“Mass Patent” Cases in the Eastern District of Virginia

As we recently posted here, TecSec v. IBM, which is pending before Judge Brinkema in the Alexandria Division, is an example of a recent trend in patent infringement litigation – a plaintiff suing multiple defendants selling different accused products. In many cases, the defendants are market competitors selling completely distinct products which have no connection to each other.

These cases resemble mass tort litigation, except that instead of multiple plaintiffs consolidating tort claims against a single defendant, in a “mass patent” case a single plaintiff consolidates multiple claims against a large group of defendants, perhaps all the defendants in the industry. For example, in TecSec the plaintiff asserted 13 patents against 11 separate groups of defendants selling widely different products.

Mass patent defendants must quickly decide whether to move to sever the claims into separate actions. In TecSec, several defendants moved to sever, and Judge Brinkema agreed to a point – she stayed the claims except those against IBM, but she did not reach the severance issue.

Fed.R.Civ. P. 20(a)(2) states that defendants may be joined in one action if “(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to the same transaction or occurrence or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action.” Since the rule is written in the conjunctive, the plaintiff must satisfy both subsections.

Subsection (B) is pretty easy to satisfy in a mass patent case – infringement claims based on a single patent almost always involve common questions of claim construction and invalidity.

The higher hurdle for a mass patent plaintiff is subsection (A). When defendants are competitors, it is almost never true that infringement claims arise out of the same transaction or occurrence. Rather, the claims arise out of distinct acts of infringement involving separate accused products.

Two Eastern District of Virginia cases have granted severance based on that essential point. In Colt Defense LLC v. Heckler & Koch Defense, Inc., 2004 U.S. Dist. LEXIS 28690 (E.D. Va. 2004), Judge Friedman severed claims of trade infringement, unfair competition and false advertising against two defendants, holding that “the overwhelming authority from other jurisdictions indicates that allegations against multiple and unrelated defendants for independent acts of patent, copyright and/or trademark infringement do not set forth claims arising from the same transaction or occurrence within the meaning of Rule 20(a).”

Likewise, in Advamtel, LLC v. AT&T Corp., 105 F.Supp.2d 507 (E.D. Va. 2000), Judge Ellis severed claims against AT&T and Sprint because the claims against the two defendants clearly did not arise out of the same series of transactions or occurrences.

Despite Judge Friedman’s reference to “overwhelming authority from other jurisdictions,” there is a competing line of cases denying severance in mass patent cases. In these cases, the Courts expand the scope of “the same transaction or occurrence” to include events that have a “logical relationship” with each other and involve a likelihood of overlapping proof. See Sprint Comm’s. Co., L.P. v. TheGlobe.com, 233 F.R.D. 615, 617 (D. Kan. 2006). Not surprisingly, many of these competing cases come out of the Eastern District of Texas. See Innovative Global Sys. v. Turnpike Global Techs. L.L.C., 2009 U.S. Dist. LEXIS 105929 (E.D. Tex. Oct. 20, 2009); Mymail Ltd. v. America Online, Inc., 223 F.R.D. 455 (E.D. Tex. 2004). These cases, however, are forced to severely twist the language of Rule 20(a), conflating the two subsections into a single inquiry, i.e., whether the claims against the two defendants involve common issues so that it would be more efficient to try the claims together.

An important factor in the Eastern District of Virginia may be whether the defendants move for transfer in addition to severance. The cases from other jurisdictions denying severance emphasize the danger of conflicting results, especially conflicting claim constructions. Such an argument will carry weight with an Eastern District of Virginia judge and could tip the scales against severance. The TecSec defendants smartly recognized this danger and moved only to sever the claims and stay all the claims except those against IBM. Alternatively, the TecSec defendants could have foregone the stay request and simply allowed the claims to proceed separately except for common issues.