Judge Smith Severs Patent Claims Against Multiple Defendants

Posted on January 23, 2012 by Dabney Carr

While the AIA bars the joinder of patent infringement claims against multiple defendants (discussed here), there are still a few pre-AIA suits alleging that multiple defendants independently infringed the same patents. Judge Smith recently became the latest Eastern District of Virginia judge to dismiss such a suit for improper joinder. Automated Tracking Solutions, LLC v. Awarepoint Corp., et al., Case No. 2:11CV424 (E.D.Va. Jan. 13, 2012), found here.

Automated Tracking accused five separate defendants of infringing four different patents. According to the defendants, the Complaint asserted different patent claims against each defendant’s product, and so there was no commonality at all between the claims. In response, Automated Tracking asserted only that joinder of all claims into one suit created significant efficiencies and that there was no evidence of prejudice from proceeding jointly.

Unfortunately for Automated Tracking, Rule 20 does not allow joinder based solely on efficiency and lack of prejudice. As Judge Smith pointed out, claims against separate defendants must also arise out of the same transaction, occurrence or series of transactions and occurrences. Judge Smith also rejected Automated Tracking’s claims of judicial economy, holding that the “type of joinder in the case at bar represents judicial ineconomy and serves no purpose but to thwart the rules of proper procedure for filing separate lawsuits.” 

Judge Smith dismissed all but Awarepoint, the first named defendant. As of this date, Automated Tracking has re-filed suit against three of the dismissed defendants, and those cases have been assigned to separate judges in Alexandria and Norfolk. It will be interesting to see whether and to what extent the district judges handling these cases attempt to coordinate claim construction, discovery and other pre-trial matters.

Automated Tracking also provides an interesting contrast to Judge Cacheris’ recent decision in Coach, Inc. v. 1941 coachoutletstores.com to allow joinder of claims under the ACPA against 356 unrelated alleged cybersquatters. It is difficult to articulate a distinction between the two decisions other than that practical considerations support allowing a plaintiff  to join claims against multiple accused cybersquatters, but those same considerations do not apply to other types of litigation, including patent litigation.

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Coach v. 356 Cybersquatters - Improper Joinder?

Posted on January 16, 2012 by Robert Angle

In Coach, Inc., v. 1941 coachoutletstores.com, Civil Action No. 1:11cv309 (JCC/JFA), Coach, Inc., the well-known leather goods company, sought to enjoin 356 alleged cybersquatters – almost all of which registered domain names in Hong Kong or China – from using Coach’s registered trademarks as part of the alleged cybersquatters’ domain names.  The problem from Magistrate Judge Anderson’s perspective, however, was that many of these 356 alleged cybersquatters were unrelated to each other, and therefore Coach could not meet the “transaction or occurrence” test for joinder under Fed. R. Civ. P. 20. Thus, when Coach filed a motion for entry of default judgment, Magistrate Judge Anderson issued Report and Recommendation on Nov. 25, 2011, that found joinder improper as to 345 alleged cybersquatters, and recommended severing those defendants from the action. 

As Magistrate Judge Anderson explained in a detailed, 28 page opinion:

Simply put, the evidence presented is insufficient to establish that Coach’s claims against all of the defendant domain names are related, that they arise from the same transaction or occurrence, or that there is any joint action among all the defendant domain names that warrants relief under the ACPA in a single action.

 

Id. at 15. Magistrate Judge Anderson went on to recommend finding that the remaining 11 the defendant domain names violated the Anticybersquatting Consumer Protection Act (ACPA). A copy of Magistrate Judge Anderson’s Report and Recommendation can be found here.

 

Coach quickly appealed the Report and Recommendation, and Senior District Judge James C. Cacheris just as quickly rejected Magistrate Judge Anderson’s recommendation on misjoinder. On January 5, 2012, in a short, 5 paragraph Judgment and Order, Judge Cacheris found that the additional 345 defendant domain names had been properly joined, and thus modified Report and Recommendation to require that all 356 defendant domain names be transferred to Coach. While Judge Cacheris’s decision (found here) certainly favors expediency in a world of increasing numerous foreign cyberquatters, his opinion offers no explanation for why he disagreed with Magistrate Judge Anderson, where he found commonality between the 356 defendant domain names, or whether he interpreted Rule 20 or the ACPA differently than Magistrate Judge Anderson. Only time will tell whether litigants can continue to include multiple, unrelated cybersquatters in a single action or must bring separate actions against each of them. 
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