New rules on joinder
Lead to flurry of filings
On September 15, 2011, at least 54 patent infringement cases were filed, naming over 800 corporate entities as defendants. This was a record high for patent infringement cases filed in a single day.
In the entire week following September 16, there were only 75 cases filed against 95 defendants.
So what happened?
On September 16, 2011, President Obama signed the Leahy-Smith America Invents Act (AIA). The joinder and consolidation provisions of the Act became effective on that day.
The new provisions are expected to curb patent “trolling” cases in which non-practicing entities (NPEs, aka “trolls”) file lawsuits against multiple defendants. Several NPEs were among the entities filing suit just before September 16.
The new joinder rules state:
§ 299. Joinder of parties
(a) JOINDER OF ACCUSED INFRINGERS.—With 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, or counterclaim defendants only if—
(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.
(b) ALLEGATIONS INSUFFICIENT FOR JOINDER.—For 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.
The AIA no longer permits joinder where only common questions of law will arise.
Results of this change are expected to include more cases filed in the short term – each against a smaller number of defendants. Cases will likely now be filed in more jurisdictions, rather than disproportionately in the Eastern District of Texas, California, Delaware, and Illinois as they are now.