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Fractus, S.A. v. AT&T Mobility LLC

United States District Court, E.D. Texas, Marshall Division

July 19, 2019

FRACTUS, S.A., Plaintiff,
v.
AT&T MOBILITY LLC, T-MOBILE US, INC., T-MOBILE USA, INC., VERIZON COMMUNICATIONS INC., CELLCO PARTNERSHIP D/B/A VERIZON WIRELESS, Defendants.

          MEMORANDUM OPINION AND ORDER

          RODNEY GILSTRAP, UNITED STATES DISTRICT JUDGE

         Before the Court is Intervenor-Defendant CommScope Technologies LLC's (“CommScope”) Motion to Sever Claims Against CommScope and Stay Related Claims Against Carrier Defendants (the “Motion”). (Dkt. No. 231.) By its Motion, CommScope seeks to sever and try together in “a single, separate action” the claims asserted against it by Fractus, S.A. (“Fractus”) in this group of consolidated cases, and to stay the remaining claims in the consolidated cases. (Dkt. No. 231, at 3.) Having considered the Motion and for the reasons set forth herein, the Court is of the opinion that the Motion should be and hereby is DENIED.

         I. Factual Background

         In April 2018, Fractus filed four separate suits against the four major domestic cellphone carriers-AT&T, [1] Sprint, [2] T-Mobile, [3] and Verizon[4] (collectively, the “Carrier Defendants”)- alleging that antennas deployed by the Carrier Defendants across their networks infringe several patents owned by Fractus. The antennas accused of infringement, in each case, are made by as many as seven different manufacturers. (Dkt. No. 231, at 1.) In August 2018, one of those manufacturers, CommScope, moved to intervene in each of these cases. (Dkt. No. 79.) Neither Fractus nor the Carrier Defendants opposed this intervention (id. at 5), which was granted by the Court (Dkt. No. 87). Shortly thereafter, another manufacturer, CellMax Technologies AB (“CellMax”) moved to intervene in three of the four cases.[5] (Dkt. No. 95.) No. party, including CommScope, opposed CellMax's intervention (id. at 4), which was likewise granted by the Court (Dkt. No. 104).

         After the intervention of CommScope and CellMax (collectively, the “Intervenor-Defendants”), Fractus amended its complaints in each case to assert claims for infringement against the Intervenor-Defendants directly. Fractus later narrowed its infringement contentions against the Intervenor-Defendants only to antennas sold to the four Carrier Defendants. (See Dkt. No. 217, at 2.)

         In March 2019, the Carrier Defendants filed a notice with the Court communicating their position that, in order to “substantially decrease the size and complexity of each trial and thus help ameliorate jury confusion, ” “the Court [should] conduct six trials: one each for the two intervenor-defendant manufacturers-CommScope and CellMax-addressing all claims as to each of their respective antennas, and separate trials for each of the four wireless carriers-AT&T, Sprint, T-Mobile, and Verizon-addressing claims as to accused antennas supplied by manufacturers that have not intervened.”[6] (Dkt. No. 214, at 1-2.) Consistent with this position, CommScope subsequently filed this Motion, seeking to sever the claims against it and stay the claims against the Carrier Defendants. (Dkt. No. 231, at 3.)

         Since the completion of briefing on this Motion, Fractus has settled all claims in the Sprint Case, and all claims in the AT&T Case except those against CommScope and CellMax. (Dkt. Nos. 287, 534.) Accordingly, three cases in this consolidated group remain pending: (1) the AT&T Case, in which claims against CommScope and CellMax remain pending as to CommScope and CellMax products; (2) the T-Mobile Case, in which claims against T-Mobile, CommScope, and CellMax remain pending as to CommScope and CellMax products and claims against T-Mobile remain pending as to the as to other manufacturers' products; (3) and the Verizon Case, in which claims against Verizon and CommScope remain pending as to CommScope products and claims against Verizon remain pending as to other manufacturers' products.

         II. Legal Standard

         Rule 21 of the Federal Rules of Civil Procedure allows the court to sever any claim against a party. Fed.R.Civ.P. 21. The district court has “broad discretion” when deciding whether to sever under Rule 21. In re EMC Corp., 677 F.3d 1351, 1355 (Fed. Cir. 2012).

         Generally speaking, Section 19(d) of the America Invents Act (“AIA”), codified as 35 U.S.C. § 299, provides that defendants accused of patent infringement may not involuntarily “be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, ” unless the alleged infringement arose out of the same “transaction, occurrence or series of transactions or occurrences relating to . . . the same accused product or process.” 35 U.S.C. § 299(a); Team Worldwide Corp. v. Wal-Mart Stores, Inc., 287 F.Supp.3d 651, 653 (E.D. Tex. 2018). “Misjoinder” under § 299 may be cured via Rule 21. Team Worldwide, 287 F.Supp.3d at 653.

         Additionally, severance of claims against a manufacturer from claims against that manufacturer's customers pursuant to Rule 21 is appropriate where “(1) the remaining claims are peripheral to the severed claims” and “(2) adjudication of the severed claims would potentially dispose of the remaining claims.” Cellular Commc'ns Equip., LLC v. Apple Inc., No. 6:14-cv-251, 2016 WL 6884648, at *1 (E.D. Tex. Aug. 26, 2016) (citing Shifferaw v. Emson USA, No. 2:09-cv-54, 2010 WL 1064380, at *1 (E.D. Tex. Mar. 18, 2010)); see also Saint Lawrence Commc'ns LLC v. Apple Inc., No. 2:16-cv-82-JRG, 2017 WL 3712912, at *2 (E.D. Tex. July 12, 2017). Regarding the first factor, “where a single manufacturer is the only entity in the U.S. who makes and sells the only accused products to the retailers, a patent infringement claim against a retailer is peripheral to the claims against the manufacturer.” Cellular Commc'ns, 2016 WL 6884648, at *2 (quoting Shifferaw, 2010 WL 1064380, at *3). As to the second factor, “the manufacturer's case need only have the potential to resolve ‘major issues' concerning the claims against the customer-not every issue-in order to justify a stay of customer suits.” Id. at *3 (quoting Spread Spectrum Screening LLC v. Eastman Kodak Co., 657 F.3d 1349, 1358 (Fed. Cir. 2011)).

         III. Discussion

         The Court finds that CommScope's requested severance is neither mandated by the AIA nor appropriate under Saint Lawrence. CommScope argues that “Fractus's decision to file complaints against CommScope and CommScope's customers puts these cases in line with this Court's St. Lawrence Communications jurisprudence. This is not a situation like Team Worldwide, where the intervenor was never sued as a defendant but nevertheless sought severance and a change in venue.” (Dkt. No. 231, at 1 (citations omitted).) The Court disagrees on both points. That Fractus asserted claims directly against CommScope after it intervened does not meaningfully differentiate this case from the Court's holding in Team Worldwide that intervenors do not enjoy § 299 protections.[7] Moreover, Fractus's claims against the Carrier Defendants are not merely peripheral to the claims against CommScope such that severance under Saint Lawrence is appropriate. Additionally, the Court finds that the relief requested by CommScope would not result in a just, speedy, and inexpensive resolution of the claims asserted in these cases. Therefore, CommScope's request to sever the claims against it and stay the claims against the Carrier Defendants should be and is denied.

         A. The AIA Does Not Mandate Severance of ...


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