Academic journal article Harvard Journal of Law & Technology

The America Invents Act: Slaying Trolls, Limiting Joinder

Academic journal article Harvard Journal of Law & Technology

The America Invents Act: Slaying Trolls, Limiting Joinder

Article excerpt

I. INTRODUCTION II. PATENT TROLLS III. THE AMERICA INVENTS ACT IV. JOINDER AND CONSOLIDATION IN PATENT INFRINGEMENT   SUITS.   A. Permissive Joinder      1. Rule 20.      2. Joinder in Patent Troll Litigation   B. Consolidation   C. Section 19 of the America Invents Act. V. ANALYSIS.   A. Effects of 35 U.S.C. [section] 299 on Patent Litigation.      1. Transfer      2. Number of Cases Brought by Patent Trolls and           Number of Defendants Sued      3. Multiple Assessments of Patent Validity      4. Defendant Autonomy   B. Judicial Interpretation of the Provision      1. "Same Accused Product or Process"      2. Nature of the Additional Element Now Required for           Proper Joinder VI. CONCLUSION 

I. INTRODUCTION

September 15, 2011 saw the largest number of patent infringement cases filed in recent history. On that single day, over fifty patent infringement cases were filed against more than 800 defendants. (1) This phenomenon was no coincidence; rather, litigants rushed to file patent infringement claims before certain provisions of the America Invents Act ("AIA") (2) went into effect. (3) Specifically, plaintiffs sought to avoid a little-discussed provision, buried deep within the AIA's fifty-nine pages, that would make it more difficult to join defendants in patent infringement suits.

This Note argues that one of the purposes of the AIA, including the joinder provision, is to address the problem of "patent trolls." (4) Patent trolls, or non-practicing entities ("NPEs") that hold patents for the sole purpose of licensing or enforcing them, (5) are commonly criticized as exacting a tax on inventors and reducing American innovation. (6) Unlike product-producing companies, patent trolls commonly employ a litigation strategy of initiating infringement suits against large numbers of unrelated, geographically diverse defendants (7) in venues friendly to patent plaintiffs, such as the Eastern District of Texas. (8) This strategy has at least two benefits. First, joining multiple defendants reduces litigation costs. Second, the presence of multiple defendants makes it more difficult to transfer the case to a more convenient forum. If the defendants are headquartered and have their primary places of business in different states, no one forum will be more convenient for all or most of the defendants. Thus, a court hearing a motion to transfer would be unlikely to grant the motion. This strategy was particularly effective in districts that interpreted the permissive joinder rule (9) as allowing defendants to be joined based on little more than the plaintiff's claim that the defendants had infringed the same patent. (10)

Section 19(d) of the AIA (amending 35 U.S.C. [section] 299) sought to end the practice of joining unrelated defendants in the same suit. (11) This provision makes clear that defendants cannot be joined solely on the basis of a claim that they infringed the same patent. (12) Instead, defendants can only be joined if (1) the parties are alleged to be jointly or severally liable or the defendants' alleged infringements arose out of the same transaction or occurrence, and (2) there are common questions of fact. (13)

The legislative history of the provision is confined to two brief paragraphs in the House Judiciary Committee's report, which make clear that the purpose of the provision was to abrogate case law that allowed joinder of defendants simply because the plaintiff claimed that they had infringed the same patent. (14) In the debates leading up to the passage of the AIA, there was no discussion of the reason the provision was added or its likely effects. To assist companies and practitioners operating in a post-AIA world, this Note describes the likely effects of the provision. In addition to limiting the number of defendants per suit, [section] 299 may have broad effects on patent litigation. First and most importantly, with fewer defendants in the same suit, defendants will probably be better able to transfer suits to a forum where they have greater contacts--such as where the company was organized, where it has its principal place of business, or where the transactions that gave rise to the litigation were principally centered. …

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