After a jury determined that certain defendants induced infringement of the plaintiff's patents by, among other things, selling unregulated and semi-regulated bus converters to third parties, such as Cisco, Cisco moved to intervene into the case. The district court explained that "[t]he jury found that Cisco, among others, was a direct infringer whose products incorporating Defendants' bus converters directly infringed SynQor's patents when they were sold in the United States. Judge Ward entered a Permanent Injunction and awarded supplemental damages for Defendants' continued sale of bus converters through January 24, 2011."

Cisco sought to intervene as a matter of right pursuant to Federal Rules of Civil Procedure 24(a). Cisco asserted that it purchased intermediate bus converters ("IBCs") from the Defendants that are the subject of the damages and, as a result,. Cisco sought to intervene for two reasons:

  • "Cisco has agreed with certain defendants to assume liability for damages that may be awarded in this case, giving Cisco a significant interest in ensuring the damages awarded to SynQor are accurately calculated and not inflated; and
  • Cisco has the most relevant and important evidence regarding the number of IBC shipments for which SynQor is entitled to a royalty."

In response, SynQor asserted that the '444 case, and its predecessor action (the '497 case), have been pending for five and a half years. As explained by the district court, "[a]ccording to SynQor, even though Cisco asserts its end products account for nearly all of the infringing sales at issue and it has a significant state in the outcome of this case in light of its indemnity agreements with several defendants, Cisco has never made any attempt to intervene in the '497 case. SynQor further asserts Cisco did not move to intervene for the one and a half years that the '444 case has been pending even though the parties were days away from trial before the case was continued in October of 2012. According to SynQor, Cisco has repeatedly emphasized and derived benefits from its status as a non party. SynQor contends Cisco's untimely intervention less than three months before the rescheduled trial date would be highly prejudicial to SynQor." SynQor also argued that intervention was not necessary because the Defendants adequately represent Cisco's interests.

The district court then explained that "[i]n order to intervene of right under Federal Rules of Civil Procedure 24(a)(2), an applicant must meet the four requirements of the rule: (1) the application for intervention must be timely; (2) the applicant must have an interest relating to the property or transaction which is the subject of the action; (3) the applicant must be so situated that the disposition of the action may, as a practical matter, impair or impede his ability to protect that interest; (4) the applicant's interest must be inadequately represented by the existing parties to the suit." Keith v. St. George Packing Company, Inc., 806 F.2d 525 (5th Cir. 1986)(quoting New Orleans Public Serv. Inc. v. United Gas Pipe Line Co., 732 F.2d 452, 463 (5th Cir)(en banc))."

As a justification for the timing of its motion, Cisco relied on the Federal Circuit's affirmance of the '497 judgment and "issues with Cisco's sales data that came to light after the continuance of the October 2012 trial date in the '444 case." The district court disagreed: "as urged by SynQor, nothing in the Federal Circuit's opinion alters Cisco's interest in this litigation. Cisco's interest remains the same as it was prior to the October 2012 trial setting, and Cisco never sought to intervene before that original trial setting."

With respect to the sales data, the district court also disagreed: "The issues with Cisco's sales data do not justify Cisco's untimely motion. According to SynQor, it is not seeking to change its damages theory; rather, it is only modifying "the damages calculation to properly account for the full extent of Cisco's infringing U.S. activity." Surreply at p. 2. Cisco asserts its records will be at the "heart of this trial" and will form the basis for any calculation of damages for sales of IBCs to Cisco after January 24, 2011. Mot. At p. 4. Cisco expects SynQor to challenge the accuracy of Cisco's records, and Cisco asserts it is in the best position to explain and defend its own records. Id. at p. 7."

Further, the district court found that intervention would delay the action and that it would cause SynQor prejudice. "Not only will intervention unduly delay this action, but the Court also notes Cisco has successfully resisted discovery in this case based on its status as a non-party. To allow Cisco to intervene at this late date would cause SynQor prejudice. Had Cisco timely intervened in the '497 case or attempted to intervene in this case when it was initially severed from the '497 case, such prejudice would have been largely avoided."

The district court also found that Cisco would not be prejudiced by a denial of its motion to intervene. "Cisco asserts it needs to intervene so that it may "present legal arguments related to damages owed on IBCs that it purchased" and "present the full and correct facts surrounding Cisco's shipments of these IBCs to and from the United States." Mot. at p. 2. However, as urged by SynQor, if Cisco believes its interests will not be adequately represented by Defendants, it would have sought to intervene prior to the scheduled October 2012 trial date."

Finally, the district court found that "Cisco has failed to convince the Court it needs to be a party at this time or why Defendants do not adequately represent Cisco's interest. As stated above, even as a non-party, Cisco has been afforded ample opportunity to present evidence and argument. The Court further notes Defendants have listed Cisco witnesses on their witness lists. The existing Defendants adequately represent Cisco's interests "as evidenced by Cisco's willingness to allow the case to proceed to trial in October 2012 without seeking to intervene." Resp. at p. 13."

Accordingly, the motion to intervene was denied.

Synqor, Inc. v. Artesyn Technologies, Inc., et al., Case No. 2:11-cv-444 (E.D. Tex. May 28, 2013)