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

Filing 115

REPLY to Response to Motion re 104 Cross MOTION to Sever Pursuant to Rules 20 and 21 of the Federal Rules of Civil Procedure filed by A9.com, Inc., Amazon.com, Inc., Google, Inc.,, Nokia, Inc., Ricoh Innovations, Inc.. (Attachments: # 1 Exhibit C, # 2 Exhibit J)(Smith, Michael)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
WIRELESS RECOGNITION
TECHNOLOGIES LLC,
Plaintiff,
vs.
A9.COM, INC., AMAZON.COM, INC.,
GOOGLE INC., NOKIA, INC., and
RICOH INNOVATIONS, INC.,
Defendants.

WIRELESS RECOGNITION
TECHNOLOGIES LLC,
Plaintiff,
vs.
NOKIA CORPORATION and RICOH
COMPANY, LTD.,
Defendants.

WIRELESS RECOGNITION
TECHNOLOGIES LLC,
Plaintiff,
vs.
A9.COM, INC., AMAZON.COM, INC.,
GOOGLE INC., NOKIA, INC., and
RICOH INNOVATIONS, INC.,
Defendants.

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Civil No. 2:10-CV-00364-DF

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Civil No. 2:10-CV-00365-DF

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Civil No. 2:10-CV-00577-DF

WIRELESS RECOGNITION
TECHNOLOGIES LLC,
Plaintiff,
vs.
NOKIA CORPORATION and RICOH
COMPANY, LTD.,
Defendants.

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Civil No. 2:10-CV-00578-DF

DEFENDANTS’ REPLY BRIEF IN SUPPORT OF THEIR
CROSS-MOTION TO SEVER PURSUANT TO RULES 20 AND 21
OF THE FEDERAL RULES OF CIVIL PROCEDURE

TABLE OF CONTENTS
Page
I.

INTRODUCTION ...................................................................................................................1

II.

ARGUMENT ...........................................................................................................................1
A.

Congress Recently Clarified The Correct Application Of Rule 20 In The
Circumstances Presented By Defendants’ Motion ........................................................1

B.

The Authority Cited By WRT Was Expressly Abrogated By Congress And
Addressed Circumstances Different Than Those Here ..................................................3

C.

WRT’s Argument That This Court Should Ignore Congress’s Clear Mandate
Is Nonsensical And Misapprehends The Legislative History Underlying Rule
20....................................................................................................................................5

III. CONCLUSION ........................................................................................................................5

i

I.

INTRODUCTION
In its Opposition to Defendants’ Cross-Motion to Sever Pursuant to Rules 20 and 21 of

the Federal Rules of Civil Procedure (“Opposition”), plaintiff WRT1 argues that all four cases
should be joined for trial because Defendants’ alleged acts of infringement “arise out of the same
transaction or occurrence.”

In making this argument, WRT ignores recent unequivocal

pronouncements from Congress and urges the Court to follow reasoning and case law that
Congress specifically abrogated in enacting the America Invents Act. Rather than contravene a
recent Congressional mandate, the Court should sever the cases for trial along the lines requested
by Defendants.
II.

ARGUMENT
A.

Congress Recently Clarified The Correct Application Of Rule 20 In The
Circumstances Presented By Defendants’ Motion

Rule 20 permits two or more defendants to be joined in a single action only if the
plaintiff’s alleged rights to relief “arise out of the same transaction [or] occurrence” and a
question of fact common to all defendants will arise in the action. Fed. R. Civ. P. 20(a)(2).
WRT’s argument in favor of trial consolidation is premised on the belief that this standard
permits patent infringement actions against unrelated defendants with different accused products
to be joined in a single trial unless the defendants can show that the accused products are
“dramatically different” from one another. Congress recently left no doubt that WRT’s belief is
mistaken.
In the recently-passed America Invents Act, Congress clarified and made express how
Rule 20 applies to attempts to join multiple unrelated defendants with different accused products
in the same patent infringement case. See H.R. 1249, 112th Cong. (2011). Specifically, Section
19(d) of the Act added a new Section 299 to Title 35 of the U.S. Code governing joinder of
parties in patent infringement litigation. New Section 299 clarifies that the “same transaction or
1

Unless otherwise indicated, all terms in this Reply shall have the meanings defined in
Defendants’ opening brief in support of their cross-motion. (Dkt. No. 103.)

1

occurrence” requirement of Rule 20(a)(2) must “relat[e] to the making, using, importing into the
United States, offering for sale, or selling of the same accused product or process.” 35 U.S.C. §
299(a)(1) (emphasis added). In the four cases that WRT seeks to consolidate, WRT is accusing
four distinct sets of accused products2 from four different groups of defendants.3 Thus, the first
prong of the Rule 20(a) test for proper joinder is not satisfied under the circumstances present in
this motion. Congress has now made clear that, under such circumstances, the cases should be
severed exactly as Defendants have suggested in their cross-motion. (See Dkt. No. 103 at 1112.)4
Section 299 also changed the second prong of Rule 20(a)(2) to require that there be
“questions of fact common to all defendants.” Id. § 299(a)(2) (emphasis added). Common
questions of law, such as the scope or proper construction of patent claims, will not suffice to
satisfy the second prong of Rule 20(a). Thus, WRT’s reliance upon common questions of claim
construction or patent scope to justify its requested consolidation is erroneous.
Finally, with respect to the structure of trials – the issue at the heart of Defendants’
motion – Section 299 states that “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.”

Id. § 299(b)

(emphasis added). Thus, Congress has clearly and unequivocally indicated that Rule 20 does not
permit the consolidation for trial that WRT requests. Rather, the trials must be organized as
Defendants have proposed.

2

The four sets of accused products are: (1) A9’s Snaptell product and Amazon’s Remembers
and Price Check features; (2) Google’s Goggles and Shopper mobile applications; (3) Nokia’s
Point and Find mobile applications, and (4) applications that Ricoh allegedly makes for the
iPhone, including French Rev. and DriveTube.

3

The four different groups of Defendants are: (1) A9 and Amazon; (2) Google; (3) Nokia and
Nokia Corporation; and (4) Ricoh and Ricoh Company Ltd.
4

Despite Congress’s clear directive and in the interests of judicial economy, Defendants have
nevertheless offered to consolidate the four cases for some pretrial proceedings. (See, e.g., Dkt.
No. 103 at 2-3.)

2

B.

The Authority Cited By WRT Was Expressly Abrogated By Congress And
Addressed Circumstances Different Than Those Here

WRT argues that Defendants’ alleged acts of infringement “arise out of the same
transaction or occurrence” based on a legal standard and case law that Congress recently
declared erroneous and abolished. Specifically, WRT argues that patent infringement cases
against unrelated accused products may be joined in a single case if they are not “dramatically
different” from one another. The argument is based on four cases: (1) MyMail, Ltd. v. America
Online, Inc., 223 F.R.D. 455 (E.D. Tex. 2004); (2) Adrain v. Genetec Inc., 2009 WL 3063414
(E.D. Tex. September 22, 2009); (3) Eolas Technologies, Inc. v. Adobe Systems, Inc., 2010 WL
3835762 (E.D. Tex. September 28, 2010); and (4) Oasis Research v. ADrive, et al., Report and
Recommendation of United States Magistrate Judge, No. 4:10-cv-435 (E. D. Tex. May 23,
2011). (Dkt. No. 109 at 1-3.) Congress has unequivocally stated that these cases and the
“dramatically different” standard that they espouse are erroneous applications of Rule 20.
The House Report on the America Invents Act explains that the purpose of Section 299,
which has now become law, was to “address[] problems occasioned by the joinder of defendants
. . . who have tenuous connections to the underlying disputes in patent infringement suits.” H.R.
Rep. No. 112-98, pt. 1, at 54 (June 1, 2011) (attached as Ex. C). The report explains that
“Section 299 legislatively abrogates the construction of Rule 20(a) adopted in MyMail, Ltd. v.
America Online, Inc., 223 F.R.D. 455 (E.D. Tex. 2004); . . . Adrain v. Genetec Inc., 2009 WL
3063414 (E.D. Tex. September 22, 2009); . . . and Eolas Technologies, Inc. v. Adobe Systems,
Inc., 2010 WL 3835762 (E.D. Tex. September 28, 2010).” (Ex. C at 55 n.61.)5 The section
“effectively conform[s] these courts’ jurisprudence to that followed by a majority of
jurisdictions.” (Id.) Thus, Congress expressly indicated by name that three of the four cases
relied upon by WRT misconstrued and misapplied Rule 20(a). Although Congress did not
mention by name the fourth case cited by WRT, the magistrate’s recommendation in Oasis

5

The Merriam-Webster online dictionary defines the term “abrogate” to mean “to abolish by
authoritative action.” http://www.merriam-webster.com/dictionary/abrogate

3

Research, that case is similarly flawed because it relies entirely on the three cases that Congress
disavowed. (See, e.g., Dkt. No. 109, Ex. A at 4.)
Even if Congress had not pronounced them erroneous, the cases relied upon by WRT
would be inapposite because the circumstances in each of those cases were materially different
than the circumstances in this motion. For example, in MyMail, the Court was concerned with
the prospect of inconsistent claim constructions emanating from two different courts and favored
resolving such issues in the same forum. 233 F.R.D. at 458. The Court in MyMail was also
concerned with duplicative discovery. Id. In Adrain, the Court was similarly concerned with
having similar issues being decided in “five separate suits scattered across the country.” 2009
WL 3063414 at *2. In Eolas, the Court was concerned with enabling “multiple courts to
simultaneously address . . . identical issues” and the possibility of “inconsistent results.” 2010
WL 383762 at *2. In the Federal Circuit’s unpublished decision denying a writ of mandamus
and holding that the trial court’s decision in Eolas was not “patently erroneous,” the Federal
Circuit based its decision in part on the trial court’s concern with having multiple courts deciding
similar issues. In re Google, Inc., et al., 412 Fed. Appx. 295, 296; 2011 WL 772875 at *2 (C.A.
Fed. (Tex.)).6
The concerns underlying the decisions in MyMail, Adrain, and Eolas are not present in
WRT’s cases. The concern over having multiple forums does not apply because, unlike the
circumstances in MyMail, Adrain, and Eolas, all Defendants have joined in the pending motions
to transfer. Thus, a single forum – either this Court or the Northern District of California – will
handle all of the actions. Moreover, there are no risks of judicial inefficiencies or inconsistent
claim constructions because Defendants are amenable to having a single claim construction
proceeding and to consolidating much of the pretrial discovery. Thus, the reasoning underlying
the decisions in MyMail, Adrain, and Eolas would not apply to Defendants’ cross-motion even if
those cases had not been abrogated by Congress.
6

All of the decisions cited by WRT were issued before Congress issued the House Report on
the America Invents Act.

4

C.

WRT’s Argument That This Court Should Ignore Congress’s Clear Mandate
Is Nonsensical And Misapprehends The Legislative History Underlying Rule
20

WRT urges the Court to ignore Congress’s clear instructions in adopting the America
Invents Act because that legislation was not effective until September 16, 2011 and applies only
to actions filed after that date. (Dkt. No. 109 at 3.) Following WRT’s suggestion, however,
would exalt form over substance and contravene Congress’s plain mandate.
As explained in Defendants’ cross-motion (Dkt. No. 103 at 8-11), the legislative history
of Rule 20 from its inception until the enactment of the America Invents Act makes clear that the
recent amendments to Rule 20 were clarifications rather than fundamental changes. The House
Report makes clear that the amendments were to cure incorrect applications of Rule 20 in patent
cases, including the very line of cases that created and propagated the incorrect joinder that WRT
urges upon this Court. In the face of such a clear directive from Congress and in the absence of
concerns over having multiple forums decide the same issues, WRT’s motion to join all
Defendants in a single trial lacks merit.7 Joining the Defendants in a single trial would risk
appeals, reversals, and retrials – a scenario that would be highly inefficient and would serve
neither the parties nor the judiciary. Consistent with the Congressional intent reflected in the
America Invents Act, this Court should sever the cases for trial along the lines requested by
Defendants.
III.

CONCLUSION
For all of the above reasons, the Court should deny WRT’s consolidation motion and

grant Defendants’ cross-motion to sever the cases for trial.
7

Defendants are aware that in Ganas, LLC v. Sabre Holdings Corp., et al., Civil Action No.
2:10-CV-320-DF (attached as Ex. J), this Court acknowledged that recent amendments to Rule
20 were probative of the correct interpretation of existing law. (Ex. J at 15-16.) The Court,
however, felt bound to apply the reasoning of In re Volkswagen of America, Inc., 566 F.3d 1349
(Fed. Cir. 2009) that it was not an abuse of discretion to deny motions to sever and transfer when
granting such motions would result in multiple cases in multiple districts. See, e.g., Volkswagen,
566 F.3d at 1351. As explained above, the reasoning of Volkswagen is not relevant here because
all Defendants have joined in the transfer motion, and there is only one proposed transferee
court. Only one court will handle all of the cases.

5

Dated: October 28, 2011

Respectfully submitted,

/s/ Michael C. Smith
Michael C. Smith
[e-mail]
Texas State Bar No. 18650410
SIEBMAN, BURG, PHILLIPS & SMITH, LLP
P.O. Box 1556
Marshall, TX 75671-1556
Telephone: [phone]
Facsimile: 972.767.4620
James F. Valentine (admitted pro hac vice)
[e-mail]
California State Bar No. 149269
Daniel T. Shvodian (admitted pro hac vice)
[e-mail]
California State Bar No. 184576
PERKINS COIE LLP
3150 Porter Drive
Palo Alto, CA 94304-1212
Telephone: [phone]
Facsimile: 650.838.4350
Attorneys for Defendants and
Counterclaimants
A9.COM, INC., AMAZON.COM, INC., and
GOOGLE INC.

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/s/ Michael C. Smith
Michael C. Smith
[e-mail]
Texas State Bar No. 18650410
SIEBMAN, BURG, PHILLIPS & SMITH, LLP
P.O. Box 1556
Marshall, TX 75671-1556
Telephone: [phone]
Facsimile: 972.767.4620
Robert F. Perry (admitted pro hac vice)
Allison H. Altersohn (admitted pro hac vice)
Erik J. Dykema (admitted pro hac vice)
KING & SPALDING LLP
1185 Avenue of the Americas
New York, NY 10036
Telephone: [phone]
Facsimile: 212.556.2222
E-mail: [e-mail]
E-mail: [e-mail]
E-mail: [e-mail]
Attorneys for Defendant
NOKIA INC. and NOKIA CORPORATION

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/s/ Michael E. Jones
Michael E. Jones
Texas State Bar No. 18650410
Allen Franklin Gardner
POTTER MINTON P.C.
110 N. College, Suite 500
P.O. Box 359
Tyler, TX 75710-0359
Telephone: [phone]
Facsimile: 903.593.0846
E-mail: [e-mail]
E-mail: [e-mail]
Mark D. Rowland (admitted pro hac vice)
ROPES & GRAY LLP
1900 University Avenue, 6th Floor
East Palo Alto, CA 94303-2284
Telephone: [phone]
Facsimile: 650.566.4144
Email: [e-mail]
Attorneys for Defendant and Counterclaimant
RICOH INNOVATIONS, INC. and RICOH
COMPANY, LTD.

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CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was filed electronically in
compliance with Local Rule CV-5(a). As such, this document was served on all counsel who are
deemed to have consented to electronic service. Local Rule CV-5(a)(3)(A). Pursuant to Fed. R.
Civ. P. 5(d) and Local Rule CV-5(d) and (e), all other counsel of record not deemed to have
consented to electronic service were served with a true and correct copy of the foregoing by
email, on this 28th day of October, 2011.
/s/ Michael C. Smith
Michael C. Smith

09234-0001/LEGAL21940177.1