On January 17, 2013, Magistrate Judge John D. Love issued an order in Network-1 Security Solutions, Inc. v. Alcatel-Lucent USA Inc., No 6:11-cv-492 (E.D. Tex.), granting the defendants’ motion to sever the case into several different actions. Judge Love found that infringement allegations stemming from the defendants’ compliance with the same technology standard was insufficient to warrant joinder. However, Judge Love found that in order to effectively manage the cases and preserve judicial resources, the cases would be consolidated for all pre-trial purposes except venue.
Network-1 Security Solutions, a non-practicing entity, filed an infringement complaint on September 15, 2011 against 26 defendants, alleging infringement of U.S. Patent No. 6,218,930. Network-1’s allegations of infringement of the ‘930 patent are based on the defendants’ making, selling, and/or using products that comply with the IEEE 802.3af and 802.3at “Power over Ethernet” standards. The date Network-1 filed its complaint was likely no coincidence — the America Invents Act, which toughened the joinder requirements for patent infringement cases, took effect the following day. (The AIA added 35 U.S.C. § 299, which provides, among other things, that parties cannot be joined as defendants based solely on the allegation that they each infringe the same patent.)
The defendants moved to dismiss or sever the cases, alleging that the Federal Circuit’s reasoning in In re EMC Corp., 677 F.3d 1351 (Fed. Cir. 2012) showed that the defendants were not properly joined. In that case, the Federal Circuit addressed joinder of defendants pre-AIA, finding that the fact that the accused products or processes of the defendants are similar is not enough to warrant joinder, but that several other factors should be evaluated — such as the time frame of infringement, relationship between defendants, common components used in accused devices, etc.
Applying the reasoning of In re EMC, Judge Love agreed with defendants and severed the cases. Judge Love explained that not a single product accused of infringement was common among any two defendants — the only similarly Network-1 provided was compliance with the IEEE Power over Ethernet standards. While Network-1 asserted that some defendants used overlapping component chips, Judge Love found the diversity of these chips (a dozen models made by four different manufacturers) did not demonstrate enough similarity to warrant joinder.
But while the Network-1 cases were severed, in order to preserve judicial resources and effectively manage the cases, Judge Love also ordered that these cases be consolidated for all pre-trial purposes except venue. He did leave the door open to later consolidation for trial if necessary, noting in a footnote that as discovery proceeds, common facts may arise justifying a joint trial.