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In re EMC Corp.

By Sergey Kolmykov and Zachary Silbersher
July 30, 2012

The Federal Circuit recently addressed whether it is proper to join multiple defendants within a single action for no other reason than each defendant is accused of infringing the same patent. In re EMC Corp., Misc. Dkt. No. 100 (Fed. Cir. May 4, 2012) (Dyk J.). The case arose within the context of mandamus relief sought by eight defendants joined in the same patent case in the Eastern District of Texas, after the district court barred those defendants from severing or transferring their claims. The defendants' petition for a writ of mandamus was filed before enactment of the new non-joinder provision under the Leahy-Smith America Invents Act, Pub. L. No. 112-29, sec. 19(d), ' 299, 125 Stat. 284 (2011) (to be codified at 35 U.S.C. ' 299) (“AIA”). For this reason, the Federal Circuit expressly warned that its decision on the defendants' writ was not an interpretation of the AIA. Nevertheless, the court's reasoning in the course of granting the defendants' writ suggests that the Federal Circuit may have been foreshadowing how it will interpret the AIA's new non-joinder provision when faced with the opportunity in the future to do so.

Factual History

The plaintiff, Oasis Research LLC (“Oasis”), brought an action in the Eastern District of Texas asserting infringement of four separate patents against 18 independent defendants. Slip Op. at 3. The patents are directed to methods for providing online services for backup, storage and processing of data and software for remote customers by a service provider over the Internet. (See, e.g., claim 9 of U.S. Patent No. 7,080,051). Each of the 18 defendants allegedly offers online backup and storage services, such as those disclosed within the asserted patents. Slip Op. at 3.

These 18 defendants moved to sever and transfer the claims against them on the grounds that “there was no concert of action” and the claims against them did not arise out of the “same transaction or occurrence,” as required by Rule 20 of the Federal Rules of Civil Procedure, which governs the permissive joinder of parties. Slip Op. at 4. Oasis acknowledged that the asserted “patents cover a broad range of technologies,” but insisted that joinder was proper because each defendant offers a “similar” online backup/storage service, which allegedly infringes the asserted patents. Slip Op. at 4.

The magistrate judge for the Eastern District of Texas agreed with the Oasis finding. Slip Op. at 4. The magistrate judge found that Rule 20's same-transaction-or-occurrence requirement was satisfied because the accused services were “not dramatically different.” Slip Op. at 4. The magistrate judge also found that common questions existed among the defendants with respect to the scope of the patents, the validity of the claims and claim construction. Slip Op. at 4. Finally, the magistrate judge suggested that severing the actions would be an inefficient use of judicial resources because it would divide “a single action into seven different lawsuits scattered across the country.” Slip Op. at 4.

The Federal Circuit's Decision

The Federal Circuit disagreed. The court noted that courts are guided by Rule 20 when deciding a motion under Rule 21, which governs severance. Slip Op. at 8. Rule 20 has two requirements. First, the asserted claims must arise out of the “same transaction, occurrence, or series of transactions or occurrences,” and second, there must be a “question of law or fact common to all defendants.” Slip Op. at 9. Based on these two requirements, the Federal Circuit acknowledged that independent actors, who do not act in concert, may nevertheless be properly joined under Rule 20. This is because Rule 20 contemplates joining claims arising from a “series of transactions or occurrences,” and thus, simply because “defendants are independent actors does not preclude joinder.” Slip Op. at 9. The court continued, “it follows that the mere fact that a case involves independent actors as defendants does not necessarily bring the case outside the scope of Rule 20.” Slip Op. at 11.

On the other hand, the Federal Circuit emphasized that Rule 20 still has two requirements ' “the transaction-or-occurrence requirement” and the “common question of law or fact” requirement. Slip Op. at 11. Independent parties cannot be properly joined simply because there is a common question of law or fact. Slip Op. at 11. In the context of patent cases, this means that joinder cannot be warranted just because each defendant is alleged to be infringing the same patent. Slip Op. at 11. That is because the requirement that the infringement allegations arise from the same transaction, occurrence or series of transactions or occurrences will still be lacking. Slip Op. at 11. The Federal Circuit stated that, even where common questions of law or fact may exist among the defendants, such as questions pertaining to patent validity and claim construction, allegations that each defendant is infringing the same patent cannot, by themselves, satisfy Rule 20. Slip Op. at 11.

The court pointed to decisions outside the Eastern District of Texas that demonstrated that the approach taken by the district court in Texas to joining parties in patent cases is in the minority. Slip Op. at 11 n.2. The court also pointed out that, under its jurisprudence, infringement claims against different parties for the same patent do not by themselves satisfy the same-transaction-or-occurrence requirements of Rule 13 (governing counterclaims and cross-claims) and Rule 14 (third-party practice). Slip Op. at 11-12.

In fact, the Federal Circuit recognized that both scholars as well as other courts have explained that Rule 13(a)'s transaction-or-occurrence test, which requires a “logical relationship” between the claims, is equally applicable to Rule 20. Slip Op. at 12-13. Based on this, the court adopted the “logical relationship test” for Rule 20. The court held, “independent defendants satisfy the transaction-or-occurrence test of Rule 20 when there is a logical relationship between the separate causes of action.” Slip Op. at 13. The Federal Circuit construed this to require that to join patent infringement defendants together, their acts of infringement must “share an aggregate of operative facts.” Slip Op. at 13 (emphasis in original).

Turning to the magistrate judge's holding, the court deemed the magistrate's finding that the accused services were “not dramatically different” to be inconsistent with Rule 20's requirement that the acts of infringement “share an aggregate of operative facts.” Slip Op. at 14. The Federal Circuit reasoned that the magistrate judge's standard would be satisfied as long as accused products or services were “similar,” which in effect requires little more than the allegation that each defendant is infringing the same patent. Slip Op. at 14. In such a case, the court stated, Rule 20 would “inevitably be satisfied.” Slip Op. at 14.

Thus, the Federal Circuit rejected the possibility that allegations of infringing the same patent, without more, can satisfy the requirements of joinder under the Federal Rules of Civil Procedure. The court did not, however, rule out the possibility that defendants with different products or services cannot be joined. Indeed, the court stated, “the sameness of the accused products or processes is not sufficient.” Slip Op. at 15. To satisfy the shared-aggregate-of-operative facts test, “accused products or processes [must be] the same in respects relevant to the patent.” Slip Op. at 16. For instance, different products may support joinder if they each source the same part, which is pertinent to infringement of the asserted patent. Slip Op. at 16. The court enumerated a number of other factual considerations that may be pertinent to satisfying the required logical relationship: “the alleged acts of infringement occurred during the same time period, the existence of some relationship among the defendants, the use of identically sourced components, licensing or technology agreements between the defendants, overlap of the products' or processes' development or manufacture, and whether the case involves a claim for lost profits.” Slip Op. at 16.

Viewing the Decision in Light of the AIA

The Federal Circuit's decision must be viewed in light of the recently passed AIA. EMC Corp. was not decided under the AIA because the petitioners' writ of mandamus was filed days before the AIA was signed into law. Slip Op. at 8. Because the non-joinder provision of the AIA is not retroactive, (AIA ' 19(e), 125 Stat. at 333.), the court held that its decision is only precedential to cases filed before passage of the new non-joinder provision. Slip Op. at 8.

In a footnote near the end of its opinion, the court expressly cautioned that “our approach to the new provision is not dictated by this case.” Slip Op. at 16 n.4. Recognizing that the AIA's new non-joinder provision expressly provides for “the same accused product or process,” the court stated, “[w]e need not decide whether the sameness test in the new legislation is identical to the sameness test we adopt here for cases not covered by the new legislation.” Slip Op. at 16 n.4.

The AIA provides that multiple defendants that are not sued jointly or severally can be properly joined only if the alleged acts of infringement “aris[e] out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process.” AIA, 125 Stat. 284, 332-33 (emphasis added). One interpretation of that provision could suggest that the AIA is more narrow than the court's ruling in EMC Corp. with respect to joining parties. Whereas EMC Corp. allows for joinder in some circumstances where the accused products or processes are not the same, the AIA expressly requires the “same accused product or process.”

Nevertheless, the Federal Circuit's ruling in EMC Corp. could foreshadow a gloss that the Federal Circuit intends to apply to its interpretation of the AIA. In particular, the court's holding EMC Corp. may specify more precisely what ' among a series of accused products ' must actually be the same for joinder to be warranted. As the court stated, on the one hand, “the sameness of the accused products or processes is not sufficient” for joining independent parties, but on the other hand, joinder is warranted where the “accused products or processes [are] the same in respects relevant to the patent.” That approach may likely mirror the court's interpretation of the AIA's new non-joinder provision when the Federal Circuit has the opportunity to address it.


Sergey Kolmykov is counsel at Locke Lord LLP specializing in patent litigation, licensing and prosecution. Zachary Silbersher is an associate at the firm specializing in patent litigation and patent prosecution.

The Federal Circuit recently addressed whether it is proper to join multiple defendants within a single action for no other reason than each defendant is accused of infringing the same patent. In re EMC Corp., Misc. Dkt. No. 100 (Fed. Cir. May 4, 2012) (Dyk J.). The case arose within the context of mandamus relief sought by eight defendants joined in the same patent case in the Eastern District of Texas, after the district court barred those defendants from severing or transferring their claims. The defendants' petition for a writ of mandamus was filed before enactment of the new non-joinder provision under the Leahy-Smith America Invents Act, Pub. L. No. 112-29, sec. 19(d), ' 299, 125 Stat. 284 (2011) (to be codified at 35 U.S.C. ' 299) (“AIA”). For this reason, the Federal Circuit expressly warned that its decision on the defendants' writ was not an interpretation of the AIA. Nevertheless, the court's reasoning in the course of granting the defendants' writ suggests that the Federal Circuit may have been foreshadowing how it will interpret the AIA's new non-joinder provision when faced with the opportunity in the future to do so.

Factual History

The plaintiff, Oasis Research LLC (“Oasis”), brought an action in the Eastern District of Texas asserting infringement of four separate patents against 18 independent defendants. Slip Op. at 3. The patents are directed to methods for providing online services for backup, storage and processing of data and software for remote customers by a service provider over the Internet. (See, e.g., claim 9 of U.S. Patent No. 7,080,051). Each of the 18 defendants allegedly offers online backup and storage services, such as those disclosed within the asserted patents. Slip Op. at 3.

These 18 defendants moved to sever and transfer the claims against them on the grounds that “there was no concert of action” and the claims against them did not arise out of the “same transaction or occurrence,” as required by Rule 20 of the Federal Rules of Civil Procedure, which governs the permissive joinder of parties. Slip Op. at 4. Oasis acknowledged that the asserted “patents cover a broad range of technologies,” but insisted that joinder was proper because each defendant offers a “similar” online backup/storage service, which allegedly infringes the asserted patents. Slip Op. at 4.

The magistrate judge for the Eastern District of Texas agreed with the Oasis finding. Slip Op. at 4. The magistrate judge found that Rule 20's same-transaction-or-occurrence requirement was satisfied because the accused services were “not dramatically different.” Slip Op. at 4. The magistrate judge also found that common questions existed among the defendants with respect to the scope of the patents, the validity of the claims and claim construction. Slip Op. at 4. Finally, the magistrate judge suggested that severing the actions would be an inefficient use of judicial resources because it would divide “a single action into seven different lawsuits scattered across the country.” Slip Op. at 4.

The Federal Circuit's Decision

The Federal Circuit disagreed. The court noted that courts are guided by Rule 20 when deciding a motion under Rule 21, which governs severance. Slip Op. at 8. Rule 20 has two requirements. First, the asserted claims must arise out of the “same transaction, occurrence, or series of transactions or occurrences,” and second, there must be a “question of law or fact common to all defendants.” Slip Op. at 9. Based on these two requirements, the Federal Circuit acknowledged that independent actors, who do not act in concert, may nevertheless be properly joined under Rule 20. This is because Rule 20 contemplates joining claims arising from a “series of transactions or occurrences,” and thus, simply because “defendants are independent actors does not preclude joinder.” Slip Op. at 9. The court continued, “it follows that the mere fact that a case involves independent actors as defendants does not necessarily bring the case outside the scope of Rule 20.” Slip Op. at 11.

On the other hand, the Federal Circuit emphasized that Rule 20 still has two requirements ' “the transaction-or-occurrence requirement” and the “common question of law or fact” requirement. Slip Op. at 11. Independent parties cannot be properly joined simply because there is a common question of law or fact. Slip Op. at 11. In the context of patent cases, this means that joinder cannot be warranted just because each defendant is alleged to be infringing the same patent. Slip Op. at 11. That is because the requirement that the infringement allegations arise from the same transaction, occurrence or series of transactions or occurrences will still be lacking. Slip Op. at 11. The Federal Circuit stated that, even where common questions of law or fact may exist among the defendants, such as questions pertaining to patent validity and claim construction, allegations that each defendant is infringing the same patent cannot, by themselves, satisfy Rule 20. Slip Op. at 11.

The court pointed to decisions outside the Eastern District of Texas that demonstrated that the approach taken by the district court in Texas to joining parties in patent cases is in the minority. Slip Op. at 11 n.2. The court also pointed out that, under its jurisprudence, infringement claims against different parties for the same patent do not by themselves satisfy the same-transaction-or-occurrence requirements of Rule 13 (governing counterclaims and cross-claims) and Rule 14 (third-party practice). Slip Op. at 11-12.

In fact, the Federal Circuit recognized that both scholars as well as other courts have explained that Rule 13(a)'s transaction-or-occurrence test, which requires a “logical relationship” between the claims, is equally applicable to Rule 20. Slip Op. at 12-13. Based on this, the court adopted the “logical relationship test” for Rule 20. The court held, “independent defendants satisfy the transaction-or-occurrence test of Rule 20 when there is a logical relationship between the separate causes of action.” Slip Op. at 13. The Federal Circuit construed this to require that to join patent infringement defendants together, their acts of infringement must “share an aggregate of operative facts.” Slip Op. at 13 (emphasis in original).

Turning to the magistrate judge's holding, the court deemed the magistrate's finding that the accused services were “not dramatically different” to be inconsistent with Rule 20's requirement that the acts of infringement “share an aggregate of operative facts.” Slip Op. at 14. The Federal Circuit reasoned that the magistrate judge's standard would be satisfied as long as accused products or services were “similar,” which in effect requires little more than the allegation that each defendant is infringing the same patent. Slip Op. at 14. In such a case, the court stated, Rule 20 would “inevitably be satisfied.” Slip Op. at 14.

Thus, the Federal Circuit rejected the possibility that allegations of infringing the same patent, without more, can satisfy the requirements of joinder under the Federal Rules of Civil Procedure. The court did not, however, rule out the possibility that defendants with different products or services cannot be joined. Indeed, the court stated, “the sameness of the accused products or processes is not sufficient.” Slip Op. at 15. To satisfy the shared-aggregate-of-operative facts test, “accused products or processes [must be] the same in respects relevant to the patent.” Slip Op. at 16. For instance, different products may support joinder if they each source the same part, which is pertinent to infringement of the asserted patent. Slip Op. at 16. The court enumerated a number of other factual considerations that may be pertinent to satisfying the required logical relationship: “the alleged acts of infringement occurred during the same time period, the existence of some relationship among the defendants, the use of identically sourced components, licensing or technology agreements between the defendants, overlap of the products' or processes' development or manufacture, and whether the case involves a claim for lost profits.” Slip Op. at 16.

Viewing the Decision in Light of the AIA

The Federal Circuit's decision must be viewed in light of the recently passed AIA. EMC Corp. was not decided under the AIA because the petitioners' writ of mandamus was filed days before the AIA was signed into law. Slip Op. at 8. Because the non-joinder provision of the AIA is not retroactive, (AIA ' 19(e), 125 Stat. at 333.), the court held that its decision is only precedential to cases filed before passage of the new non-joinder provision. Slip Op. at 8.

In a footnote near the end of its opinion, the court expressly cautioned that “our approach to the new provision is not dictated by this case.” Slip Op. at 16 n.4. Recognizing that the AIA's new non-joinder provision expressly provides for “the same accused product or process,” the court stated, “[w]e need not decide whether the sameness test in the new legislation is identical to the sameness test we adopt here for cases not covered by the new legislation.” Slip Op. at 16 n.4.

The AIA provides that multiple defendants that are not sued jointly or severally can be properly joined only if the alleged acts of infringement “aris[e] out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process.” AIA, 125 Stat. 284, 332-33 (emphasis added). One interpretation of that provision could suggest that the AIA is more narrow than the court's ruling in EMC Corp. with respect to joining parties. Whereas EMC Corp. allows for joinder in some circumstances where the accused products or processes are not the same, the AIA expressly requires the “same accused product or process.”

Nevertheless, the Federal Circuit's ruling in EMC Corp. could foreshadow a gloss that the Federal Circuit intends to apply to its interpretation of the AIA. In particular, the court's holding EMC Corp. may specify more precisely what ' among a series of accused products ' must actually be the same for joinder to be warranted. As the court stated, on the one hand, “the sameness of the accused products or processes is not sufficient” for joining independent parties, but on the other hand, joinder is warranted where the “accused products or processes [are] the same in respects relevant to the patent.” That approach may likely mirror the court's interpretation of the AIA's new non-joinder provision when the Federal Circuit has the opportunity to address it.


Sergey Kolmykov is counsel at Locke Lord LLP specializing in patent litigation, licensing and prosecution. Zachary Silbersher is an associate at the firm specializing in patent litigation and patent prosecution.

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