Multi-District Panel Rules That America Invents Act Does Not Bar Centralization Of Multiple Defendants In Single District

Bear Creek Technologies, Inc. ("Bear Creek") is the patent holder in fourteen patent infringement actions pending in three different district courts. Bear Creek moved for centralization in the District of Delaware or, alternatively, the Eastern District of Virginia. In each of the cases, Bear Creek alleged that various telecommunications companies infringed the Bear Creek patent and the various telecommunications companies raised questions surrounding the validity or enforceability of the patent.

Certain of the defendants did not oppose centralization but suggested that the district should be either Delaware or the Eastern District of Pennsylvania. Other defendants opposed centralization and the Vonage defendants asserted that the America Invents Act ("AIA") limits centralization under 28 U.S.C. § 1407.

The Panel began its analysis of the Vonage argument by focusing on Section 1407: "Under our governing statute, Section 1407, we transfer 'civil actions involving one or more common questions of fact' that 'are pending in different district' to a single district 'for coordinated or consolidated pretrial proceedings.' 28 U.S.C. § 1407(a). Even though Section 1407 transfer contemplates transfer 'for coordinated or consolidated pretrial proceedings,' we do not order pretrial 'consolidation' of the cases before us. That is done, if at all, in a district court, typically the MDL transferee court. We refrain from dictating the structure of an MDL's pretrial proceedings (such as whether the litigation will proceed in a coordinated manner as opposed to consolidation of involved actions to the sound discretion of the transferee judge."

Vonage asserted that the Panel could not centralize the litigation because there was only an assertion of commonality based on an assertion that the defendants infringed the same patent. This argument was based on the following section of the America Invents Act: "Allegations insufficient for joinder. For purposes of this subsection, accused infringers may not be joined in one action as defendants or counterclaims defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit."

The Panel disagreed. The panel found that "[t]he America Invents Act does not alter our authority to order pretrial centralization of this litigation. First, transfer under Section 1407 and joinder under Section 299 operate under decidedly different standards. The...