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Pipeline Technologies Incorporated v. Telog Instruments Incorporated

United States District Court, D. Arizona

October 15, 2014

Pipeline Technologies Incorporated, Plaintiff,
v.
Telog Instruments Incorporated, et al., Defendants.

ORDER

STEVEN P. LOGAN, District Judge.

Before the Court is a patent infringement action filed by Plaintiff Pipeline Technologies Incorporated. For the reasons that follow, the Court will sever and stay this action as to Defendant Applied Products Group, LLC, and transfer this action as to Defendant Telog Instruments Incorporated to the United States District Court for the Western District of New York.

I. Background

In 2007 and 2008, Plaintiff Pipeline Technologies Incorporated, doing business as Pipetech International, secured two patents through the United States Patent and Trademark Office: (1) Patent No. 7, 219, 553 ("553"), and (2) Patent No. 7, 357, 034 ("034"). (Doc. 1 at ¶¶ 9, 18.) Patents 553 and 034 are collectively described as a "dynamic transient pressure detection system for detecting and recording variations in pressure inside operating fluid chambers." (Doc. 1 at 13, 17, 22, 26.) In short, at issue is a sensor device which can be installed into a utility pipeline that detects changes in pressure, such as one caused by a sudden increase in gas, sewage, or water, and remotely records and reports that data by signal to a receiver.

Plaintiff commenced the instant action against Defendants Telog Instruments Incorporated ("Telog") and Applied Products Group, LLC ("APG"), arising from the manufacture and sale of Telog's devices referred to as "Telog LPR-3li" and "Telog HPR-3li." (Doc. 1 at 4.) In the first count of its Complaint, Plaintiff alleges that Telog and APG have infringed the 553 patent. (Doc. 1 at ¶ 10.) In the second, Plaintiff alleges that Telog has also infringed the 034 patent. (Doc. 1 at ¶ 19.)

Following the submission of a settlement report (Doc. 94), [1] the Court called the parties to address the propriety of joinder and venue. In response, Defendants have moved to sever the claims, arguing APG is merely a "peripheral defendant" and that the claims alleged by Plaintiff against it are simply to establish venue in this district. (Doc. 101 at 15-17; Doc. 101-1 at 17-20.) Defendants further move to transfer the claims against Telog to the Western District of New York, and to stay the claims in this district against APG pending the resolution of the claims against Telog.

II. Discussion

A. Joinder, Severance, and Stay

In patent actions, joinder is governed by the Leahy-Smith America Invents Act ("AIA"), [2] which provides:

(a) Joinder of accused infringers.-With respect to any civil action arising under any Act of Congress relating to patents... parties that are accused infringers may be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial... only if-
(1) any right to relief is asserted against the parties jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process; and
(2) questions of fact common to all defendants or counterclaim defendants will arise in the action.
(b) Allegations Insufficient for Joinder.-For purposes of this subsection, accused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit.

35 U.S.C. § 299. Thus, "[t]he mere fact that infringement of the same claims of the same patent is alleged does not support joinder, even though the claims would raise common questions of claim construction and patent invalidity." In re EMC Corp., 677 F.3d at 1357.[3] Rather, there must be "substantial evidentiary overlap in the facts giving rise to the cause of action against each defendant. In other words, the defendants' allegedly infringing acts, which give rise to the individual claims of infringement, must share an aggregate of operative facts, " id. at 1358, ...


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