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Imperium (IP) Holdings (ED Tex Jan 20, 2012)

Imperium (IP) Holdings (ED Tex Jan 20, 2012)

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Published by: dsb001 on Jan 24, 2012
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United States District Court
EASTERN DISTRICT OF TEXASSHERMAN DIVISION
IMPERIUM (IP) HOLDINGS, INC. §§§v.§Case No. 4:11-CV-163§ Judge Schneider/Judge Mazzant§APPLE INC., ET. AL.§
REPORT AND RECOMMENDATIONOF UNITED STATES MAGISTRATE JUDGE
Pending before the Court is Defendant Apple Inc.’s Motion to Sever Pursuant to Rules 20and 21 and to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) (Dkt. #103). Having considered therelevant pleadings, the Court is of the opinion that Defendant’s motion should be denied.
I. BACKGROUND
In its Complaint, Plaintiff Imperium (IP) Holdings, Inc. (“Plaintiff” or “IIPH”) accuses eightDefendants of infringing two or more of the following patents: U.S. Patent No. 6,271,884, U.S.Patent No. 6,838,651, U.S. Patent No. 6,838,715, U.S. Patent No. 7, 064,768, and U.S. Patent No.7,109,535. C
OMPL
. (Dkt. #1) at 5-10. Plaintiff asserts that Defendant Apple Inc. (“Apple”) infringedall the patents-in-suit by “manufacturing, using, selling, offering for sale, and/or importing cell phones and/or other devices with image sensors, including, but not limited to, the iPhone 3G cell phone, throughout the United States, including in this judicial district.”
 Id 
. Plaintiff alleges all other Defendants infringed two or more of the patents-in-suit also by “manufacturing, using, selling,offering for sale, and/or importing cell phones and/or other devices with image sensors...”
 Id 
.On October 5, 2011, Apple filed its Motion to Sever Pursuant to Rules 20 and 21 and toTransfer Venue pursuant to 28 U.S.C. §1404(a) (Dkt. #103). On November 10, 2011, Plaintiff filed
 
its Response in opposition to Apple’s motion (Dkt. #112). Apple filed its Reply on November 29,2011 (Dkt. #116). On December 9, 2011, Plaintiff filed its Sur-Reply (Dkt. #117).
II. ANALYSIS
Generally, Apple requests severance under Federal Rules of Civil Procedure 20 and 21 because Plaintiff improperly joined Apple in this case. Apple asserts that the other Defendants inthis case are unrelated to Apple, and are, in fact, competitors of Apple. M
OTION
(Dkt. #103) at 1.Apple contends that because Plaintiff accuses each Defendant separately and independently of infringing Plaintiff’s patents, Plaintiff has not shown that the allegedly infringing systems arise from“the same transaction, occurrence, or series of transactions or occurrences.”
See
F
ED
.
 
R.
 
C
IV
.
 
P.20(a)(2)(A). Apple further contends that Plaintiff has not pleaded any connection between Appleand the other Defendants or between Apple’s iPhone 3G and the other Defendants’ products.M
OTION
at 7. Apple asks the Court to sever Plaintiff’s claims against Apple, and in addition, asksthe Court, pursuant to 28 U.S.C. § 1404(a), to transfer venue of Plaintiff’s claims against Apple tothe Northern District of California.
A. Joinder and Motions to Sever
“On motion or on its own, the court may at any time, on just terms, add or drop a party.”F
ED
.
 
R.
 
C
IV
.
 
P. 21. “[A] trial court has broad discretion to sever.”
 Anderson v. Red River WaterwayComm’n
, 231 F.3d 211, 214 (5th Cir. 2000). Courts in the Fifth Circuit look to Rule 20 to determineif parties have been misjoined and should thus be severed under Rule 21.
 Acevedo v. Allsup’sConvenience Stores, Inc.
, 600 F.3d 516, 521 (5th Cir. 2010). Rule 20(a)(2) states:2
 
Persons...may be joined in one action as defendants if:(A) any right to relief is asserted against them jointly, severally, or in the alternativewith respect to or arising 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 the action.Fed. R. Civ. P. 20(a)(2). Courts have described Rule 20 as creating a two-prong test, allowing joinder of the defendants when (1) their claims arise out of the “same transaction, occurrence, or series of transactions or occurrences” and (2) there is at least one common question of law or factlinking all the claims.
See
 
 Acevedo
, 600 F.3d at 521. “Under the Rules, the impulse is towardsentertaining the broadest possible scope of action consistent with fairness of the parties; joinder of claims, parties and remedies is strongly encouraged.”
United Mine Workers of America v. Gibbs
,383 U.S. 715, 724 (1966).
1) Same Transaction or Occurrence
Generally, Apple argues that it is improperly joined in this action because the sale of allegedly infringing products by unrelated companies does not satisfy the “same transaction or occurrence” requirement. Apple asserts that Plaintiff failed to allege that any Defendant is relatedto another Defendant in this case, nor does Plaintiff seek joint or several relief from the Defendants.M
OTION
at 3. Apple argues that proof of infringement against each Defendant will require proof of facts specific to each individual Defendant, to each accused product, and to each asserted patentclaim. M
OTION
at 10.Courts in this District have consistently held that transactions or occurrences satisfy the seriesof transactions or occurrences requirement of Rule 20(a) if there is some connection or logicalrelationship between the various transactions or occurrences.
 Microunity Systems Engineering, Inc.v. Acer Inc.
, No. 2:10-CV-91, 2011 WL 4591917, at *3 (E.D. Tex. Sept. 30, 2011) (citing
 Hanley
3

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