeal all the more pressing for
defendants without retroactive protection from the new law. A
coalition of tech companies filed an amicus brief in the EMC
case, urging the Federal Circuit to address the "egregious
misjoinder of scores of defendants" in suits predating patent
reform.
The appeals court did just that in an 18-page opinion Friday
in EMC's case. (A total of 8 of the 18 defendants in the Oasis
suit eventually joined EMC's mandamus request.) Chief Judge
Randall Rader and Judges Timothy Dyk and Kimberly Moore said
that the joiner standard employed by judges in the Eastern
District of Texas, which required only that the same patent be
at issue in claims against all of the defendants, was too
lenient. The appellate panel said it was not applying patent
reform retroactively, since Congress chose not to address
joinder in cases predating America Invents. But the judges held
there must be "substantial evidentiary overlap in the facts
giving rise to the cause of action against each defendant" to
keep them in the same case.
EMC Deputy General Counsel Krish Gupta told me that's just
what EMC wanted: a standard that doesn't parrot America Invents
but provides meaningful guidance in cases that predate the law.
He predicted that patent defense lawyers are already drafting
notices citing the ruling to judges overseeing their
multidefendant cases. "They'll be able to invoke In re EMC to
request accelerated review," Gupta said.
EMC was also represented by outside counsel at Orrick,
Herrington & Sutcliffe. A bevy of other firms, including Foley &
Lardner, Ballard Spahr, White & Case, and Knobbe, Martens, Olson
& Bear submitted briefs for other defendants. Gibson, Dunn &
Crutcher represented the tech amici. Oasis is represented by
Desmarais; name partner John Desmarais declined to comment.
(Reporting by Alison Frankel)
Follow us on Twitter @AlisonFrankel, @ReutersLegal | Like us on Facebook