Judge Brinkema Stays Claims in TecSec Case Against All Defendants Except IBM
In an order entered June 4 in TecSec v. IBM, et al, Case No. 1:10CV115, Judge Brinkema in Alexandria rejected an increasingly common tactic in patent cases – suing multiple unrelated defendants on numerous patents. While the practice apparently is allowed in the Eastern District of Texas, Judge Brinkema rebuffed it – ordering that the litigation proceed solely against IBM and staying the claims against the other defendants. The Court’s June 4 Order can be found here.
TecSec’s Complaint was massive and complex. It asserted 11 patents with a total of 380 claims in the very esoteric field of computer encryption technology against 13 separate defendant groups, including IBM, Oracle, SAP, Adobe, eBay and PayPal.
The defendants responded aggressively, filing an early motion to modify the Court’s normal pretrial schedule to extend the time for discovery and to require TecSec to issue its claim charts very early -- prior to the Rule 16(b) Pretrial Conference. The defendants emphasized the extraordinary nature of the case, pointing out that TecSec would not identify which of the 380 claims it was asserting and the massive amount of discovery that was expected – including an agreement to up to 800 hours of fact-witness depositions.
Judge Brinkema swiftly issued an order the day after defendants’ motion was filed ordering the parties to appear for a hearing the following Friday and indicating that she was considering limiting the litigation to one of the named defendants. At the hearing, Judge Brinkema granted the motion and moved the case schedule back by more than two months, which is almost unprecedented in the Eastern District of Virginia. The judge also ordered TecSec to file its finalized claim charts in two weeks. Judge Brinkema’s April 30 Order can be found here.
TecSec’s claim charts did little to narrow the case. It asserted 205 of the claims against a total of 61 accused products. TecSec asserted 196 claims against 29 IBM products and no fewer than 68 claims against each of the other Defendants. Moreover, TecSec accused a diverse range of products of infringement, ranging from mainframes, to programming languages, routers, database systems and PayPal’s online payment systems.
In response, all of the defendants except IBM moved to sever and to stay the claims against them. The moving defendants pointed out that they were competitors selling unique, proprietary products and argued that FRCP 18 and 20 do not permit the joinder of multiple defendants into a single lawsuit where the claims against the defendants are unrelated.
After a hearing on June 4, Judge Brinkema agreed with the moving defendants and entered an order directing that the litigation proceed solely against IBM and that the claims against all other defendants be stayed.
Judge Brinkema did not set forth the reasoning for her decision, but two factors made TecSec a good candidate for severance:
- the large number of defendants and asserted claims made the case very unwieldy, especially under the Eastern District of Virginia’s fast trial procedures.
- none of the moving defendants moved for transfer in addition to severance. As a result, there was no danger of inconsistent verdicts and greatly lessening the possibility of inconsistent claim constructions.
The broader issue is whether the Eastern District of Virginia judges would grant severance in other multiple defendant patent cases. On that issue, there appears a clear divide between the Eastern District of Virginia and the Eastern District of Texas. We plan to address the split between the courts in detail in a follow-up blog post soon.
