Bear Creek Sidesteps AIA through MDL

As a follow up to our earlier post on this case (found here), Bear Creek successfully convinced a MDL panel to grant its motion to subject the fourteen actions it filed in three districts (Virginia, Delaware, Pennsylvania) to consolidation under 28 U.S.C. § 1407. In granting the motion, the MDL rejected the defendants’ arguments that such consolidation was precluded by the America Invents Act’s limitation on joinder of multiple defendants in a single action “based solely on allegations that they each have infringed the patent or patents in suit.” 35 U.S.C. § 299(b). The MDL panel explained that:

Transfer under Section 1407 does not transmute all transferred actions into a single action,thereby joining all defendants. Instead, the separate nature of actions transferred to an MDL is preserved throughout each action’s pendency whether the actions proceed in a coordinated or consolidated manner…. In contrast to Section 1407’s express focus on transfer for pretrial proceedings, the second portion of Section 299(b) focuses on consolidation for trial. There is no overlap between these concepts or these statutes.

Id. at 2-3 (a copy of that decision, as posted by PatentlyO, can be found here). The MDL panel concluded that “[t]he plain meaning of the AIA’s joinder provision simply does not implicate Section 1407 transfer.” Accordingly, the MDL panel held that the District of Delaware is an appropriate transferee district for pretrial proceedings and that all pretrial matters should be heard by Judge Gregory M. Sleet.

The MDL Panel’s decision may have wide-ranging impact and opens a window where the AIA appears to close the door. With the availability of MDL consolidation, plaintiffs are (again) able to pull multiple defendants into a single action for pretrial proceedings. However, given the multiple steps required for plaintiffs to take advantage of this procedure and the lack of consolidation for trial, many plaintiffs may conclude that the price of admission is too high and the resulting benefits to low to warrant pursuing MDL. Of course, only time will tell….