The Judicial Panel on Multidistrict Litigation (JPML) has determined that reforms adopted under the America Invents Act (AIA) do not limit its authority to centralize litigation filed in federal courts for coordinated or consolidated pretrial proceedings. In re: Bear Creek Techs., Inc., (‘722) Patent Litig., MDL No. 2344 (J.P.M.L., decided May 2, 2012). The issue arose from a patent holder’s request that JPML centralize 14 infringement actions involving its telecommunications patent. One of the defendants argued that part of the AIA, 35 U.S.C. § 299(b), limits JPML’s authority to do so.
That section provides, “For purposes of this subsection, accused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit.” Rejecting the defendant’s argument, JPML notes that its multidistrict litigation (MDL) transfer authority and the AIA’s joinder provision “operate under decidedly different standards.”
MDL transfer does not join defendants, and each separate action must be remanded to the originating court at the close of pretrial proceedings. In contrast, the AIA does not address pretrial proceedings, focusing instead on consolidation for trial.
JPML also observes that the AIA was adopted after the cases at issue were filed, and if Congress had intended to limit its transfer authority “it would have done so in a more direct fashion. . . . In the recent past, when Congress has limited the Panel’s authority to transfer a certain category of actions, it has done so explicitly. For instance, pursuant to a provision of the Class Action Fairness Act, Section 1407 transfer of an action removed pursuant to the statute’s ‘mass action’ provisions is prohibited unless a majority of plaintiffs so request.” JPML further rejected the claim that centralization “will lead to a flood of MDL patent filings by non-practicing entities seeking to execute an ‘end run’ around the AIA’s new joinder requirements.”
According to JPML, “We do not accept this assertion as being a sufficient reason to deny centralization in this litigation. Centralization of any litigation— including patent cases—is not automatic, and will necessarily depend on the facts, parties, procedural history and other circumstances in a given litigation.” Because the cases presented common questions of fact, and centralization “will serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation,” JPML ordered that the cases be transferred to the District of Delaware.