Is the AIA's New Joinder Provision Driving Plaintiffs to the ITC?

Managing Intellectual Property

The America Invents Act ("AIA") is the most significant change to the United States Patent Statute in over fifty years. While the AIA did not include significant new rules directed specifically to practice in the International Trade Commission, many predicted that the AIA’s joinder provision would cause an increase in the number of multi-defendant complaints filed there. So far, however, there is no obvious evidence of such an increase. But why not?
The AIA adds 35 U.S.C. § 299, which prohibits multiple entities from being joined in a single patent infringement lawsuit unless they are jointly and severally liable for the alleged infringement or their alleged infringement arises from the same transaction. Unrelated defendants may no longer be sued in the same complaint merely because they are alleged to infringe the same patent.

Prior to the AIA, it was common for plaintiffs to file a single patent infringement lawsuit naming all alleged infringers as defendants. Plaintiffs, particularly non-practicing entities, preferred this approach because of the efficiencies it provided. These large cases, however, presented challenges to defendants who had to coordinate their strategies across large groups and who were often left with little time to argue their specific case at trial. Section 299 was intended to remedy these challenges.

Section 299, however, does not apply to actions before the ITC. As such, plaintiffs seeking the advantages of filing large multi-defendant cases and having a unified trial were thought to have an additional incentive to choose the ITC. To date, however, there is no obvious evidence that more multi-defendant cases have been filed in the ITC since Section 299 became effective on September 16, 2011.

It appears that plaintiffs have simply adopted a new filing strategy in district court. Instead of filing a single complaint naming multiple unrelated defendants, plaintiffs now file separate complaints against the same defendants, alleging the same cause of action against them. The plaintiffs’ hope is that the multitude of cases will be heard before one judge on a coordinated schedule, perhaps even with trials close together. Indeed, the U.S. Judicial Panel on Multidistrict Litigation, which coordinates related cases filed in different Federal District Courts, has recently ruled that Section 299 does not prevent the consolidation of cases asserting the same patent against different defendants from being consolidated before one district court for pre-trial purposes. In re: Bear Creek Techs., Inc., MDL No. 2344, DocID 103 (J.P.M.L. May 2, 2012).

If a procedure develops whereby suits against multiple defendants are routinely consolidated for pre-trial discovery purposes, plaintiffs may not be driven to choose the ITC for their multi-defendant patent enforcement actions. This is because the advantages of a consolidated trial against all defendants in the ITC might be outweighed by the limitations and jurisdictional requirements of ITC litigation. For the above reasons, the significant increase in ITC actions some were predicting would occur after the enactment of the AIA may never come.

By Richard Martinelli and Jordan L. Coyle

This article was originally published in Managing Intellectual Property in May 2012.