On September 16, 2011, the Leahy-Smith America Invents Act (“AIA”) was signed by President Obama.2 Among its important goals is the goal to minimize negative effects caused by patent enforcement on small businesses.3 In recent years, small businesses in the United States have suffered from frivolous patent litigation brought by non-practicing entities (“NPEs”) that buy patents for the purpose of litigation but do not sell the underlying products or make the underlying innovations.4 This phenomenon results partially from the practice of Rule 20 of Federal Rules of Civil Procedure (“Rule 20”) in some jurisdictions.5
Rule 20(a)(2) provides,
Persons—as well as a vessel, cargo, or other property subject to admiralty process in rem—may be joined in one action as defendants if:
(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and
(B) any question of law or fact common to all defendants will arise in the action.6
2 See Tracie L. Bryant, Note, The America Invents Act: Slaying Trolls, Limiting Joinder, 25 HARV.J.L.&TECH. 687, 694 (2012).
3 See Adam Smith, Note, Patent Trolls—An Overview of Proposed Legislation and a Solution That Benefits Small Businesses and Entrepreneurs, 9 OHIO ST.ENTREPRENEURIAL BUS.L.J. 201, 208–09 (2014).
4 See, e.g., David O. Taylor, Patent Misjoinder, 88 N.Y.U.L.REV. 652, 660 (2013); Ryan Desisto, Note, Ermont vs. The Patent Troll: Is State Action a Bridge Too Far?, 48 SUFFOLK U.L.REV. 109, 115-19 (2015).
5 See Taylor, supra note 4, at 655–56 n.12.
6 FED.R.CIV.P. 20(a)(2).
To sue different defendants jointly, a plaintiff has to plead some facts supporting a two-prong test under Rules 20(a)(2)(A) and 20(a)(2)(B).7 In the patent context, a minority of district courts have applied Rule 20 to permit joinder of independent defendants or to consolidate different patent cases merely because the same patent is infringed.8 As a result, NPEs are more likely to file a complaint against irrelevant infringers in those minority courts.9
To solve the problem, AIA § 19(d) adds 35 U.S.C. § 299.10 Basically, the new statute is similar to Rule 20. 35 U.S.C. § 299(a) provides,
[w]ith respect to any civil action arising under any Act of Congress relating to patents, other than an action or trial in which an act of infringement under section 271(e)(2) has been pled, parties that are accused infringers may be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, only if—
7 See Acevedo v. Allsup’s Convenience Stores, Inc., 600 F.3d 516, 521 (5th Cir. 2010) (“Courts have described Rule 20 as creating a two-prong test, allowing joinder of plaintiffs when (1) their claims arise out of the ‘same transaction, occurrence, or series of transactions or occurrences’ and when (2) there is at least one common question of law or fact linking all claims.”) (citations omitted).
8 See Xun (Michael) Liu, Note, Joinder under the AIA: Shifting Non-Practicing Entity Patent Assertions away from Small Businesses, 19 MICH.TELECOMM.&TECH.L.REV. 489, 503 (2013) (describing the minority view of Rule 20).
9 See Dongbiao Shen, Note, Misjoinder or Mishap? The Consequences of the AIA Joinder Provision, 29 BERKELEY TECH.L.J. 545, 551–52 (2014).
10 See Sona Karakashian, Note, A Software Patent War: The Effects of Patent Trolls on Startup Companies, Innovation, and
Entrepreneurship, 11 HASTINGS BUS.L.J. 119, 123–24 (2015).
(1) any right to relief is asserted against the parties jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process;
and
(2) questions of fact common to all defendants or counterclaim defendants will arise in the action.11
In addition, § 299(b) mandates that independent defendants cannot be joined in the same case merely because they infringe the same patent(s). Section 299(b) provides, “[f]or purposes of this subsection, accused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit.”12 Therefore, § 299(b) limits the traditional practice of Rule 20 in some minority district courts.
Section 19 of the AIA (codified at 35 U.S.C. § 299) became effective right after President Obama signed the bill.
However, not all pending cases or newly-filed cases are subject to the new joinder clause. Under AIA § 19(e), 35 U.S.C. § 299 “shall apply to any civil action commenced on or after the date of the enactment of [the AIA].”13 Thus, the joinder clause is not retroactive, and only cases filed on or after September 16, 2011 are governed by 35 U.S.C. § 299.14
11 35 U.S.C. § 299(a) (Supp. I 2013) (emphasis added).
12 35 U.S.C. § 299(b) (Supp. I 2013) (emphasis added).
13 Leahy–Smith America Invents Act, Pub. L. No. 112–29, § 19(e), 125 Stat. 284, 333 (2011) (emphasis added).
14 See In re EMC Corp., 677 F.3d 1351, 1356 (Fed. Cir. 2012) (explaining why 35 U.S.C. § 299 is not retroactive and holding that
“[t]he timing of this petition means that our decision will only govern
The legislative history of § 299 shows that Congress intended to overrule some district court decisions which permit joinder of different defendants merely because they infringe the same patent(s).15 MyMail, Ltd. v. America Online, Inc.,16 decided by the Eastern District of Texas in 2004, was the beginning of the minority view.17 The MyMail, Ltd. court developed the proposition that
“severance could be appropriate if the defendants’ methods or products were dramatically different.”18 Because there was no evidence showing any dramatic differences between the accused methods or products, the MyMail, Ltd. court permitted joinder.19 Following MyMail, Ltd., the Eastern District of Texas began to permit joinder merely because the same patents were infringed.20
a number of cases that were filed before the passage of the new joinder provision”).
15 See H.R.REP.NO. 112–98, pt.1, at 55 n.61 (2011) (“Section 299 legislatively abrogates the construction of Rule 20(a) adopted in MyMail, Ltd. v. America Online, Inc., 223 F.R.D. 455 (E.D. Tex.
2004); Sprint Communications Co. v. Theglobe.com, Inc., 233 F.R.D.
615 (D. Kan. 2006); Adrain v. Genetec Inc., 2009 WL 3063414 (E.D.
Tex. September 22, 2009); Better Educ. Inc. v. Einstruction Corp., 2010 WL 918307 (E.D. Tex. March 10, 2010); Mannatech, Inc. v.
Country Life, LLC, 2010 WL 2944574 (N.D. Tex. July 26, 2010);
Alford Safety Services, Inc., v. Hot-Hed, Inc., 2010 WL 3418233 (E.D.
La. August 24, 2010); and Eolas Technologies, Inc. v. Adobe Systems, Inc., 2010 WL 3835762 (E.D. Tex. September 28, 2010)”).
16 MyMail, Ltd. v. Am. Online, Inc., 223 F.R.D. 455 (E.D. Tex. 2004).
17 See Taylor, supra note 4, at 678–79 (“On one end of the spectrum lie decisions that allowed practically unlimited joinder of accused infringers. The leading opinion on this end of the spectrum is MyMail, Ltd. v. America Online, Inc., authored by Judge Leonard Davis of the Eastern District of Texas.”).
18 MyMail, Ltd., 223 F.R.D. at 457 (emphasis added).
19 See id. at 457–58.
20 See Bryant, supra note 2, at 698.
Even after the enactment of § 299, the Eastern District of Texas continued to follow its traditional minority view because the cases it handled were filed prior to the effective date of § 299.21 Only after In re EMC,22 a 2012 Federal Circuit case, holding that merely infringing the same patent does not support joinder under Rule 20,23 did the Eastern District of Texas start to change its methodology.24 For example, in Norman IP Holdings, LLC v. Lexmark Int’l, Inc.,25 the Eastern District of Texas applied In re EMC and held, “[t]hat the accused products or processes of the defendants are similar is not enough [to support joinder].”26
The Federal Circuit in In re EMC primarily interpreted Rule 20(a)(2)(A) in the context of patent infringement,27 as the case was not subject to the application
21 See, e.g., Imperium (IP) Holdings, Inc. v. Apple Inc., No. 4:11-CV-163, 2012 WL 461775, at *3 (E.D. Tex. Jan. 20, 2012) (applying Eolas Tech., Inc. v. Adobe Sys., Inc., No. 6:09-CV-446, 2010 WL 3835762 (E.D. Tex. Sept. 28, 2010)), report and recommendation adopted, No. 4:11-CV-163, 2012 WL 461802 (E.D. Tex. Feb. 13, 2012); Ganas, LLC v. Sabre Holdings Corp., No. 2:10-CV-320-DF, 2011 WL 8183246, at *8 (E.D. Tex. Oct. 19, 2011).
22 In re EMC Corp., 677 F.3d 1351 (Fed. Cir. 2012).
23 See id. at 1357.
24 See, e.g., Phoenix Licensing, LLC v. Aetna, Inc., No. 2:11–CV–285–
JRG, 2012 WL 3472973, at *1–2 (E.D. Tex. Aug. 15, 2012); Oasis Research, LLC v. Carbonite, Inc., No. 4:10–CV–435, 2012 WL 3544881, at *6 (E.D. Tex. Aug. 15, 2012); Norman IP Holdings, LLC v. Lexmark Int’l, Inc., No. 6:11-CV-495, 6:12CV508, 2012 WL 3307942, at *3 (E.D. Tex. Aug. 10, 2012).
25 Norman IP Holdings, LLC, 2012 WL 3307942 (applying Rule 20 to a pre-AIA lawsuit).
26 Id. at *2.
27 See In re EMC Corp., 677 F.3d at 1355–60.
of the AIA’s joinder clause.28 In addition, the Federal Circuit briefly addressed “the same accused product or process” requirement under 35 U.S.C. § 299.29 This author knows of no cases since In re EMC in which the Federal Circuit has interpreted § 299. Consequently, the In re EMC decision has guided district courts in determining whether misjoinder exists under § 299.30
One government survey has shown an increase in the number of patent lawsuits in 2011.31 This phenomenon may reflect that § 299 will restrict permissive joinder, and so NPEs have changed their strategies to file separate lawsuits against multiple defendants. But, whether district courts will apply § 299 as intended by Congress is a separate question.
This article intends to explore the applications of § 299 and to propose a “certain connection” approach to resolve the inconsistencies in applications of § 299 among some of the district courts. Part II discusses the In re EMC decision and its implications on the interpretation of § 299.
Part III and Part IV discuss the applications of § 299 by
28 See George D. Medlock Jr. & David Frist, Joinder: Over a Year after the America Invents Act, 5 LANDSLIDE 44, 44 (2013).
29 See In re EMC Corp., 677 F.3d at 1360 n.4.
30 See Shen, supra note 9, at 575–76.
31 See U.S.GOV’T ACCOUNTABILITY OFFICE,ASSESSING FACTORS THAT AFFECT PATENT INFRINGEMENT LITIGATION COULD HELP IMPROVE PATENT QUALITY 14–15 (2013),
http://www.gao.gov/assets/660/657103.pdf [http://perma.cc/E6KN-TEW6]; see also Lighting Ballast Control LLC v. Philips Elecs. N.
Am. Corp., 744 F.3d 1272, 1293 (Fed. Cir. 2014) (“This problem might increasingly exist in light of the AIA’s limits on the number of accused infringers that can be joined as defendants in one lawsuit, thereby creating the possibility of more lawsuits on the same patent, and more inconsistency, than existed in the past.”)..”)..”) cert.
granted, judgment vacated sub nom. Lighting Ballast Control LLC v.
Universal Lighting Techs, Inc., 135 S. Ct. 1173 (2015) abrogated by Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (2015).
district courts. Part IV focuses on the approach of the Eastern District of Texas, while Part III discusses the approaches adopted by the majority of the district courts.
Part IV demonstrates that the Eastern District of Texas is still willing to permit joinder of independent defendants. Part V focuses on the context of mobile device technologies to show various approaches of permissive joinder among district courts. Part VI describes the rules of the “certain connection” approach.