EMC
A. In re EMC and Interpretation of Rule 20 The In re EMC decision helps to predict how the Federal Circuit may interpret § 299 because of the similarity between § 299(a) and Rule 20(a)(2). The language of § 299(a) specifically links the transaction-or-occurrence requirement of Rule 20(a)(2) to patent infringement under 35 U.S.C. § 271(a).32 In 2013, the Federal Circuit in In re Nintendo Co.33 noted that “[t]he AIA’s joinder provision is more stringent than Rule 20, and adds a requirement that the transaction or occurrence must relate to making, using, or selling of the same accused product or process.”34
32 See 35 U.S.C. § 271(a) (Supp. I 2013) (“Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.”); see also EDWARD D.
MANZO,THE AMERICA INVENTS ACT:AGUIDE TO PATENT LITIGATION AND PATENT PROCEDURE 183 (Thomson Reuters Nov.
2014 ed. 2013).
33 In re Nintendo Co., 544 F. App’x 934 (Fed. Cir. 2013).
34 Id. at 939.
Therefore, the interpretation of § 299(a) should include the requirements of Rule 20(a)(2).
The Federal Circuit in In re EMC primarily interpreted Rule 20(a)(2)(A) and shed light on several aspects of Rule 20.35 First, there are two requirements under Rule 20 for proper joinder: “(1) the claims against them must be asserted ‘with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences,’ and (2) there must be a ‘question of law or fact common to all defendants.’”36 Because of the phrase “series of transactions or occurrences” in Rule 20(a)(2)(A), the court recognized that “a single transaction is not required.”37
Second, there are two categories of possible situations where joinder is proper. In the first category,
“defendants are alleged to be jointly liable.”38 In the second category, “any right to relief is asserted against [defendants]
jointly, severally, or in the alternative.”39
Third, Rule 20 permits joinder of independent defendants “as long as their actions are part of the ‘same transaction, occurrence, or series of transactions or occurrences.’”40 The ultimate question is “under what circumstances is the joinder of independent actors permissible under Rule 20.”41
To resolve this question, the Federal Circuit started with what is not permissible. The Federal Circuit twisted the transaction-or-occurrence requirement and the requirement
35 See In re EMC Corp., 677 F.3d 1351, 1356–60 (Fed. Cir. 2012).
36 Id. at 1356.
37 Id.
38 Id.
39 Id.
40 Id.
41 In re EMC Corp., 677 F.3d at 1357.
of a common question of law or fact by stating, “Rule 20 makes clear that the existence of a single common question of law or fact alone is insufficient to satisfy the transaction-or-occurrence requirement.”42 The Federal Circuit further held that “the mere fact that infringement of the same claims of the same patent is alleged does not support joinder, even though the claims would raise common questions of claim construction and patent invalidity.”43 This statement completely overrules the minority view of joinder.44
Then, based on the case law from the Supreme Court and other circuit courts,45 the Federal Circuit concluded that joinder of independent defendants may be proper “when there is a logical relationship between the separate causes of action.”46 There are two aspects of the logical relationship test. First, “there is substantial evidentiary overlap in the facts giving rise to the cause of action against each defendant.”47 Second, “the defendants’ allegedly infringing acts, which give rise to the individual claims of infringement, must share an aggregate of operative facts.”48
To further apply the logical relationship test in the context of patent infringement, the Federal Circuit transformed the transaction-or-occurrence requirement into a two-part test for determining whether joinder of
42 Id.
43 Id.
44 See Dianne Brown Elderkin & Domingo Manuel LLagostera, Case Management Issues in Patent Infringement Litigation, 13 SEDONA CONF.J. 77, 86 (2012).
45 See In re EMC Corp., 677 F.3d at 1357–58.
46 Id. at 1358 (emphasis added).
47 Id.
48 Id.
independent defendants is appropriate under Rule 20 in patent litigation.
Under the two-part test, the first question is whether
“the accused products or processes are the same in respects relevant to the patent.”49 This sameness test mandates a district court to find that “joinder [of independent defendants] is not appropriate where different products or processes are involved.”50 If the sameness test is passed, then the second question is whether “the facts underlying the claim of infringement asserted against each defendant share an aggregate of operative facts.”51 To satisfy the transaction-or-occurrence test, a patentee is required to show “shared, overlapping facts that give rise to each cause of action, and not just distinct, albeit coincidentally identical, facts.”52 Alternatively, a patentee must prove that “there is an actual link between the facts underlying each claim of infringement.”53
In applying the transaction-or-occurrence test, although not explaining why, the Federal Circuit required district courts to consider six factors (“EMC factors”): (1)
“whether the alleged acts of infringement occurred during the same time period,” (2) “the existence of some relationship among the defendants,” (3) “the use of identically sourced components,” (4) “licensing or technology agreements between the defendants,” (5)
“overlap of the products’ or processes’ development and manufacture,” and (6) “whether the case involves a claim for
49 Id. at 1359.
50 Id. (emphasis added).
51 Id.
52 Id. (emphasis added).
53 Id. (emphasis added).
lost profits.”54 However, no single factor is dispositive. The transaction-or-occurrence test is a flexible test because “the district court enjoys considerable discretion in weighing the relevant factors.”55