Interval Licensing LLC v. AOL, Inc. et al

Filing 193

MOTION to Sever by Defendant Yahoo! Inc. Oral Argument Requested. (Attachments: #1 Proposed Order Granting Motion to Sever) Noting Date 3/25/2011, (Walters, Mark)

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Interval Licensing LLC v. eBay, Inc. et al Doc. 193 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v. AOL, INC.; APPLE, INC.; eBAY, INC.; FACEBOOK, INC.; GOOGLE, INC.; NETFLIX, INC.; OFFICE DEPOT, INC.; OFFICEMAX, INC., STAPLES, INC., YAHOO! INC., AND YOUTUBE, LLC, Defendants. INTERVAL LICENSING LLC, Plaintiff, HONORABLE MARSHA J. PECHMAN UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE Case No.: 2:10-cv-01385-MJP DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 AND 21 Noted for Consideration: March 25, 2011 ORAL ARGUMENT REQUESTED Pursuant to Federal Rules of Civil Procedure 20 and 21 ("Rule 20" and "Rule 21"), Defendant Yahoo! Inc. ("Yahoo!"), through its undersigned counsel, respectfully renews its motion to dismiss or sever Yahoo! from the above-captioned action for misjoinder. I. INTRODUCTION As with the original complaint, Plaintiff Interval Licensing LLC's ("Interval") First Amended Complaint ("FAC") violates the Federal Rules of Civil Procedure ("Federal Rules") by misjoining together in one action claims against numerous defendants with no allegations that the defendants have worked together to infringe Interval's patents. Indeed, Interval's FAC and infringement contentions do not allege any coordinated action among the Defendants or any right to relief that arises out of "the same transaction, occurrence, or series of transactions or DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 1 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 Dockets.Justia.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 occurrences." Fed. R. Civ. P. 20(a)(2)(A). Yet, Interval's FAC improperly joins eleven different entities in a single action for patent infringement that involves four patents, over 65 claims, 175 accused instrumentalities, and 145 different websites. In the patent context, courts across the country have found a lack of transactional relatedness, and therefore joinder improper, when, as here, a plaintiff alleges infringement against unrelated defendants based on distinct accused products. The unfair prejudice that Yahoo! faces from misjoinder further supports severance. Before trial, Yahoo!'s ability to present individualized challenges based on non-infringement, invalidity, and claim construction will be severely hindered if Yahoo! is required to limit its disputes and briefing along with ten co-defendants who have differing interests, evidence, and strategies. Yahoo! will be unable to effectively defend itself at trial because the avalanche of evidence and arguments directed at the other Defendants' numerous websites and instrumentalities will overwhelm Yahoo!'s separate positions and lead to a strong likelihood of jury confusion. Rule 20 is intended to protect against this exact type of fundamental unfairness by limiting permissive joinder of defendants to those sued on claims arising from the same transaction or occurrence or series of transactions or occurrences. Consistent with Rule 20 and Rule 21, Yahoo! respectfully requests that the Court order plaintiff to dismiss Yahoo! without prejudice or sever Interval's claims against Yahoo! from the case. II. FACTUAL BACKGROUND On August 27, 2010, Interval filed a patent infringement complaint against eleven different Defendants: Yahoo!, Google, Inc. ("Google"), AOL, Inc. ("AOL"), Facebook, Inc. ("Facebook"), YouTube, LLC ("YouTube"), Apple, Inc. ("Apple"), eBay, Inc., Netflix, Inc., Office Depot, Inc., OfficeMax, Inc., and Staples, Inc. (each individually, a "Defendant," and collectively, the "Defendants"). (Docket Item No. ("D.I.") 1.) Each of the eleven Defendants offers a wide and unrelated array of products, technologies, and services, from notepads and office furniture to Internet search capabilities. Some of the Defendants are competitors (for example, Yahoo! and Google) and others have entirely different businesses (for example, DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 2 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Facebook and Office Depot, Inc.). Interval's initial Complaint accused Yahoo!, AOL, Apple, and Google of infringing U.S. Patent Nos. 6,263,507 ("the '507 patent"); 6,034,652 ("the '652 patent"); 6,788,314 ("the '314 patent"); and 6,757,682 ("the '682 patent") (collectively, the "patents-in-suit"). (Id.) The Complaint also alleged that YouTube, eBay, Inc., Netflix, Inc., Office Depot, Inc., OfficeMax, Inc., and Staples, Inc. infringed the '507 and '682 patents, and that Facebook infringed only the '682 patent. (Id.) On October 18, 2010, Google and YouTube filed a Motion to Sever (D.I. 63) and a Motion to Dismiss Interval's Complaint (D.I. 62). Defendants OfficeMax, Inc., eBay, Inc., Netflix, Inc., Office Depot, Inc., Staples Inc., Yahoo!, AOL, and Facebook joined the Motion to Dismiss and eBay, Inc., Netflix, Inc., Office Depot, Inc., Staples Inc., Yahoo!, and Facebook joined the Motion to Sever. (D.I. 74, 82-84, 86, 90-92.) Apple also filed separate motions to sever and dismiss. (D.I. 80, 81.) On December 10, 2010, this Court dismissed Interval's original Complaint because the allegations were "spartan" and failed to meet the requirements of the Federal Rules. (D.I. 147 at 2, 7.) In its December 14, 2010 Order Memorializing Scheduling Conference, this Court also "terminate[d] the [severance] motions on the docket without prejudice or ruling" and held that "Defendants may refile the motions or file amended motions to sever after they have reviewed the amended complaint and infringement contentions and met and conferred." (D.I. 149 at 2.) Interval filed its FAC on December 28, 2010, newly accusing Facebook of infringing its '507 patent. (D.I. 153 at 8-9.) Like its initial Complaint, Interval's FAC accuses the same four Defendants, Yahoo!, Google, AOL, and Apple of infringing all four patents. (D.I. 153.) The FAC also asserts the '682 and the '507 patents against all eleven Defendants. (Id. at 5-17, 24-33.) On the same day that it filed its FAC, Interval served its Disclosure of Asserted Claims and Infringement Contentions ("Infringement Contentions"). (D.I. 154.) Interval does not allege in its FAC or its Infringement Contentions that any connection or relationship exists among the eleven separate Defendants. The number and types of products accused of infringement varies among the Defendants. DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 3 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 For example, Interval accuses 69 websites for just one Defendant on one patent and 43 websites of another Defendant on the same patent. (D.I. 153 at 6-7, 14-15.) Each of Yahoo!'s websites and instrumentalities that are accused of infringing the patents-in-suit significantly differ from those of the other Defendants. Interval makes no allegation that its claims against each of the Defendants arise out of "the same transaction, occurrence, or series of transactions or occurrences." (D.I. 153.) Nor has Interval alleged that any of the Defendants acted in concert in any way. (Id.) On the contrary, Interval alleges independent acts of infringement by each of the Defendants. (Id.) Thus, Interval separately alleges that Yahoo! "has infringed and continues to infringe" certain of the patents-insuit by independently "making, using, selling, distributing, and encouraging customers to use" Yahoo!'s accused websites. (Id. at 14-16, 19-20, 23-24, 31-32.) Pursuant to the Court's December 14, 2010 Order Memorializing Scheduling Conference, Yahoo!'s counsel met and conferred with Interval's counsel on March 3, 2011. III. AUTHORITY AND ARGUMENT A. Interval's Joinder of Yahoo! with Unrelated Parties Runs Contrary to Rule 20 and Prevailing Case Law Although the Federal Rules encourage "joinder of claims, parties and remedies," a plaintiff does not have an unlimited right to join unrelated defendants in a single proceeding. See 18 United Mine Workers v. Gibbs, 383 U.S. 715, 724 (1966) (superseded by statute on other 19 grounds). "Joinder is not a substantive right, rather it is a procedural device . . . ." Colt Def. LLC 20 v. Heckler & Koch Def., Inc., No. 2:04cv258, 2004 U.S. Dist. LEXIS 28690, at *10 (E.D. Va. 21 Oct. 22, 2004). The Federal Rules therefore permit "the broadest possible scope of action 22 consistent with fairness to the parties." United Mine Workers, 383 U.S. at 724 (emphasis added). 23 Federal Rule of Civil Procedure 20(a)(2) imposes several limitations on a plaintiff's 24 ability to sue multiple defendants in a single suit. It states: 25 26 27 28 Persons . . . may be joined in one action as defendants 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 DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 4 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (B) any question of law or fact common to all defendants will arise in the action. The rule imposes several requirements before multiple defendants can be joined in a single action. First, there must be "the occurrence of some question of fact or law common to all parties" as required by Rule 20(a)(2)(B). Philips Elecs. N. Am. Corp. v. Contec Corp., 220 F.R.D. 415, 417 (D. Del. 2004). Second, there must be "the existence of a right to relief predicated upon or arising out of a single transaction or occurrence or series thereof" as required by Rule 20(a)(2)(A). Id. These are separate requirements and "both tests must be satisfied" to permit joinder. Id. Third, the complaint must allege a right to relief against all defendants "jointly, severally, or in the alternative," as required by Rule 20(a)(2)(A). The Ninth Circuit has interpreted the phrase "same transaction, occurrence, or series of occurrences" to require a degree of factual commonality underlying the claims. Bravado Int'l Group Merch. Servs. v. Cha, CV 09-9066-PSG-CW, 2010 U.S. Dist. LEXIS 80361, at *10 (C.D. Cal. June 30, 2010) (citing Coughlin v. Rogers, 130 F.3d 1348, 1350 (9th Cir. 1997)); Insituform Techs., Inc. v. Cat Contracting, Inc., 385 F.3d 1360, 1372 (Fed. Cir. 2004) (applying regional circuit law to questions of joinder). As demonstrated below, no such commonality exists here. "The rule governing misjoinder and nonjoinder of parties expressly provides that the remedy for misjoinder is . . . severance." 4 Moore's Federal Practice § 20.02[1][a]. Where a party has been misjoined, Rule 21 provides that "[on] motion or on its own, the court may at any time, on just terms, add or drop a party." Courts have broad discretion to sever under Rule 21. Golden Scorpio Corp. v. Steel Horse Bar & Grill, 596 F. Supp. 2d 1282, 1285 (D. Ariz. 2009) (citing Coleman v. Quaker Oats Co., 232 F.3d 1271, 1297 (9th Cir. 2000)). B. Misjoined Yahoo! Should Be Severed Because Claims Against Yahoo! and the Other Defendants Do Not Arise Out of the "Same Transaction, Occurrence, or Series of Transactions or Occurrences" The allegations in the FAC and Infringement Contentions demonstrate that Interval fails to satisfy the transactional-relatedness requirement for permissive joinder under Rule 20(a)(2).1 In addition, Interval has not met the requirement that the claims seek relief against all defendants "jointly, severally, or in the alternative." As explained in the concurrently-filed (Footnote continues on next page.) DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 5 sf-2962728 1 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1. Interval Does Not Allege Any Coordinated Action Among the Defendants Interval makes no allegation in the FAC that any connection or relationship exists between Yahoo! and any of the ten other Defendants. (D.I. 153.) Yahoo! acts wholly independently of each of the other Defendants. (Id.) Each of the Defendants develops its own products and services. None of the other defendants have any role in any of the Yahoo! accused products. In addition, Interval does not assert any connection or relationship between Yahoo!'s alleged acts of infringement and those of the other Defendants. (Id.) The FAC also fails to allege that Yahoo! and any other Defendant (let alone all ten other Defendants) are jointly or severally liable, conspired with each other, or acted in concert in any way to infringe the patents-in-suit. (Id.) Interval, therefore, fails to allege that its claims against Yahoo! and any of the other ten Defendants arise out of "the same transaction, occurrence, or series of transactions or occurrences." Pergo, Inc. v. Alloc, Inc., 262 F. Supp. 2d 122, 127-28 (S.D.N.Y. 2003) ("[T]he fact that two parties may manufacture or sell similar products, and that these sales or production may have infringed the identical patent owned by the plaintiffs is not sufficient to join unrelated parties as defendants in the same lawsuit pursuant to Rule 20(a)."). 2. Overwhelming Authority From Numerous Jurisdictions Does Not Support Interval's Improper Joinder 17 18 19 20 21 22 23 24 25 26 27 28 Interval's FAC fails to demonstrate 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 [Rule] 20(a)(2) states is a (Footnote continued from previous page.) Defendants Ebay Inc., Netflix, Inc., Office Depot, Inc., and Staples, Inc.'s Renewed Motion to Sever Or Dismiss for Misjoinder Pursuant to Fed. R. Civ. P. 20 and 21, mere allegations that two defendants inflicted the same type of harm are not sufficient to satisfy Rule 20. (D.I. 192.) Interval must allege that the Defendants caused the same harm for which Defendants are liable jointly, severally or in the alternative. See Arista Records LLC v. Does 1-4, 589 F. Supp. 2d 151, 155 (D. Conn. 2008) ("Further, as the Magistrate Judge noted, because Plaintiffs did not allege that the Doe Defendants caused the same harm (rather than the same type of harm), joinder is improper . . . .")). Yet, Interval's FAC does not assert that any of the Defendants share liability for the same harm or injury, either jointly, severally, or in the alternative. Instead, Yahoo!'s liability would be separate and independent, not shared (whether joint or several or alternative) with another Defendant. Yahoo! hereby joins and incorporates by reference the arguments set forth in eBay's concurrently-filed Motion to Sever (D.I. 192). DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 6 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 precondition for the permissive joinder of defendants." WIAV Networks LLC v. 3COM Corp., No. C 10-03448 WHA, 2010 WL 3895047, at *3 (N.D. Cal. Oct. 1. 2010). All in all, [plaintiff] cannot escape the fact that it is suing unrelated and competing defendants for 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." Id. at 19 (citing Spread Spectrum Screening, LLC v. Eastman Kodak Co., No. 10 C 1101, 2010 WL 3516106, at *2 (N.D. Ill. Sept. 1, 2010)); Golden Scorpio, 596 F. Supp. 2d at 1285 ("The 8 authority from other courts provides that allegations against multiple and unrelated defendants for 9 acts of patent . . . infringement do not support joinder under Rule 20(a)."). 10 In San Francisco Tech, the district court confronted a similar inquiry and concluded that 11 "there simply [wa]s no basis to join these [types of] defendants in a single suit" because "the only 12 commonality among the Defendants [wa]s that each of them [wa]s alleged to have violated 35 13 U.S.C. § 292." San Francisco Tech., Inc. v. Glad Prods. Co., No. 10-CV-00966, 2010 U.S. Dist. 14 LEXIS 83681, at *15-18 (N.D. Cal. July 19, 2010) (quoting Technology, Inc. v. Adobe Sys. Inc., 15 No. 10-01652 RS, 2010 WL 1640397, at *2 (N.D. Cal. Apr. 19, 2010); Reid v. Gen. Motors 16 Corp., 240 F.R.D. 260, 263 (E.D. Tex. 2007) ("Allegations of infringement against two unrelated 17 parties based on different acts do not arise from the same transaction. . . ."); Pergo, 262 F. Supp. 18 2d at 128 ("[T]he fact that two parties may manufacture or sell similar products, and that these 19 sales or production may have infringed the identical patent owned by the plaintiffs is not 20 sufficient to join unrelated parties as defendants in the same lawsuit pursuant to Rule 20(a)."); 21 New Jersey Mach. Inc. v. Alford Indus., Inc., No. 89-1879(JCL) 1991 WL 340196, at *2 (D.N.J. 22 Oct. 7, 1991), ("Infringement of the same patent by different machines and parties does not 23 constitute the same transaction or occurrence to justify joinder of the new defendants"), aff'd, 983 24 F.2d 1087 (Fed. Cir. 1992). 25 Nevertheless, Interval overlooks its failure to comply with Rule 20(a)(2) and improperly 26 throws Yahoo! "into a mass pit with [the other Defendants] to suit [plaintiff's] convenience." 27 WiAV Networks, 2010 WL 3895047, at *20; Multi-Tech Sys., Inc. v. Net2Phone, Inc., No. 00-346, 28 DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 7 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2000 U.S. Dist. LEXIS 22683, at *22 (D. Minn. June 26, 2006) ("[W]here patent infringement claims are brought against multiple, unrelated defendants, courts have held joinder to be inappropriate pursuant to Rule 20."); Verve L.L.C. v. Hypercom Corp., No. A-04-CA-062-LY, slip op. at 3-4 (W.D. Tex. Dec. 29, 2004) (holding that allegations that defendants have committed similar acts of infringement do not meet" the "transaction test" set out in Rule 20(a)); Colt Def., 2004 U.S. Dist. LEXIS 28690, at *13 ("allegations against multiple and unrelated defendants for independent acts of patent . . . infringement do not set forth claims arising from the same transaction or occurrence within the meaning of Rule 20(a)"). Interval previously argued that joinder was proper by noting the likelihood that Defendants will "challenge the validity of the patents in suit." (D.I. 122 at 5.) Under Rule 20(a)(2)(A), however, joinder must arise out of a plaintiff's "rights to relief" against multiple defendants ­ not the defendants' overlapping affirmative defenses. See MLR, LLC v. U.S. Robotics Corp., No. 02-c-2898, 2003 U.S. Dist. LEXIS 2827, at *9 (N.D. Ill. Feb. 25, 2003) ("Rule 20(a) . . . requires that a claim asserted against the Defendants arise out of the same transaction or occurrence."). Yahoo! is a misjoined party, and the claims against Yahoo! should be severed from Interval's claims against the other ten Defendants pursuant to Rule 21. Philips, 220 F.R.D. at 418 (granting defendant's motion to sever in a patent infringement case because the only connection between defendants was that they infringed the same patents, "which is an insufficient basis to join unrelated parties as defendants in the same lawsuit"). C. Interval's Improperly Joined Claims Against Yahoo! Are Unfairly Prejudicial Even if joinder had been proper under Rule 20, this Court should still sever Yahoo! from the case under Rule 21, which allows a court to "sever any claim against a party" "on its own . . . at any time, [and] on just terms." The district court may sever the trial in order to avoid prejudice. See Fed. R. Civ. P. 21; Coleman, 232 F.3d at 1296-97 (upholding severance in part because the district court "weighed the interests of judicial efficiency and found them outweighed by the potential prejudice"). DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 8 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 8 9 10 11 12 Interval asserts 63 claims against Yahoo!. (D.I. 167 at 2.) Interval's allegations of infringement, whether or not they rest on theories that can be characterized as "similar" to Interval's theories against other defendants, are directed to Yahoo! websites and functions that are necessarily subject to evidence specific to Yahoo!. The problems posed by multiple parties and unrelated websites and instrumentalities are multiplied by the assertion of over 65 different claims in four patents. As Judge Alsup noted in WiAV, a case in which fewer patents and claims were asserted, this creates a "monumental mess." 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. See WIAV Networks, 2010 WL 3895047, at *22. This monumental mess poses an unreasonable burden on Yahoo!, the Court and the jury. 13 Yahoo! will be unfairly prejudiced both before and during trial by being lumped in with 14 all the other ten Defendants who will "surely have competing interests and strategies," (id. at 16) 15 and thus, should be "entitled to present individualized assaults on questions of non-infringement, 16 invalidity, and claim construction." Id. ("whatever common issues may exist from device to 17 device will be overwhelmed by the individual issues of claim construction, damages, willfulness, 18 and discovery supervision.") (id. at 22) (emphasis added). 19 Recognizing the unwieldy size and complexity of this case, the Court recently issued a 20 Scheduling Order that puts the case on two "tracks." (D.I. 178.) The Court's Order places 21 Interval's claims related to the '652 and the '314 patents together onto the first track and the 22 remaining claims related to the '682 and the '507 patents onto the second track. (Id.) Notably, 23 despite the placement of the case onto two separate tracks, all eleven Defendants are joined 24 together on the second track because all defendants are accused of infringing the '682 and the 25 '507 patents. (Id.) 26 On each track, Defendants are grouped together and subject to certain limitations with 27 respect to claim construction, depositions, discovery, and briefing. (Id.) Requiring Yahoo! to 28 DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 9 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 coordinate and share limited space and time with the other Defendants, who will likely disagree on several points, prejudices Yahoo!'s ability to fully pursue its own individualized defenses. For example, on the second track, all eleven Defendants are grouped together for claim construction and limited to 10 total claim terms to construe for all four patents-in-suit, and "40 pages maximum for opening and responsive briefing." (D.I. 178 at 4.) Because Yahoo!'s products differ from those of the other defendants, it is quite likely Yahoo! may choose to focus on different claim terms from the other defendants. Yahoo! will also suffer unfair prejudice at trial. Without any showing that Defendants' websites operate in the same manner or are subject to overlapping evidence, Interval suggests that it will try to prove its case against one website or service, and then attempt to argue that every other purportedly "similar" accused instrumentality infringes for the same reasons. (D.I. 167 at 10.) This approach is improper and highly prejudicial to Defendants because a jury could become confused by a proceeding involving a multitude of unrelated products, infringement theories, and defenses. Cf. Coleman, 232 F.3d at 1296 (holding that in granting severance, the "district court properly considered the potential prejudice . . . and the possibility of factual and legal confusion on the part of the jury"). This likelihood of confusion and prejudice is precisely the reason why Rule 20 requires "transactional relatedness" for joinder of unrelated defendants. Accordingly, Yahoo! should be dismissed from this case, or the claims against it should be severed. D. Efficiency May Be Achieved After Severance Given the straightforward analysis set forth in Rule 20(a), there is no basis to permit misjoinder for the sake of "efficiency." See id. at 1297 (upholding severance in part because the district court "weighed the interests of judicial efficiency and found them outweighed by the potential prejudice"); Colt, 2004 U.S. Dist. LEXIS, at *16 ("[T]o the extent that considerations of judicial economy can factor into the court's decision whether to sever the claims against [the defendant], they do so only after the plaintiff has first satisfied the requirements of Rule 20(a)."). This Court has the ability to achieve efficiency objectives without condoning the misjoinder of claims arising out of different transactions and occurrences. Federal Rule of Civil DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 10 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Procedure 42(a), permitting a court to consolidate cases to the extent they present a common question of law or fact, is available to consolidate claim construction and any overlapping dispositive motions concerning invalidity. Cf. Paine, Webber, Jackson & Curtis, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 564 F. Supp. 1358, 1370 (D. Del. 1983) (distinguishing between Rule 42(a)'s requirement only of a common question of law or fact and Rule 20(a)'s additional requirement that the claims arise out of the same transaction or occurrence). Other tools, such as coordination or consolidation of discovery, particularly as it relates to claim construction and/or invalidity of the patents-in-suit, may also be employed to preserve judicial efficiency and party resources. Finally, the Court has the inherent power to control its docket. For example, the Court could set simultaneous scheduling for dispositive motion deadlines or even stay one case pending the outcome of another case ­ as long as in achieving efficiency and judicial economy, the fundamental right of a party to defend itself is not sacrificed. See United Mine Workers, 383 U.S. at 724. IV. CONCLUSION For the foregoing reasons, and those briefed in eBay, Inc., Netflix, Inc., Office Depot, Inc., and Staples, Inc.'s concurrently filed Motion to Sever, Yahoo! respectfully requests that the Court dismiss Yahoo! from this case, or sever the claims against it, because joinder of Defendants here is improper. DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 11 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 Dated: March 3, 2011 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 12 sf-2962728 By: s/ Mark P. Walters Mark P. Walters (WSBA #30819) Dario A. Machleidt (WSBA #41860) FROMMER LAWRENCE & HAUG LLP 1191 Second Avenue Suite 2000 Seattle, WA 98101 Tel: 206-336-5684 Fax: 212-588-0500 E-mail: MWalters@flhlaw.com and Admitted Pro Hac Vice Michael A. Jacobs Matthew I. Kreeger Richard S.J. Hung Francis Ho Eric W. Ow MORRISON & FOERSTER LLP 425 Market Street San Francisco, California 94105-2482 Tel: 415-268-7000 Fax: 415-268-7522 Attorneys for Defendant YAHOO! INC. FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE I hereby certify that on March 3, 2011, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following counsel of record: Attorneys for AOL Inc. Molly A. Terwilliger: mollyt@summitlaw.com Gerald F. Ivey: gerald.ivey@finnegan.com Robert L. Burns: robert.burns@finnegan.com Cortney S. Alexander: cortney.alexander@finnegan.com Elliot C. Cook: elliot.cook@finnegan.com Attorneys for Apple, Inc. David Almeling: dalmeling@omm.com Brian Berliner: bberliner@omm.com George Riley: griley@omm.com Jeremy Roller: jroller@yarmuth.com Scott Wilsdon: wilsdon@yarmuth.com Neil Yang: nyang@omm.com Attorneys for eBay, Inc., Netflix, Inc., Office Depot, Inc. and Staples, Inc. Christopher Carraway: chris.carraway@klarquist.com Kristin Cleveland: kristin.cleveland@klarquist.com John Vandenberg: john.vandenberg@klarquist.com Christopher Wion: chrisw@dhlt.com Arthur Harrigan, Jr.: arthurh@dhlt.com Attorneys for Facebook, Inc. Christen Dubois: cdubois@cooley.com Heidi Keefe: hkeefe@cooley.com Michael Rhodes: mrhodes@cooley.com Elizabeth Stameshkin: lstameshkin@cooley.com Mark Weinstein: mweinstein@cooley.com Chris Durbin: cdurbin@cooley.com Attorneys for Google, Inc. and YouTube, LLC Aneelah Afzali: aneelah.afzali@stokeslaw.com Aaron Chase: achase@whitecase.com Dimitrios Drivas: ddrivas@whitecase.com John Handy: jhandy@whitecase.com Warren Heit: wheit@whitecase.com Kevin McGann: kmcgann@whitecase.com Scott Johnson: scott.johnson@stokeslaw.com Shannon Jost: shannon.jost@stokeslaw.com DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 13 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690 i 1 2 3 4 5 Attorneys for OfficeMax, Inc. Kevin Baumgardner: kbaumgardner@corrcronin.com Steven Fogg: sfogg@corrcronin.com John Letchinger: letchinger@wildman.com Douglas Rupert: rupert@wildman.com Jeff Neumeyer: jeffneumeyer@officemax.com DATED: March 3, 2011 /s/ Mark P. Walters Mark P. Walters, WSBA No. 30819 Dario A. Machleidt, WSBA No. 41860 FROMMER LAWRENCE & HAUG LLP 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT YAHOO! INC.'S RENEWED MOTION TO DISMISS OR SEVER FOR MISJOINDER PURSUANT TO FED. R. CIV. P. 20 & 21, Case No. 2:10-cv-01385-MJP - 14 sf-2962728 FROMMER LAWRENCE & HAUG LLP 1191 Second Ave., Seattle, Washington 98101 (206) 336-5690

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