Addressing for the first time the issue of whether restricting the number of claims that may be asserted violates a plaintiff’s due process rights, the U.S. Court of Appeals for the Federal Circuit upheld both a court order that limited a plaintiff to a specified number of asserted claims and refused to sever and stay any unselected claims. Ronald A. Katz Tech. v. American Airlines et al., Case Nos. 09-1450, -1451, -1452, -1469; 10-1017 (Fed. Cir., Feb. 18, 2011) (Bryson, J.).
Over the course of two years, the plaintiff filed 25 patent infringement actions in the U.S. District Court for the Eastern District of Texas and the U.S. District Court for the District of Delaware, asserting 1,925 claims from 31 patents against 165 defendants, consisting of 50 defendant groups. The Judicial Panel on Multidistrict Litigation (MDL) transferred all of the cases to the U.S. District Court for the Central District of California (the MDL court) for coordinated pretrial proceedings. For efficiency and because the court found that many of the asserted claims appeared to be duplicative, the MDL court ordered the plaintiff to limit the number of asserted claims to 64. However, the MDL court allowed the plaintiff to surpass that number if the additional claims “raise[d] issues of infringement/validity that [were] not duplicative” of previously selected claims. The MDL court placed the burden on the plaintiff to show non-duplicity.
The plaintiff did not comply with the order, but selected nearly 100 claims and offered no proof that the additional claims were non-duplicative. The plaintiff also moved to sever and stay the non-selected claims and only proceed on the selected claims. The plaintiff argued the limitation on the number of asserted claims was too restrictive for the number of accused services and further argued a ruling could have a preclusive effect on the non-selected claims and would divested the plaintiff of its rights in those claims without due process. The MDL court denied the motion. The defendants subsequently filed summary judgment motions on dispositive issues. After the MDL court granted those motions, the plaintiff appealed.
On appeal, the Federal Circuit rejected the plaintiff’s argument that the MDL court’s decision violated its due process rights: “[t]o make out a due process claim, [the plaintiff] must demonstrate that the district court’s claim selection procedure risked erroneously depriving it of its rights and that the risk outweighed the added costs associated with a substitute procedure.” Because the plaintiff did not “make, or even attempt to make, [a] showing” that the non-selected or additionally-selected claims were non-duplicative, the Federal Circuit agreed with the MDL court that the plaintiff could not “legitimately complain that it did not have a meaningful opportunity to be heard on those claims.” Further, the Federal Circuit found that it was “both efficient and fair” to place the burden on the plaintiff to limit the claims because the plaintiff is “in the best position to narrow the dispute.”
In approving the MDL court’s procedure, the Federal Circuit cautioned that its ruling does not mean that a district court’s claim selection decisions are not reviewable and suggested that the plaintiff could have demonstrated that the unselected claims presented unique issues as to liability or damages, in which case the “decision would be subject to review and reversal.” The Federal Circuit also found that the MDL court did not violate the presumption of claim validity or claim differentiation, finding that “although the court required [the plaintiff] to show that additional claims presented unique questions for the case, the court did not place a burden on [the plaintiff] to demonstrate that its claims covered distinct subject matter.”
On an unrelated issue, the Federal Circuit, distinguishing Aristocrat, reversed one of the MDL court’s rulings that invalidated several general-purpose-computer-means-plus-function claims because the specification failed to disclose the requisite algorithms to perform the claimed functions. The Federal Circuit ruled that an algorithm is not required for claimed general purpose computer functions that “can be achieved by any general purpose computer without special programming,” and found, absent a contrary construction, “the functions ‘processing,’ ‘receiving,’ and ‘storing’ are coextensive with […] a general purpose computer.”