Pre-Trial Consolidation May Run Afoul Of The America Invents Act

The America Invents Act introduced a new statute, 35 U.S.C. § 299, which provides 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." In the years since its enactment, however, Section 299 has done little to change the way patent infringement cases are litigated. Instead of joining multiple patent defendants under Rule 20, district courts now often consolidate unrelated defendants for pre-trial purposes pursuant to Rule 42. Courts have reasoned that because Section 299 does not expressly refer to pre-trial consolidation, it is not prohibited. Although litigants have by and large accepted pre-trial consolidation as the new normal, the legislative history of Section 299 may indicate that this result is not what the drafters intended, and that advocates should think twice before going along with consolidation when it may be against their client's best interests.

The Origins of Section 299

Section 299 was enacted to combat a trend among plaintiffs (principally non-practicing entities) of filing a single lawsuit naming numerous unrelated defendants selling unrelated accused products. Many felt (and Congress ultimately agreed) that this practice undercut the ability of defendants to mount individualized defenses, and made venue transfer difficult. The court in WIAV Networks, LLC v. 3COM Corp., No. 10-3448, 2010 U.S. Dist. LEXIS 110957 (N.D. Cal. Oct. 1, 2010) described the issue colorfully as: "[e]ach defendant has simply been thrown into a mass pit with others to suit plaintiff's convenience." Often, the practical result of joinder was that many defendants chose to simply settle at the nuisance value of the lawsuit rather than seek adjudication on the merits.

It was with these concerns in mind that Congress drafted Section 299. The Official Report of the House Committee on the Judiciary concerning the America Invents Act (No. 112-98) explains that the "Act [] addresses problems occasioned by the joinder of defendants (sometimes numbering in the dozens) who have tenuous connections to the underlying disputes in patent infringement suits." The House Report further explains that Section 299 "effectively conform[s] [the district] courts' jurisprudence to that followed by a majority of jurisdictions," and cites Rudd v. Lux Prods. Corp., No. 09-6957, 2011 U.S. Dist. LEXIS...