Federal Circuit Misapplies Rule 19 Involuntary Joinder Requirement in Patent Cases
Suffern, N.Y. – July 17, 2018 − Advanced Video Technologies LLC (AVT), a subsidiary of General Patent Corporation (GPC), announced today that it filed a petition for a writ of certiorari to the Supreme Court of the United States, asking the Court to review a Federal Circuit Court of Appeals decision with far-reaching implications for intellectual property rights in the United States.
AVT commenced the action by filing lawsuits in the Southern District of New York (Nos. 1:15-cv-04626-CM, 1:15-cv-04631-CM, and 1:15-cv-04632-CM) alleging that HTC, Motorola Mobility, and BlackBerry infringed its patent on a full-duplex video chip used in the defendants’ smartphones. The district court found that AVT owned a two-thirds interest in the asserted patent, with the remaining third belonging to a co-inventor, Vivian Hsiun, a disgruntled former employee of the AVT’s predecessor in interest who refused to assign the patent as was required by the terms of her employment agreement. Ms. Hsiun refused to join the suit as a co-plaintiff, and AVT was precluded from involuntarily joining her as a necessary party due to Federal Circuit precedent excluding patent infringement actions from the involuntary joinder provisions of Rule 19 of the Federal Rules of Civil Procedure (the “FRCP”). As a result, the district court dismissed the case for lack of prudential standing, and AVT was left with no recourse.
On appeal to the Federal Circuit, in a split decision, the panel affirmed the District Court’s decision. In addition to a sharp dissent by Judge Newman, arguing that the district court erred in finding that Ms. Hsiun maintained co-ownership of the patent, Judge O’Malley wrote a concurrence urging her colleagues to reverse the court’s precedent and allow involuntary joinder, as per Rule 19.
“This case is crucial to the future of invention, innovation, and entrepreneurship in our country,” said Dr. Alexander Poltorak, founder and CEO of General Patent Corporation. “Patents are the currency of the knowledge-based economy,” he continued. “Most innovation today is a collaborative effort, resulting in patents issued to multiple inventors. Patent-holders must be able to enforce their rights in court and cannot be allowed to be stymied by a non-cooperative co-owner,” Dr. Poltorak concluded.
“Rule 19 of the Federal Rules of Civil Procedure provides that where a necessary party to a lawsuit has not been joined, ‘the court must order that the person be made a party,’ said Michael Shanahan, General Counsel of AVT. “The Court of Appeals for the Federal Circuit ruled that involuntary joinder under Rule 19 somehow does not apply to patent cases,” he explained. “We believe this is incorrect, and that the involuntary joinder provided by Rule 19 applies to all civil cases equally, including patent cases.”
Judge O’Malley wrote in her concurring opinion that the Federal Circuit’s “conclusion that a non-consenting co-owner or co-inventor can never be involuntarily joined in an infringement action pursuant to Rule 19 of the Federal Rules of Civil Procedure is incorrect.” She further noted that “[t]his precedent represents a ‘further removal’ of patent cases from ‘the mainstream of the law.’”
Robert Morris, a partner at Eckert Seamans Cherin & Mellott, LLC and AVT’s lead counsel, stated: “The majority opinion continues a long trend, in which the Federal Circuit disregards binding statutes and Supreme Court precedent, on the grounds that these laws and precedents do not apply to patent law.”
Parties interested in submitting amicus curiae briefs in support of AVT’s petition should contact Michael Shanahan at (646) 286-9286 or MShanahan@GeneralPatent.com.
About Advanced Video Technologies LLC
Advanced Video Technologies LLC owns U.S. Patent No. 5,781,788 for “Full Duplex Single Chip Video Codec” (now expired). AVT is a subsidiary of and is managed by General Patent Corporation. For more information about Advanced Video Technologies LLC visit www.advancedvidtech.com.
About General Patent Corporation
General Patent Corporation, headquartered in Suffern, N.Y., is a leading intellectual property boutique focusing on patent licensing and enforcement. GPC is the oldest patent enforcement firm in the U.S., representing inventors, businesses, universities and other patent owners in patent enforcement and assertive licensing matters on a contingency basis. GPC is the managing member of Advanced Video Technologies LLC. For more information, visit www.generalpatent.com.