The Federal Circuit recently issued an important decision that should pave the way for transferring cases to retailers’ home districts.  In In re EMC Corp., Docket No. 100, several co-defendants whose motions to sever and transfer their cases in a pre-AIA multi-defendant suit appeals to the Federal Circuit on a writ of mandamus.  Looking only at pre-AIA law, the Court held as a matter of first impression that the Federal Circuit could hear appeals of motions to sever and transfer – it was already established that the Federal Circuit could consider motions to transfer on mandamus.  So, as an initial matter there is an avenue for retailers to challenge decisions denying sever and transfer.

The Court then considered the proper pre-AIA Rule 20 joinder standard for patent cases, holding:

  • The “mere fact” that the same claims are asserted against multiple defendants is not enough for joinder even though there could be common claim construction and invalidity arguments.
  • Claims against independent parties are “new claims against new parties” that do not warrant joinder.
  • Rule 20 joinder requires a “logical relationship” between the cases.  A logical relationship requires “substantial evidentiary overlaps.”  Said more directly, the various infringement claims “must share an aggregate of operative facts.” (emphasis in original).
  • The district courts’ “not dramatically different” standard was inconsistent with the logical relationship standard.
  • “[J]oinder is not appropriate where different products or processes are involved.  Accused products must be “the same in respects relevant to the patent.”
  • There must be an “actual link” between the facts underlying separate infringement claims, not just the sameness of accused products.

The Court did, however, limit the impact of its decision by noting that while Rule 20 joinder is limited, district courts have discretion to consolidate cases for discovery and possibly trial, at least where venue is proper.  And the Court acknowledged that cases could also be consolidated across districts by the multi-district litigation panel.  Of course, the AIA significantly limited a district court’s ability to consolidate for trial.

It is also important to remember that this was a pre-AIA case.  Post-AIA, Rule 20 joinder should be further constrained.  The AIA makes clear that unrelated defendants must be sued separately and that, while some pre-trial coordination may be allowed, trials must be separate.