Multidistrict Litigation (“MDL”) Transfers – Recent Decisions ….

As we previously reported, the Smith-Leahy America Invents Act (“AIA”) prohibits plaintiff patent owners from joining multiple, unrelated defendants in a single action. An unintended, yet significant, consequence of this is that patent holders must bring serial litigations when more than one unrelated infringer is implicated. And, with the added possibility of declaratory judgment actions commenced in different venues, there is a real potential to have multiple cases — involving the same patent(s) — scattered across different judicial districts. Beyond the obvious resource concerns, this scenario may increase the risk of conflicting rulings.

The Multidistrict Litigation Statute, 28 U.S.C. § 1407(a), is an important procedural tool for such scenarios. The statute provides that the Multidistrict Litigation Panel (the “MDL Panel” or “Panel”) may transfer civil actions for coordinated or consolidated pretrial proceedings where the cases “involv[e] one or more common questions of fact,” and upon a determination that the transfer and consolidation: will be for “the convenience of parties and witnesses”; and “will promote the just and efficient conduct of such actions.” 28 U.S.C. § 1407(a). It is well-settled that centralization under § 1407(a) is appropriate in patent cases where it will eliminate duplicative discovery, prevent inconsistent pretrial rulings and conserve the resources of the parties, their counsel and the courts.

Some recent decisions by the MDL Panel are reminders of the importance of this procedural consideration:

  • In Re: Maximum Integrated Prods., Inc. Patent Litigation, MDL No. 2354 (June 11, 2012) (centralizing in W.D. of Pennsylvania fourteen actions pending in five districts and noting, inter alia, that Section 1407(a) does not require a “complete identity” or a “majority of common factual or legal issues” as a prerequisite). Importantly, the Panel specifically rejected respondents’ argument that the AIA “automatically trumped” the pretrial efficiencies that can be gained from MDL centralization;
  • In Re: Parallel Networks, LLC (‘111) Patent Litigation, MDL No. 2355 (June 12, 2012) (centralizing in E.D. Texas nine actions pending in two districts and noting, inter alia, that common questions of fact existed and centralization would serve convenience and efficiency considerations);
  • In Re: Nebivolol (‘040) Patent Litigation, MDL. No. 2364 (June 12, 2012) (centralizing in N.D. Illinois two actions pending in two districts and recognizing, inter alia, that actions involving complex pharmaceutical patents and generic challenges to same are “particularly well-suited” for MDL transfer);

IP practitioners should keep MDL in mind in multi-defendant suits, and perhaps more so in this era of the AIA.

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