Earlier this month, the Federal Circuit Court of Appeals came down with a ruling that would greatly affect the way several patent cases come out of the District Court for the Eastern District of Texas.
The court held that joinder will not be allowed in multi-defendant patent infringement cases, where the cases allege that the defendants violated the same patent.
Why does this affect the District Court in Texas, though? Because a large number of patent troll cases come out of Texas. In fact, a large number of patent cases, period, come out of Texas, due to the fact that many find the court amenable to the adjudication of patent cases (i.e., it's a favorable forum).
The Federal Circuit Court of Appeals granted a writ of mandamus to EMC and joined by petitioners Iron Mountain, Carbonite, Go Daddy, Pro Softnet and Oracle.
The case arose when Oasis Research, LLC sued 18 defendants for patent infringement. The patent related to methods for data storage.
The defendants wanted the cases severed, as they said that the claims didn't arise from the same transaction. But the district court denied this, applying the relaxed standard for joinder.
The appeals court, in its decision, ordered the district court to apply the correct test for joinder.
The panel of three consisted of Chief Judge Randall Rader, Judge Timothy Dyk and Judge Kimberly Moore. The trio found that the joiner standard used by judges in the Eastern District of Texas was too lenient.
As mentioned earlier in our post, that standard essentially stated that the test for joinder was that the same patent be at issue against all of the defendants.
In September, the America Invents Act came out, defining the issue of joinder and the appropriate standard. Of course, many filers rushed to reach the courts before this law became active.
But in light of patent reform, the old standard was not ideal. While the appellate court did not apply the new laws retroactively, they held there must be "substantial evidentiary overlap in the facts giving rise to the cause of action against each defendant" in order to join defendants.
- In Re EMC Corp (Federal Circuit Court of Appeals)
- Federal Circuit Cases (FindLaw Cases)
- Federal District Court for the Eastern District of Texas (US Courts)