Congress attempted to address the imbalance with a provision in the America Invents Act tightening joinder rules. However, splitting up infringement cases has created new problems for parties and judges — problems that pretrial consolidation as an MDL can solve, said Edward Reines, a patent litigator at Weil, Gotshal & Manges and chair of the advisory council for the U.S. Court of Appeals for the Federal Circuit.
"You want consistency, you want judicial economy. You want coordination," he said."Pre-AIA, plaintiffs were suing 10 companies in one case and putting one or two Texas companies in there, so there would be enough connection to keep the case in Texas. Under the AIA, there's been more scattering," Reines said. "But let's say, each of the 10 cases gets sent to a different court and you have 10 different district judges handling claim construction. That's not satisfying either."
a case study
Plano, Texas-based Droplets holds two patents related to the delivery of information from a remote source over a server. It has three employees, according to court records.
In 2011, Droplets filed three lawsuits in the Eastern District of Texas accusing companies in the online, retail and financial sectors of infringing its patents with systems that present material like maps or stock quotes to users after retrieving it off a separate server.
Ultimately, suits against Nordstrom, Williams-Sonoma and several high-tech companies landed before judges in the Northern District of California. Meanwhile, a case naming E-Trade Financial Corp., The Charles Schwab Corp., Scottrade Inc. and other financial firms was transferred to the Southern District of New York.
In August, Droplets filed its motion with the MDL panel seeking transfer to the Northern District of Texas, close to its lead lawyer, Theodore Stevenson III in the Dallas office of McKool Smith.
Michael Levin of Wilson Sonsini Goodrich & Rosati, who represents E-Trade in the New York case, likened the tactic to "what golfers call a 'mulligan': an attempt for a 'do-over' on an issue they have already lost."
"Requests for centralization should not be used as a second opportunity at forum shopping after the district courts have already expended judicial resources, and defendants have borne the burden and expense of transferring cases to appropriate forums," Levin wrote in a brief opposing centralization.
In the event an MDL is created, defendants argued the case, In re Droplets, 2403, should be transferred to New York or California.
"Transfer of the Droplets actions back to Texas — after they were transferred out of Texas — would undermine Congress' policy and due process goals," stated a brief filed on behalf of the California defendants.
Droplets lawyer Stevenson called it "good case management" to consolidate patent cases for discovery and claim-construction, or Markman, hearings.
