TiVo Inc. v. Cisco Systems, Inc.

Filing 22

MEMORANDUM OPINION AND ORDER signed by Judge Rodney Gilstrap on 7/18/12. Time Warner Cable will be added as a party to this case per law clark.(bas)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
MOTOROLA MOBILITY, INC. ET AL.
Plaintiffs,
V.
TIVO, INC., ET AL.
Defendants.

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CAUSE NO. 5:11-CV-53-JRG

MEMORANDUM OPINION AND ORDER
Before the Court is Counterclaim Defendants Time Warner Cable Inc. and Time Warner Cable
LLC’s (collectively, “TWC”) Motion to Sever and Stay Tivo’s Claims Against Time Warner Cable (Dkt.
No. 110). The Court, having considered both the parties’ briefing and oral arguments, finds that the
motion should be GRANTED-IN-PART and DENIED-IN-PART as set forth below.
I.

Factual and Procedural Background
Motorola instituted this action against Tivo on February 25, 2011, alleging that Tivo infringed

three Motorola patents and also, seeking a declaratory judgment that Motorola did not infringe two Tivo
patents. The two Tivo patents at issue in the original complaint are U.S. Patent Nos. 6,233,389 (the “’389
patent”) and 7,529,465 (the “’465 patent”). Motorola’s declaratory claims related to its set-top digital
video recorder (“DVR”) boxes having a “QIP” designation (the “QIP boxes”).
On July 6, 2011, an order was entered staying this case for six months. On January 3, 2012, the
stay was lifted and a new scheduling ordered entered. Under the new scheduling order, the deadline for
joining additional parties and amending pleadings was April 30, 2012. On March 26, 2012, Tivo filed its
Amended Answer and Amended Counterclaims against Motorola and TWC, alleging infringement of
three of its patents: the ‘389 patent, the ‘465 patent, and U.S. Patent No. 6,792,195 (the “’195 patent).
The Amended Counterclaims added new claims against Motorola relating to not only Motorola’s
set-top DVR boxes with the “QIP” designation, but also its DVR boxes with “DCH,” “DCT,” and “DCX”
designations (the “DC boxes”). Tivo’s Amended Counterclaims also accused TWC of infringement
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relating to its distribution of Motorola’s DC boxes.

On June 29, 2012, Tivo timely served its

infringement contentions on Motorola and TWC, enumerating a number of accused boxes including the
Motorola DC boxes and also enumerating certain Cisco Systems, Inc. (“Cisco”) “HD” series of DVR
boxes (the “HD boxes”). Tivo asserts that TWC distributes the QIP, DC and HD boxes.
In a separate but related matter filed with this Court, the Cisco HD boxes are also accused of
infringement by Tivo in Tivo, Inc. v. Cisco Systems, Inc., Case No. 2:12-cv-311 (E.D. Tex.) (the “Cisco
case”). This separate action was filed by Tivo on June 4, 2012 and is now pending before this Court.
II.

Legal Standard
The America Invents Act (“AIA”), which became effective September 16, 2011, provides new

guidelines for determining whether the joinder of certain parties is appropriate. See 35 U.S.C. § 299. The
AIA limits the joinder of multiple defendants in patent cases. Id. The pertinent portion of the AIA reads
as follows:
With respect to any civil action arising under any Act of Congress relating to patents …
parties that are accused infringers may be joined in one action as defendants or
counterclaim defendants, or have their actions consolidated for trial, or counterclaim
defendants only if –
(1) Any right to relief is asserted against the parties jointly, severally, or in the
alternative with respect to or arising out of the same transaction, occurrence,
or series of transactions or occurrences relating to the marking, using,
importing into the United States, offering for sale, or selling of the same
accused product or process; and
(2) Questions of fact common to all defendants or counterclaim defendants will
arise in the action.
35 U.S.C. § 299. If parties are misjoined in violation of the AIA, Federal Rule of Civil Procedure 21
provides the remedy of severance. Fed. R. Civ. P. 21 (“On motion or on its own, the court may at any
time, or just terms, add or drop a party. The court may also sever any claim against a party.”)
III.

Analysis
TWC seeks to have this Court to sever Tivo’s claims against it and stay the same, pending

resolution of this case and the Cisco case. TWC argues that Tivo violated the AIA by joining it as a party
per its counterclaims filed in this litigation. TWC asserts that Tivo’s claims against both itself and
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Motorola are not based on the same accused products or processes, as required by the AIA. Essentially,
TWC argues that because Tivo alleges Motorola infringes its patents based on its conduct relating to two
types of DVR boxes (QIP and DC boxes), but only alleges TWC infringes its patents based on its conduct
relating to one type of box (the DC boxes), this action is not based on the same accused products. TWC
asserts that Motorola’s alleged infringement relating to the QIP boxes is unrelated to TWC’s alleged
infringement relating to the DC boxes, and thus fails to meet the requirements of the AIA. TWC argues
that the AIA requires complete commonality as to the same transaction or as to the accused products or
processes, as a prerequisite to properly joining more than a single defendant in a patent infringement suit.
In response, Tivo argues that at least some of its claims against both Motorola and TWC relate to
their conduct involving the DC boxes, and Tivo argues that this constitutes the “same accused product” as
required by the AIA.

The AIA allows for the joinder of two or more parties accused of patent

infringement only if “any right to relief is asserted against the parties jointly, severally, or in the
alternative…” 35 U.S.C. § 299. Tivo argues and TWC disputes that the presence of the word “any”
indicates that so long as joinder is appropriate as to one or more claims, that misjoinder will not result,
even if (as in this case) there are also one or more independent infringement claims against only one of
the defendants. Omega Patents, LLC v. Skypatrol, LLC, 2012 WL 2339320, at *2 (S.D. Fla. June 29,
2012). This Court agrees with Tivo that complete commonality of all claims in not required as long as at
least one claim overlaps among all of the defendants.
Here, because Tivo alleges that both Motorola and TWC infringe its patents based on their
conduct relating to the DC boxes, the same right to relief (being “any right to relief” as required by the
AIA) is asserted against both counterclaim defendants.

The additional independent claims against

Motorola only relating to the QIP boxes do not destroy the appropriate joinder of TWC. Accordingly, the
joinder of TWC, as to the claims relating to its conduct regarding the DC boxes, is proper in this case
under the AIA.
As to Tivo’s claims of TWC’s alleged infringement relating to Cisco HD boxes, the Court finds
that such addition to this litigation may not constitute an unpermitted joinder; however, the inclusion of
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these claims in the present case is clearly inefficient and frustrates traditional notions of judicial economy.
This Court is not unmindful of the fact that Tivo separately elected to sue Cisco in this Court on June 4,
2012, alleging infringement of the HD boxes asserted in this case, as well as a number of other Cisco HD
boxes. The Court finds that a limited restructuring of these separate actions would restore both efficiency
and judicial economy to both of these cases. Accordingly, this Court finds that all Cisco-related issues as
to its DVR boxes should be adjudicated in one action (the Cisco case) while all Motorola-related issues as
to its DVR boxes should be adjudicated in this action. This will, in the Court’s view, streamline and
clarify each action and will posture each case in a manner that will promote efficiency, fairness, and
judicial economy, while at the same time, avoid prejudice to Tivo. Accordingly, the Court, acting herein
to manage its own docket under Federal Rule of Civil Procedure 21, SEVERS the Cisco-related claims
against TWC from this action and CONSOLIDATES them into the Cisco case.
Finally, TWC argues that Tivo’s claims against it should be stayed pending the resolution of this
action. This Court finds there is no practical reason for a stay. By severing the Cisco claims against
TWC from this action and adding them to the Cisco case, there is no reason that TWC should not remain
a party and defend itself, along with Motorola, in this action, while also becoming a defendant and
defending itself, along with Cisco, in this Cisco case. The Court recently entered an Amended Docket
Control Order (Dkt. No. 115) to address TWC’s concerns with its addition to this suit. The parties are
directed to continue to meet all deadlines provided by such amended schedule. Accordingly, the Court
DENIES TWC’s request for a stay.
IV.

Conclusion
The Court holds that Tivo’s claims against TWC involving the Motorola DC boxes are properly

joined in this action and do not violate the express provisions of the AIA. However, as explained above,
the Court SEVERS Tivo’s claims against TWC involving the Cisco HD boxes and CONSOLIDATES the
same into Tivo, Inc. v. Cisco Systems, Inc., Case No. 2:12-cv-311 (E.D. Tex.). The Court’s intended
result is to leave this case structured as to Tivo’s counterclaims with Motorola and TWC as defendants
but only as to the accused Motorola boxes, while restructuring the Cisco case so that Tivo pursues its
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claims as plaintiff against both Cisco and TWC as defendants but only as to the accused Cisco boxes.
Such is hereby ORDERED. Further, the Court finds no merit in granting TWC’s request for a stay of
Tivo’s claims against it, and the same is hereby DENIED.

SIGNED this 19th day of December, 2011.
So ORDERED and SIGNED this 18th day of July, 2012.

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RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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