Guest Post by Jennifer Furey of Cooley Manion Jones LLP and Anthony Miele of Miele Law Group PC. Furey and Miele represent Bear Creek in the JPML proceeding and in the associated actions discussed below.
Suppose a patentee determines that in order to enforce its patent rights, it must sue multiple, but unrelated, parties. An obstacle then presents itself. The patentee plaintiff may very well be forced to file separate actions in disparate jurisdictions, and now risks being overwhelmed by conflicting case schedules, duplicative discovery disputes, and especially, conflicting Markman claim construction rulings. See Scott W. Burt et al., Intellectual Property Owners Associations Committee White Paper, Impact of the Misjoinder Provision of the America Invents Act 16 (2012). One mechanism for efficiently litigating the pre-trial phase of patent infringement lawsuits pending in different districts is multidistrict litigation ("MDL") under 28 U.S.C. § 1407 ("Section 1407"). In a recent opinion in In re Bear Creek Technologies, Inc., the Judicial Panel on Multidistrict Litigation ("JPML") unequivocally held that MDL remains a viable option for parties to transfer separate patent infringement actions pending in different districts for centralized pre-trial proceedings, and that the recently enacted Leahy-Smith America Invents Act ("AIA") "does not affect [the JPML's] authority" to transfer and centralize patent litigation under Section 1407. MDL No. 2344, at 3 (J.P.M.L. May 2, 2012). After Bear Creek, plaintiffs enforcing their patent rights across multiple jurisdictions may still consider MDL as a possible option to keep infringing defendants before one court up until trial. [Download JMPL Decision Bear Creek]
Enacted on September 16, 2011, the AIA's joinder provision states that accused infringers may not, "based solely on allegations that they each have infringed" the same patent(s):
- be joined in one action as defendants or counterclaim defendants, or
- have their actions consolidated for trial.
35 U.S.C. § 299. In contrast, centralization in MDL under Section 1407 requires that:
- actions are pending in different districts;
- the actions involve "one or more common questions of fact;" and
- transfer and consolidation of pretrial proceedings is convenient for the parties and witnesses, and promotes "the just and efficient conduct of such actions."
28 U.S.C. § 1407.
After the enactment of the AIA, Vonage in Bear Creek argued that the AIA's joinder restriction applied to Section 1407, to no avail. The JPML found the AIA "does not alter [its] authority to order pretrial centralization." MDL No. 2344 at 2. The JPML reasoned that there was "no overlap" between the AIA and Section 1407, emphasizing the different standards of the two statutes, and contrasting the AIA's focus on joinder and consolidation at trial with "Section 1407's express focus on transfer for pretrial proceedings." Id. at 2-3. Finding that both the plain language and legislative history of the AIA were "silent as to the conduct of pretrial proceedings" and did not "mention Section 1407," the JPML noted that if Congress intended the AIA to limit the JPML's authority under Section 1407, it would have "done so explicitly." Id.
After holding that the AIA did not apply, the JPML then concluded that transfer and centralization was appropriate in Bear Creek because the separate actions shared "substantial background questions of fact" concerning the "validity and enforceability" of the patent-in-suit, as well as "claim construction." Id. at 4. The JPML emphasized that "centralization offers substantial savings in terms of judicial economy by having a single judge become acquainted with the complex patented technology and construing the patent in a consistent fashion (as opposed to having six judges separately decide such issues)."
In light of the AIA's enactment, MDL can be an invaluable tool for patentee-plaintiffs to efficiently litigate their patent rights against multiple infringers with actions pending in different courts through Markman and summary judgment. Under Bear Creek, the AIA is not a magic bullet allowing patent defendants to escape multi-party litigation—they may be brought before one court up until trial in MDL under Section 1407.