e-Image Data Corporation v. Digital Check Corp

Filing 45

ORDER signed by Judge Pamela Pepper for Judge Rudolph T. Randa on 4/29/2016. 35 Defendant's MOTION to Sever Claims GRANTED; Counts IV through VI of Second Amended Complaint and Counts IV through XI of Second Amended Counterclaim SEVERED from this action. 44 Joint MOTION to Modify Schedule in relation to patent claims DENIED as moot. (cc: all counsel)(cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
E-IMAGEDATA CORP.,
Plaintiff,
-vs-

Case No. 15-C-658

DIGITAL CHECK CORP.
d/b/a ST IMAGING,
Defendant.
DECISION AND ORDER
The parties in this case are competitors in the field of digital
microfilm scanning systems: e-ImageData Corp., a Wisconsin corporation,
and Digital Check Corp., d/b/a ST Imaging, a Delaware corporation with its
principal place of business in Illinois. Both parties advance claims for false
advertising under state and federal law. e-Image also brought claims for
patent infringement. ST Imaging moves to sever the patent claims.
“A party asserting a claim, counterclaim, crossclaim, or third-party
claim may join, as independent or alternative claims, as many claims as it
has against an opposing party.” Fed. R. Civ. P. 18(a). “Except for the
limitations imposed by the requirements of federal subject-matter
jurisdiction, there is no restriction on the claims that may be joined in
actions brought in the federal courts.” Wright & Miller, 6A Fed. Prac. &

Proc. Civ. § 1582 (3d ed.). Severance of properly-joined claims is committed
to the discretion of the district court. Fed. R. Civ. P. 21; Rice v. Sunrise
Express, Inc., 209 F.3d 1008, 1016 (7th Cir. 2000).
In considering a motion to sever, courts consider any or all of the
following factors: (1) whether the claims arise out of the same transaction
or occurrence; (2) whether the claims present some common questions of
law or fact; (3) whether settlement of the claims or judicial economy would
be facilitated; (4) whether prejudice would be avoided if severance were
granted; and (5) whether different witnesses and documentary proof are
required for the separate claims. In re High Fructose Corn Syrup Antitrust
Litig., 293 F. Supp. 2d 854, 862 (C.D. Ill. 2003). At bottom, courts may
order severance when it will serve the ends of justice and further the
prompt and efficient disposition of litigation. Tab Exp. Int’l, Inc. v. Aviation
Simulation Tech., Inc., 215 F.R.D. 621, 623 (D. Kan. 2003).
In the initial pleadings, e-Image and ST Imaging accused each other
of making false and misleading statements about the parties’ competing
lines of desktop digital microfilm scanners, e-Image’s ScanPro line and ST
Imaging’s ST Viewscan line. The Court conducted a Rule 16(b) scheduling
conference, established deadlines for discovery and dispositive motions,
and set this matter for trial in March of 2017. Then, just as this case was
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getting off the ground, e-Image amended its pleadings to bring claims for
patent infringement.
In the Court’s experience, patent litigation is an entirely different
animal than other types of civil litigation. The parties’ attempts to deal
with the patent claims through amendments to the scheduling order
illustrate this fundamental reality. See ECF No. 31, establishing dates for,
among other things, production of infringement contentions, invalidity and
unenforceability contentions, inception documents, technical documents
and prior art, and the exchange of terms and proposed constructions.
Essentially, the parties were forced to shoehorn numerous patent-specific
deadlines into a scheduling order that did not contemplate such an onerous
workload. This is not to say that patent claims can never be joined with
other types of claims. Indeed they can, and to be precise, this motion has
nothing to do with misjoinder. The addition of patent claims, however, will
very likely delay the ultimate resolution of the false advertising claims.
The tail is now wagging the dog.1
From a judicial economy perspective, e-Image argues that it is more
efficient to have one lawsuit instead of two. Not so where, as here, the

1

On January 22, e-Image submitted 72 infringement contentions. The tail wagging the dog

indeed.

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claims do not present common issues of law or fact. e-Image alleges, for
example, that ST Imaging falsely represented that its ViewScan products
are “Made in the USA,” have the relevant safety approvals, and have a
maximum image size of 80 megapixels. Such claims are wholly unrelated to
the subject matter of the patent claims. Those claims involve an analysis of
the mechanical structure of the Viewscan products to determine if they
infringe upon e-Image’s patents. Heil Co. v. Hartford Accident & Indem.
Co., 937 F. Supp. 1355, 1366 (E.D. Wis. 1996) (“the gravamen of direct
infringement of a patent is making, using or selling a patented invention
not advertising it”). Additionally, e-Image’s claim that ST Imaging made
false or misleading statements about e-Image’s products obviously have
nothing to do with whether ST Imaging’s products infringe the patents.
Accordingly, neither the Court nor the finder of fact will be in a better
position to adjudicate the patent claims having resolved the false
advertising claims, and vice versa.
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS
HEREBY ORDERED THAT ST Imaging’s motion to sever [ECF No. 35]
is GRANTED. Counts IV through VI of the Second Amended Complaint,
in addition to Counts IV through XI of the Second Amended Counterclaim,
are severed from this action. Since the patent claims are now severed, the
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parties’ joint motion to modify the Scheduling Order in relation to the
patent claims [ECF No. 44] is DENIED as moot.
Dated at Milwaukee, Wisconsin, this 29th day of April, 2016.
SO ORDERED:
s/ Pamela Pepper
for HON. RUDOLPH T. RANDA
U.S. District Judge

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