Wireless Recognition Technologies LLC v. A9.com, Inc. et al

Filing 114

SUR-REPLY to Reply to Response to Motion re 94 MOTION to Consolidate Cases filed by A9.com, Inc., Amazon.com, Inc., Google, Inc.,, Nokia, Inc., Ricoh Innovations, Inc.. (Attachments: # 1 Exhibit D, # 2 Exhibit E, # 3 Exhibit F, # 4 Exhibit G, # 5 Exhibit H, # 6 Exhibit I)(Smith, Michael)

EXHIBIT G

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FN1

Only the Westlaw citation is currently available.
This decision was reviewed by West editorial staff
and not assigned editorial enhancements.
United States District Court,
N.D. California.
WIAV NETWORKS, LLC, Plaintiff,
v.
3COM CORPORATION, et al., Defendants.
No. C 10-03448 WHA.
Oct. 1, 2010.
David W. Hansen, Edward V. Filardi, Michael David
Saunders, Skadden Arps Slate Meagher & Flom,
LLP, Palo Alto, CA, David Jack Levy, Clay Erik
Hawes, Morgan, Lewis & Bockius LLP, Houston,
TX, Daniel A. Devito, Skadden Arps Slate Meagher
& Flom LLP, New York, NY, Raoul Dion Kennedy.
Skadden Arps Slate Meagher & Flom LLP, San
Francisco, CA, for Defendants.
ORDER DISMISSING ALL REMAINING DEFENDANTS EXCEPT HEWLETT-PACKARD
COMPANY FOR MISJOINDER UNDER FRCP
21
WILLIAM ALSUP, District Judge.
*1 Plaintiff WiAV Networks, LLC was ordered
to show cause why all but the first named defendant
in this sprawling patent-infringement action against
68 different companies should not be dismissed for
misjoinder under FRCP 21 (Dkt. No. 486). As noted
in that order, plaintiff filed this action in the United
States District Court for the Eastern District of Texas.
The complaint named well over five dozen corporate
defendants across the United States, Canada, Japan,
China, Taiwan, Belgium, Finland, and Sweden, accusing each of willfully and deliberately infringing
two United States Patents (Dkt. No. 1). The action
was eventually transferred here and was assigned to
the undersigned judge on August 30.
Of the 68 corporate defendants originally named
in this action, plaintiff has already dismissed 28 of
them (either voluntarily or pursuant to stipulation).

Of the 40 that remain, the vast majority-as the
order to show cause observed-are wholly unrelated
companies with wholly unrelated products. Significantly, neither the original defendants nor the remaining defendants were alleged to have acted in concert
to infringe any of plaintiff's asserted patents. Indeed,
many of the remaining defendants are direct competitors of each other. They share no common transaction
or occurrance.
FN1. Among these 28 dismissed defendants
is the first-named defendant, 3Com Corporation, which was dismissed pursuant to stipulation on September 28 due to its merger
with defendant Hewlett-Packard Company.
Plaintiff has requested that Hewlett-Packard
Company be retained as a defendant if misjoinder is declared.
Perhaps recognizing these weaknesses in its position, in its response to the August 31 order to show
cause, plaintiff proposed to voluntarily dismiss without prejudice all but twelve remaining defendants.
These twelve defendants, organized by plaintiff into
seven “groups” of related entities, stand accused of
infringement based on their portable computing
products (Dkt. No. 541 at 2). These defendants,
deemed the “Laptop Defendants” by plaintiff, are (1)
Acer Inc., Acer America Corporation, and Gateway,
Inc.; (2) Asus Computer International and Asustek
Computer, Inc.; (3) Dell Inc.; (4) Fujitsu America,
Inc. and Fujitsu Ltd.; (5) General Dynamics Itronix
Corporation; (6) Hewlett-Packard Company; and (7)
Panasonic Corporation and Panasonic Corporation of
North America. Plaintiff contends that keeping these
“Laptop Defendants” in this action is proper because
the claims against them are “logically connected”
such that joinder would preserve supposed efficiencies and benefits.
As set forth in FRCP 20(a)(2), multiple defendants may be joined together in one action if “(A)
any right to relief is asserted against them jointly,
severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series
of transactions or occurrences; and (B) any question
of law or fact common to all defendants will arise in
the action.” In situations of misjoinder and nonjoin-

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der of parties, FRCP 21 provides that “[o]n motion or
on its own, the court may at any time, on just terms,
add or drop a party.”
“The Ninth Circuit has interpreted the phrase
‘same transaction, occurrence, or series of transactions or occurrences' to require a degree of factual
commonality underlying the claims.” Bravado Int'l
Group Merchandising Servs. v. Cha, 2010 WL
2650432, at *4 (C.D.Cal. June 30, 2010) (citing
Coughlin v. Rogers, 130 F.3d 1348, 1350 (9th
Cir.1997)). Typically, this means that a party “must
assert rights ... that arise from related activities-a
transaction or an occurrence or a series thereof.” Ibid.
(citation omitted). As stated, plaintiff has not alleged
that the named defendants in this action have engaged in related activities or have otherwise acted in
concert.
*2 As such, even if this litigation were pared
down to just the “Laptop Defendants,” proof of infringement would necessarily require proof of facts
specific to each individual defendant and to each accused product. The mere fact that twelve defendants
all manufacture, sell, or distribute their own laptop
computers does nothing to obviate the bone-crushing
burden of individualized methods of proof unique to
each product. Again, there is no conspiracy claim.
There is no claim that any defendant induced another
to infringe. Each defendant has simply been thrown
into a mass pit with others to suit plaintiff's convenience.
In this connection, the accused defendants-who
will surely have competing interests and strategiesare also entitled to present individualized assaults on
questions of non-infringement, invalidity, and claim
construction. Cf. Nasalok Coating Corp. v. Nylok
Corp., 522 F.3d 1320, 1326 (Fed.Cir.2008) ( “[W]e
have explicitly held that a determination of patent
infringement in an infringement suit, or even an explicit determination of patent validity, does not preclude the assertion of an invalidity defense in a second action involving different products.”); Texas
Instruments, Inc. v. Linear Techs. Corp., 182
F.Supp.2d 580, 586 (E.D.Tex.2002) (recognizing that
“defendants in a later proceeding involving previously construed patents should have the opportunity
to brief and argue the issue of claim construction,
notwithstanding any policy in favor of judicial uniformity”).

Plaintiff's best argument that the “Laptop Defendants” are “logically connected” is that each of these
defendants sells products that implement the IEEE
802.11 wireless protocol. The United States Court of
Appeals for the Federal Circuit recently weighed in
on theories of “infringement by compliance with an
industry standard” in Fujitsu Ltd. v. Netgear, 620
F.3d 1321, ----, 2010 WL 3619797, at *4 (Fed.Cir.
Sept.20, 2010). In Fujitsu, the Federal Circuit recognized that mere compliance with an industry protocol
does not necessarily establish that all compliant devices implement the protocol in the same way. Different accused devices may achieve compliance with
an industry standard or protocol through varying designs, with different tolerances, and with competing
features. Additionally, the Fujitsu decision observed
that an asserted patent claim-properly construedmight not cover all implementations of an industry
standard. In such situations, the Federal Circuit emphasized that infringement would have to be proven
on a product-by-product basis.
In the instant case, defendants are unrelated and
compete with each other through their accused products. Even if each of the accused devices is compliant
with the IEEE 802.11 wireless protocol, it is far from
a foregone conclusion that the asserted claims in
WiAV's patents will cover all implementations of the
protocol. WiAV makes no such assertion. Indeed, at
the case management conference, counsel for WiAV
acknowledged that even among the “Laptop Defendants,” there would be “slight differences in hardware and software components” involved. Additionally, the patents themselves make no mention of the
802.11 wireless protocol, the complaint is silent on
the 802.11 wireless protocol, and no showing has
been made that practicing the asserted patents is essential to complying with the protocol in all instances. As emphasized by the Federal Circuit in Fujitsu, only in situations where a properly construed
patent covers all required elements of an industry
standard will it be enough to prove infringement by
showing compliance with the standard. See Fujitsu,
2010 WL 3619797, at *4. This has not been established here. Plaintiff must prove that each accused
product infringes, and each such endeavor will be
worthy of its own trial.
*3 All in all, plaintiff cannot escape the fact that
it is suing unrelated and competing defendants for

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their own independent acts of patent infringement. In
such situations, numerous courts have found that
“joinder is often improper where [multiple] competing businesses have allegedly infringed the same patent by selling different products.” Spread Spectrum
Screening, LLC v. Eastman Kodak Co., 2010 WL
3516106, at *2 (N.D.Ill. Sept.1, 2010); see also
Philips Elecs. N. Am. Corp. v. Contec Corp., 220
F.R.D. 415, 417 (D.Del.2004) ( “Allegations of infringement against two unrelated parties based on
different acts do not arise from the same transaction.”); Androphy v. Smith & Nephew, Inc., 31
F.Supp.2d 620, 623 (N.D.Ill.1998) (holding that the
joinder of three manufacturers in a patent infringement suit was improper because the claims did not
arise from a common transaction or occurrence when
the manufacturers were separate companies that independently designed, manufactured, and sold different products); New Jersey Mach. Inc. v. Alford Indus., Inc., 1991 WL 340196, at *2 (D.N.J. Oct.7,
1991) (holding in a patent infringement suit that
“claims of infringement against unrelated defendants,
involving different machines, should be tried separately against each defendant”).
None of the decisions cited by plaintiff compels
a different conclusion. Indeed, each decision cited by
plaintiff avoids the question of how the infringing
conduct of different defendants with different products, acting separately, can involve or arise out of
“the same transaction, occurrence, or series of transactions or occurrences[,]” which FRCP 20(a)(2)
states is a precondition for the permissive joinder of
defendants.
The answer-as explained herein-is that they do
not. The infringement issues will vary from product
to product as they will invariably contain different
components, from different manufacturers, with different specifications, that work in different ways.FN2
Additionally, the damages issues, wilfulness issues,
time frames and accused conduct, and discovery issues will obviously vary from company to company.
Finally, while a defense of inequitable conduct will
no doubt arise as a common defense for most if not
all defendants, FRCP 20(a)(2)(A) does not encompass defenses asserted against a plaintiff. Rather, only
a “right to relief” asserted by the plaintiff can satisfy
the requirements for joining defendants under FRCP
20(a)(2)(A).

FN2. There is no allegation in the complaint
that all “Laptop Defendants” and accused
products share identical wireless chipsets or
components from a central manufacturer. At
best, plaintiffs argue in their brief that “the
accused products share a significant overlap
in their wireless chipsets, which are predominantly supplied by a limited number of
third parties, such as Atheros Communications, Inc., Broadcom Corp., Intel Corp., and
Marvell Semiconductor, Inc.” (Br.5). These
differences among chipsets cut against any
assertion by plaintiff that the products are
“identical” for purposes of proving infringement.
Of course, it is possible that the same patent
claim (of the 34 in the patents in suit) may eventually
be asserted against two or more defendants. In that
instance, some claim construction issues will overlap.
That said, while it would be nice to have an identical
set of elaborations on the asserted claims for each
accused product, even that is not practical, for the
differences in the products themselves will provoke
differences in which words and slants in the claim
language really matter. These differences will lead a
defendant in one case to focus entirely upon the
meaning of certain words or phrases in a claim and a
defendant in another case to focus entirely on different words or phrases even though they are in the
same claim. In other words, the claim-construction
work will not be the same for all defendants, even
those facing trial on the same patent claim. The
claim-construction work must be adapted to the actual issues being litigated over the varying accused
devices.FN3 In short, whatever common issues may
exist from device to device will be overwhelmed by
the individual issues of claim construction, damages,
wilfulness, and discovery supervision.
FN3. Compounding the problem is the fact
that the two asserted patents contain 34
claims. While counsel for plaintiff represented at the case management conference
that only “around ten” claims would actually
be litigated, various combinations of these
claims could nevertheless be asserted
against different defendants and their accused products, thereby guaranteeing a
monumental mess.

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*4 Given the disparity in defendants, accused
products, and other disparate issues discussed herein
like damages, wilfulness, and discovery supervision,
it is worth adding that the allegations against each
remaining defendant would not be related under our
civil local rules even if brought here as separate actions. See Civil L.R. 3-12(a)(2). If, however, the actions are re-filed in this district, the undersigned
judge would be willing to coordinate certain claim
construction issues (and those issues only) if the parties so stipulate, the assigned judge(s) consent, and
the parties make a showing that the same phrases in
the same claims require interpretation.
For the foregoing reasons, pursuant to a finding
of misjoinder under FRCP 21, all remaining defendants except Hewlett-Packard Company are DISMISSED. The request by counsel to force any refilings to be made in this district is DENIED. There
is insufficient justification to do so even if authority
existed to impose such a requirement. This, however,
is without prejudice in the event of re-filings elsewhere to a motion to transfer the actions here.
IT IS SO ORDERED.
N.D.Cal.,2010.
WiAV Networks, LLC v. 3Com Corp.
Slip Copy, 2010 WL 3895047 (N.D.Cal.)
END OF DOCUMENT

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