Federal Circuit Clarifies Standard For Joinder Of Multiple Defendants In Patent Infringement Cases

Author:Mr Darren Donnelly and Jeffrey V. Lasker
Profession:Fenwick & West LLP
 
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In re EMC Corporation,Misc. Dkt. No. 100 (Fed. Cir. May 4, 2012)

On May 4, 2012, a Federal Circuit panel decided the circumstances when a plaintiff may join multiple defendants with unrelated products in a patent infringement suit. The court concluded that independent defendants satisfy the same transaction-or-occurrence test required for joinder when there is a logical relationship between the separate causes of action. This occurs "if there is substantial evidentiary overlap in the facts giving rise to the cause of action." That is, "the defendants' allegedly infringing acts, which give rise to the individual claims of infringement, must share an aggregate of operative facts." However, "[t]he sameness of the accused products is not enough to establish that claims of infringement arise from the 'same transaction.' Unless there is an actual link between the facts underlying each claim of infringement, independently developed products using differently sourced parts are not part of the same transaction, even if they are otherwise coincidentally identical."

The case was decided under the rules in place before Congress enacted the new joinder provision in the Leahy-Smith America Invents Act ("AIA") and applies to cases filed before its effective date.

Background of the Case

Oasis Research brought a single suit against eighteen companies in the Eastern District of Texas. The complaint alleged infringement of the method claims of four patents relating to off-site computer data storage and stated that all of the defendants provided online backup and storage for home and business users. Eight of the eighteen defendants moved to sever and transfer the claims against them to more appropriate venues. They argued that because there was no concert of action, the claims against them did not arise out of the same transaction or occurrence, as required by Federal Rule of Civil Procedure 20, which governs permissive joinder of parties.

Oasis Research opposed, arguing that because the accused infringement was limited only to online backup/storage, each defendant offered a similar online backup/storage service, and the steps taken to provide those services were all alleged to infringe, the claims arose out of the same transaction or occurrence. Applying the standard used by the Eastern District of Texas, the district court concluded the claims arose out of the same transaction, occurrence, or series of transactions or occurrences because the defendants'...

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