Judge: Leonard Davis (Photo by Danny Hurley)
Holding: Motion for Separate Trials DENIED
Eighteen defendants remain in this case, in two groups, airline defendants and ticketing defendants. The defendants sought separate trials for each of the groups. Judge Davis denied the motion, but set out the reasons why, including both summaries of his prior rulings on similar issues in the last couple of years and a list of factors which he considers when determining whether separate trials are appropriate.
Consolidation and Bifurcation
Judge Davis begins by noting that in any complex litigation involving multiple parties and various common and individualized issues of fact, "a court’s greatest tools for maximizing efficiency are consolidation and bifurcation." But while generally, the Fifth Circuit has held that consolidation and bifurcation are within the sole discretion of the trial court, "a litigant’s Seventh Amendment right to “have only one jury pass on a common issue of fact” limits a court’s discretion to bifurcate. McDaniel v. Anheuser-Busch, Inc., 987 F.2d 298, 305 (5th Cir. 1993) (citing Gasoline Prods., Co. v. Champlin Ref. Co., 283 U.S. 494, 499-500 (1931)). “[T]he issue to be tried [separately] must be so distinct and separate from the others that a trial of it alone may be had without injustice.” Id. This rule also helps avoid inconsistent or competing jury findings on the same issue. Id.
The Court's Past Experience With Multiple Defendant Patent Cases
Judge Davis next notes that this is not his first day at this particular circus. "The Court has handled numerous multi-defendant patent cases over the last few years and has strived to balance the interests of all parties involved. The Court has fashioned various case specific types of relief, such as the use of early “mini-Markman” hearings in conjunction with limited discovery (see e.g. Parallel Networks, LLC v. Abercrombie & Fitch, et. al., 6:10cv111, Doc. No. 566), to promote judicial economy and to save the parties’ considerable sums of money in attorneys fees where an early resolution of the case appears appropriate and likely."
While Judge Davis notes that the vast majority of these multi-defendant cases resolve prior to trial, some do not, and when that is the case, he has again attempted to balance the interests of all parties to fashion a fair and equitable trial plan. His opinion provides the following instances:
- The CSIRO cases: five separate actions—unique in nature as “standards” cases—proceeded on a similar docket control order. Ultimately, the Court
consolidated four of the five cases into a single trial regarding all liability issues (infringement, invalidity, willfulness, and all other defenses). However, because Defendants occupied distinct portions of the marketplace, e.g. chip manufacturers and their customers, and also occupied distinct commercial spaces, the Court found it proper to bifurcate damages into separate trials. All parties settled prior to a final resolution.
- Fractus, S.A. v. Samsung Electronics, Co. Ltd., et. al.: included approximately ten defendant groups, but as the case moved toward trial, only six defendant groups remained. Given the extremely complex nature of the technology and the sheer number of patents and claims involved, the Court bifurcated the case into four trials beginning with validity and inequitable conduct, followed by, if necessary, three trials regarding infringement and damages (two defendant groups in each). As the case progressed, all but one defendant settled. Therefore, the need for separate trials dissolved and the parties proceeded to a single trial on all claims and defenses. The plaintiff prevailed.
- Bedrock Technologies, LLC v. Softlayer Technologies, Inc., et. al.: included approximately ten defendants. Given that Plaintiff’s damages model for Google far exceeded the damages model against the other defendants, the Court bifurcated the case into two trials, the first involving only Google, the second involving the remaining defendants. Google proceeded to trial in the first phase. The only remaining defendant, Yahoo!, proceeded to trial in the second phase. Plaintiff prevailed in the first phase, while Defendant prevailed in the second phase.
- Eolas Techologies, Inc. v. Adobe Systems Inc., et. al.: included approximately twenty-three defendants, nine remained at trial. Plaintiff agreed to a single invalidity trial including all defendants followed by three separate infringement and damages trials, if necessary. The three separate infringement trials involved different numbers of remaining defendants. The defendants prevailed in the invalidity trial, therefore, separate infringement trials were not necessary.
Factors To Be Considered
Judge Davis then provided a list of thirteen factors he considers in determining the proper trial procedure for an individual case. "While no single factor is dispositive," he writes, "the following factors are considered in balancing the equities to all parties involved:
(1) number of defendants;
(2) number of patents;
(3) number of asserted claims;
(4) complexity of the technology involved;
(5) similarity of functionality of accused instrumentalities;
(6) consistency of plaintiff’s damages model against distinct defendants, e.g., single expert report as to all defendants, how distinct is the theory of infringement and damages in the expert report as to individual defendants, etc.;
(7) consistency of defendants’ non-infringement, validity, and damages positions, as exemplified by, among other things, expert reports, e.g., single or multiple experts on non-infringement; single or multiple experts on validity, single or multiple experts on damages, etc.;
(8) collaboration by defendants, e.g. joint defense groups, one firm representing multiple defendants, etc.;
(9) risk of inconsistent results on common issues of fact or law;
(10) risk of jury confusion;
(11) cost of multiple trials to the parties;
(12) the Court’s schedule and resources;
(13) other individualized issues specific to a particular case.
Analysis of the Factors in the CEATS case
The Court concluded that in this case, the balance of the factors favored a single trial. While there are eighteen Defendants remaining in this case, there were only twelve accused systems, and most Defendants agreed that they generally fall into two categories: airline defendants and ticketing defendants. Further, the accused websites were generally similar and any differences in their functionality may be communicated to the jury in relatively quick and simple terms. Thus Judge Davis concluded that presenting a unified case with two general groups of defendants with similar technology should not be so overwhelming as to confuse a single jury. In addition, CEATS is only asserting seven claims and "based on the Court’s review, the technology itself was not exceedingly complicated. Plaintiff has a consistent infringement and damages model regarding all Defendants. Likewise, Defendants are collectively using a single expert as to each of the issues of non-infringement, invalidity, and damages. In other words, by conducting a single trial, the cost of experts will be collectively shared. Also, by trying validity to a single jury, there is no risk of inconsistent results by separate juries."
But that finding dids not extend to the issue of willfulness, which was bifurcated. "[W]hile all Defendants are accused of willfulness," he noted, some are not alleged to have presuit knowledge of the patents-in-suit. Therefore, the Court finds that it is proper to bifurcate willfulness in this case. Therefore, the Court will first try the issues of infringement, validity, and damages as to all Defendants and patents in this case. The Court will then, if necessary, conduct a second phase on the issue willfulness to the same jury."