Case 1:11-cv-00797-RGA Document 94-9 Filed 12/19/11 Page 1 of 5 PageID #: 595
`Case 1:11—cv-00797-RGA Document 94-9
`Filed 12/19/11 Page 1 of 5 Page|D #: 595
`
`TAB 9
`
`TAB 9
`
`

`
`Case 1:11-cv-00797-RGA Document 94-9 Filed 12/19/11 Page 2 of 5 PageID #: 596
`
`Slip Copy, 2010 WL 3895047 (N.D.Cal.)
`(Cite as: 2010 WL 3895047 (N.D.Cal.))
`
`Only the Westlaw citation is currently available.
`
`This decision was reviewed by West editorial staff
`and not assigned editorial enhancements.
`
`United States District Court,
`N.D. California.
`WIAV NETWORKS, LLC, Plaintiff,
`v.
`3COM CORPORATION, et al., Defendants.
`
`No. C 10-03448 WHA.
`Oct. 1, 2010.
`
`David W. Hansen, Edward V. Filardi, Michael David
`Saunders, Skadden Arps Slate Meagher & Flom,
`LLP, Palo Alto, CA, David Jack Levy, Clay Erik
`Hawes, Morgan, Lewis & Bockius LLP, Houston,
`TX, Daniel A. Devito, Skadden Arps Slate Meagher
`& Flom LLP, New York, NY, Raoul Dion Kennedy.
`Skadden Arps Slate Meagher & Flom LLP, San
`Francisco, CA, for Defendants.
`
`ORDER DISMISSING ALL REMAINING DE-
`FENDANTS EXCEPT HEWLETT-PACKARD
`COMPANY FOR MISJOINDER UNDER FRCP
`21
`WILLIAM ALSUP, District Judge.
`*1 Plaintiff WiAV Networks, LLC was ordered
`to show cause why all but the first named defendant
`in this sprawling patent-infringement action against
`68 different companies should not be dismissed for
`misjoinder under FRCP 21 (Dkt. No. 486). As noted
`in that order, plaintiff filed this action in the United
`States District Court for the Eastern District of Texas.
`The complaint named well over five dozen corporate
`defendants across the United States, Canada, Japan,
`China, Taiwan, Belgium, Finland, and Sweden, ac-
`cusing each of willfully and deliberately infringing
`two United States Patents (Dkt. No. 1). The action
`was eventually transferred here and was assigned to
`the undersigned judge on August 30.
`
`Of the 68 corporate defendants originally named
`in this action, plaintiff has already dismissed 28 of
`
`Page 1
`
`them (either voluntarily or pursuant to stipulation).
`FN1 Of the 40 that remain, the vast majority-as the
`order to show cause observed-are wholly unrelated
`companies with wholly unrelated products. Signifi-
`cantly, neither the original defendants nor the remain-
`ing defendants were alleged to have acted in concert
`to infringe any of plaintiff's asserted patents. Indeed,
`many of the remaining defendants are direct competi-
`tors of each other. They share no common transaction
`or occurrance.
`
`FN1. Among these 28 dismissed defendants
`is the first-named defendant, 3Com Corpora-
`tion, which was dismissed pursuant to stipu-
`lation on September 28 due to its merger
`with defendant Hewlett-Packard Company.
`Plaintiff has requested that Hewlett-Packard
`Company be retained as a defendant if mis-
`joinder is declared.
`
`Perhaps recognizing these weaknesses in its po-
`sition, in its response to the August 31 order to show
`cause, plaintiff proposed to voluntarily dismiss with-
`out prejudice all but twelve remaining defendants.
`These twelve defendants, organized by plaintiff into
`seven “groups” of related entities, stand accused of
`infringement based on their portable computing
`products (Dkt. No. 541 at 2). These defendants,
`deemed the “Laptop Defendants” by plaintiff, are (1)
`Acer Inc., Acer America Corporation, and Gateway,
`Inc.; (2) Asus Computer International and Asustek
`Computer, Inc.; (3) Dell Inc.; (4) Fujitsu America,
`Inc. and Fujitsu Ltd.; (5) General Dynamics Itronix
`Corporation; (6) Hewlett-Packard Company; and (7)
`Panasonic Corporation and Panasonic Corporation of
`North America. Plaintiff contends that keeping these
`“Laptop Defendants” in this action is proper because
`the claims against them are “logically connected”
`such that joinder would preserve supposed efficien-
`cies and benefits.
`
`As set forth in FRCP 20(a)(2), multiple defen-
`dants may be joined together in one action if “(A)
`any right to relief is asserted against them jointly,
`severally, or in the alternative with respect to or aris-
`ing out of the same transaction, occurrence, or series
`of transactions or occurrences; and (B) any question
`of law or fact common to all defendants will arise in
`
`© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`Case 1:11-cv-00797-RGA Document 94-9 Filed 12/19/11 Page 3 of 5 PageID #: 597
`Page 2
`
`Slip Copy, 2010 WL 3895047 (N.D.Cal.)
`(Cite as: 2010 WL 3895047 (N.D.Cal.))
`
`the action.” In situations of misjoinder and nonjoin-
`der of parties, FRCP 21 provides that “[o]n motion or
`on its own, the court may at any time, on just terms,
`add or drop a party.”
`
`“The Ninth Circuit has interpreted the phrase
`‘same transaction, occurrence, or series of transac-
`tions or occurrences' to require a degree of factual
`commonality underlying the claims.” Bravado Int'l
`Group Merchandising Servs. v. Cha, 2010 WL
`2650432, at *4 (C.D.Cal. June 30, 2010) (citing
`Coughlin v. Rogers, 130 F.3d 1348, 1350 (9th
`Cir.1997)). Typically, this means that a party “must
`assert rights ... that arise from related activities-a
`transaction or an occurrence or a series thereof.” Ibid.
`(citation omitted). As stated, plaintiff has not alleged
`that the named defendants in this action have en-
`gaged in related activities or have otherwise acted in
`concert.
`
`*2 As such, even if this litigation were pared
`down to just the “Laptop Defendants,” proof of in-
`fringement would necessarily require proof of facts
`specific to each individual defendant and to each ac-
`cused product. The mere fact that twelve defendants
`all manufacture, sell, or distribute their own laptop
`computers does nothing to obviate the bone-crushing
`burden of individualized methods of proof unique to
`each product. Again, there is no conspiracy claim.
`There is no claim that any defendant induced another
`to infringe. Each defendant has simply been thrown
`into a mass pit with others to suit plaintiff's conven-
`ience.
`
`In this connection, the accused defendants-who
`will surely have competing interests and strategies-
`are also entitled to present individualized assaults on
`questions of non-infringement, invalidity, and claim
`construction. Cf. Nasalok Coating Corp. v. Nylok
`Corp., 522 F.3d 1320, 1326 (Fed.Cir.2008) ( “[W]e
`have explicitly held that a determination of patent
`infringement in an infringement suit, or even an ex-
`plicit determination of patent validity, does not pre-
`clude the assertion of an invalidity defense in a sec-
`ond action involving different products.”); Texas
`Instruments, Inc. v. Linear Techs. Corp., 182
`F.Supp.2d 580, 586 (E.D.Tex.2002) (recognizing that
`“defendants in a later proceeding involving previ-
`ously construed patents should have the opportunity
`to brief and argue the issue of claim construction,
`notwithstanding any policy in favor of judicial uni-
`
`formity”).
`
`Plaintiff's best argument that the “Laptop Defen-
`dants” are “logically connected” is that each of these
`defendants sells products that implement the IEEE
`802.11 wireless protocol. The United States Court of
`Appeals for the Federal Circuit recently weighed in
`on theories of “infringement by compliance with an
`industry standard” in Fujitsu Ltd. v. Netgear, 620
`F.3d 1321, ----, 2010 WL 3619797, at *4 (Fed.Cir.
`Sept.20, 2010). In Fujitsu, the Federal Circuit recog-
`nized that mere compliance with an industry protocol
`does not necessarily establish that all compliant de-
`vices implement the protocol in the same way. Dif-
`ferent accused devices may achieve compliance with
`an industry standard or protocol through varying de-
`signs, with different tolerances, and with competing
`features. Additionally, the Fujitsu decision observed
`that an asserted patent claim-properly construed-
`might not cover all implementations of an industry
`standard. In such situations, the Federal Circuit em-
`phasized that infringement would have to be proven
`on a product-by-product basis.
`
`In the instant case, defendants are unrelated and
`compete with each other through their accused prod-
`ucts. Even if each of the accused devices is compliant
`with the IEEE 802.11 wireless protocol, it is far from
`a foregone conclusion that the asserted claims in
`WiAV's patents will cover all implementations of the
`protocol. WiAV makes no such assertion. Indeed, at
`the case management conference, counsel for WiAV
`acknowledged that even among the “Laptop Defen-
`dants,” there would be “slight differences in hard-
`ware and software components” involved. Addition-
`ally, the patents themselves make no mention of the
`802.11 wireless protocol, the complaint is silent on
`the 802.11 wireless protocol, and no showing has
`been made that practicing the asserted patents is es-
`sential to complying with the protocol in all in-
`stances. As emphasized by the Federal Circuit in Fu-
`jitsu, only in situations where a properly construed
`patent covers all required elements of an industry
`standard will it be enough to prove infringement by
`showing compliance with the standard. See Fujitsu,
`2010 WL 3619797, at *4. This has not been estab-
`lished here. Plaintiff must prove that each accused
`product infringes, and each such endeavor will be
`worthy of its own trial.
`
`*3 All in all, plaintiff cannot escape the fact that
`
`© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`Case 1:11-cv-00797-RGA Document 94-9 Filed 12/19/11 Page 4 of 5 PageID #: 598
`Page 3
`
`Slip Copy, 2010 WL 3895047 (N.D.Cal.)
`(Cite as: 2010 WL 3895047 (N.D.Cal.))
`
`it is suing unrelated and competing defendants for
`their own independent acts of patent infringement. In
`such situations, numerous courts have found that
`“joinder is often improper where [multiple] compet-
`ing businesses have allegedly infringed the same pat-
`ent by selling different products.” Spread Spectrum
`Screening, LLC v. Eastman Kodak Co., 2010 WL
`3516106, at *2 (N.D.Ill. Sept.1, 2010); see also
`Philips Elecs. N. Am. Corp. v. Contec Corp., 220
`F.R.D. 415, 417 (D.Del.2004) ( “Allegations of in-
`fringement against two unrelated parties based on
`different acts do not arise from the same transac-
`tion.”); Androphy v. Smith & Nephew, Inc., 31
`F.Supp.2d 620, 623 (N.D.Ill.1998) (holding that the
`joinder of three manufacturers in a patent infringe-
`ment suit was improper because the claims did not
`arise from a common transaction or occurrence when
`the manufacturers were separate companies that in-
`dependently designed, manufactured, and sold differ-
`ent products); New Jersey Mach. Inc. v. Alford In-
`dus., Inc., 1991 WL 340196, at *2 (D.N.J. Oct.7,
`1991) (holding in a patent infringement suit that
`“claims of infringement against unrelated defendants,
`involving different machines, should be tried sepa-
`rately against each defendant”).
`
`None of the decisions cited by plaintiff compels
`a different conclusion. Indeed, each decision cited by
`plaintiff avoids the question of how the infringing
`conduct of different defendants with different prod-
`ucts, acting separately, can involve or arise out of
`“the same transaction, occurrence, or series of trans-
`actions or occurrences[,]” which FRCP 20(a)(2)
`states is a precondition for the permissive joinder of
`defendants.
`
`The answer-as explained herein-is that they do
`not. The infringement issues will vary from product
`to product as they will invariably contain different
`components, from different manufacturers, with dif-
`ferent specifications, that work in different ways.FN2
`Additionally, the damages issues, wilfulness issues,
`time frames and accused conduct, and discovery is-
`sues will obviously vary from company to company.
`Finally, while a defense of inequitable conduct will
`no doubt arise as a common defense for most if not
`all defendants, FRCP 20(a)(2)(A) does not encom-
`pass defenses asserted against a plaintiff. Rather, only
`a “right to relief” asserted by the plaintiff can satisfy
`the requirements for joining defendants under FRCP
`20(a)(2)(A).
`
`FN2. There is no allegation in the complaint
`that all “Laptop Defendants” and accused
`products share identical wireless chipsets or
`components from a central manufacturer. At
`best, plaintiffs argue in their brief that “the
`accused products share a significant overlap
`in their wireless chipsets, which are pre-
`dominantly supplied by a limited number of
`third parties, such as Atheros Communica-
`tions, Inc., Broadcom Corp., Intel Corp., and
`Marvell Semiconductor, Inc.” (Br.5). These
`differences among chipsets cut against any
`assertion by plaintiff that the products are
`“identical” for purposes of proving in-
`fringement.
`
`Of course, it is possible that the same patent
`claim (of the 34 in the patents in suit) may eventually
`be asserted against two or more defendants. In that
`instance, some claim construction issues will overlap.
`That said, while it would be nice to have an identical
`set of elaborations on the asserted claims for each
`accused product, even that is not practical, for the
`differences in the products themselves will provoke
`differences in which words and slants in the claim
`language really matter. These differences will lead a
`defendant in one case to focus entirely upon the
`meaning of certain words or phrases in a claim and a
`defendant in another case to focus entirely on differ-
`ent words or phrases even though they are in the
`same claim. In other words, the claim-construction
`work will not be the same for all defendants, even
`those facing trial on the same patent claim. The
`claim-construction work must be adapted to the ac-
`tual issues being litigated over the varying accused
`devices.FN3 In short, whatever common issues may
`exist from device to device will be overwhelmed by
`the individual issues of claim construction, damages,
`wilfulness, and discovery supervision.
`
`FN3. Compounding the problem is the fact
`that the two asserted patents contain 34
`claims. While counsel for plaintiff repre-
`sented at the case management conference
`that only “around ten” claims would actually
`be litigated, various combinations of these
`claims could nevertheless be asserted
`against different defendants and their ac-
`cused products,
`thereby guaranteeing a
`monumental mess.
`
`© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`

`
`Case 1:11-cv-00797-RGA Document 94-9 Filed 12/19/11 Page 5 of 5 PageID #: 599
`Page 4
`
`Slip Copy, 2010 WL 3895047 (N.D.Cal.)
`(Cite as: 2010 WL 3895047 (N.D.Cal.))
`
`*4 Given the disparity in defendants, accused
`products, and other disparate issues discussed herein
`like damages, wilfulness, and discovery supervision,
`it is worth adding that the allegations against each
`remaining defendant would not be related under our
`civil local rules even if brought here as separate ac-
`tions. See Civil L.R. 3-12(a)(2). If, however, the ac-
`tions are re-filed in this district, the undersigned
`judge would be willing to coordinate certain claim
`construction issues (and those issues only) if the par-
`ties so stipulate, the assigned judge(s) consent, and
`the parties make a showing that the same phrases in
`the same claims require interpretation.
`
`For the foregoing reasons, pursuant to a finding
`of misjoinder under FRCP 21, all remaining defen-
`dants except Hewlett-Packard Company are DIS-
`MISSED. The request by counsel to force any re-
`filings to be made in this district is DENIED. There
`is insufficient justification to do so even if authority
`existed to impose such a requirement. This, however,
`is without prejudice in the event of re-filings else-
`where to a motion to transfer the actions here.
`
`IT IS SO ORDERED.
`
`N.D.Cal.,2010.
`WiAV Networks, LLC v. 3Com Corp.
`Slip Copy, 2010 WL 3895047 (N.D.Cal.)
`
`END OF DOCUMENT
`
`© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.