United States District Court, D. Delaware
GREGORY M. SLEET, District Judge.
Before the court are four patent infringement cases filed by plaintiff Rothschild Mobile Imaging Innovations, LLC ("RMII") alleging direct, indirect, and willful infringement of U.S. Patent Nos. 7, 450, 163; 7, 995, 118; 7, 456, 872; and 7, 991, 792 ("patents-in-suit") against multiple defendants. (C.A. No. 14-617-GMS; C.A. No. 14-1142-GMS; C.A. No. 14-1143-GMS; C.A. No. 14-1144-GMS.) In all four cases, RMII has sued Mitek Systems, Inc. ("Mitek"). Additionally, in each of the four cases, RMII has named one of the four largest banks in the nation- JPMorgan Chase & Co., JPMorgan Chase Bank, N.A. (collectively, "Chase"), Bank of America Corp., Bank of America N.A. (collectively, "Bank of America"), Citigroup, Inc., Citibank N.A. (collectively, "Citi"), and Wells Fargo & Co., Wells Fargo Bank N.A. (collectively, "Wells Fargo") (collectively, the "Bank" defendants)-as a co-defendant. Numerous motions have been filed in all four cases and the court presently addresses: (1) whether to sever the infringement claims against the Bank defendants from the infringement claims against Mitek; (2) if the claims are severed, whether to stay the infringement claims against the Bank defendants until resolution of RMII's infringement claims against Mitek; and (3) if the claims are severed and stayed, whether to transfer RMII's infringement claims against Mitek to the Southern District of California. For the reasons that follow, the court will sever the claims against the Bank defendants and stay the infringement claims against the Bank defendants until RMII's infringement claims against Mitek are resolved. The court denies Mitek's motion to transfer the remaining portions of the case to the Southern District of California. The court's reasoning follows.
RMII is a limited liability company having a principal office in Bay Harbor Islands, Florida. (D.I. 7, ¶ 1.) RMII is a patent holding company created by Leigh Rothschild. (D.I. 28, Ex. 1.) Mr. Rothschild is the named inventor of the patents-in-suit. (D.I. 7, Exs. A, B, C, D.)
Mitek is a Delaware corporation with its principle place of business in San Diego, California. (D.I. 7, ¶ 2.) Mitek markets itself as a company with patented mobile photo technology that can extract" relevant data from captured images of personal and financial documents. (D.I. 28, Ex. 3.) Mitek licenses this technology to thousands of financial institutions. (Id.)
In the summer of 2014, RMII initiated this litigation against Chase and Mitek. (D.I. 7.) On September 8, 2014, RMII filed three additional cases alleging infringement of the patens-in-suit. RMII first sued Bank of America and Mitek. (C.A. No. 14-1142-GMS (the "1142 Action"), D.I. 1.) Next, RMII sued Citi and Mitek. (C.A. No. 14-1143-GMS (the "1143 Action"), D.I. 1.) And third, RMII sued Wells Fargo and Mitek. (C.A. No. 14-1144-GMS (the "1144 Action"), D.I. 1.)
The allegations in RMII's four infringement cases are essentially identical. The accused products in each are Mitek's mobile imaging products and services and the Banks' respective mobile banking application. RMII accuses the following Mitek products of infringing the patents-in-suit: "Mobile Deposit, " "Mobile Photo Bill Pay, " "Mobile Photo Account Opening, " "Mobile Photo Payments, " "Mobile Photo Balance Transfer, " "Mobile Photo Account Funding, " "Mobile Insurance Quote, " and "Mobile Imaging Platform" (collectively, "Mitek's Mobile Imaging Instrumentalities"). (C.A. No. 14-617-GMS, D.I. 7, ¶ 12; 1142 Action, D.I. 1, ¶ 12; 1143 Action, D.I. 1, ¶ 12; 1144 Action, D.I. 1, ¶12.) Additionally, RMII accuses the Bank defendants of infringement through the use of their respective mobile banking application: "Chase Mobile, " "Bank of America-Mobile Banking, " "Citi Mobile, " and "Wells Fargo Mobile" (collectively, "the Mobile Banking Applications"). ( Id., ¶ 13.)
On November 10, 2014, Chase filed a motion to sever the infringement claims against it from the infringement claims against Mitek and to stay the infringement claims against it until resolution of the Mitek claims. (D.I. 26.) On November 19, 2014, the other Bank defendants filed similar motions and notices to join Chase's motion to sever and stay. (1142 Action, D.I. 20; 1143 Action, D.I. 23; 1144 Action, D.I. 23.) As such, pending before the court is a joint motion to sever the Bank defendants from their respective cases and stay the infringement claims against them until resolution of RMII's infringement claims against Mitek. Additionally, Mitek asks the court to transfer RMII's infringement claims to the United States District for the Southern District of California. (D.I. 26.)
A. Motion to Sever
On November 10, 2014, Chase filed a motion to sever the infringement claims against it from the infringement claims against Mitek. (D.I. 26.) The remaining Bank defendants join in this motion to sever and motion to stay. (1142 Action, D.I. 20; 1143 Action, D.I. 23; 1144 Action, D.I. 23.)
When a patent holder sues multiple accused infringers, it may be proper for the court to sever certain claims against one or more of the accused infringers. See Fed.R.Civ.P. 21. In patent cases, motions to sever are governed by Federal Circuit law because the court's assessment of joinder necessarily requires an analysis of the accused acts of infringement. In re EMC Corp., 677 F.3d 1351, 1354 (Fed. Cir. 2012). indeed, "the court has virtually unfettered discretion in determining whether or not severance is appropriate." Grigsby v. Kane, C.A. No. 99-2083, 2003 WL 24008976, at *2 (M.D. Pa. Mar. 19, 2003).
In assessing whether claims should be severed, courts consider whether: (1) the claim to be preserved is peripheral to the remaining claims; (2) the adjudication of the remaining claims is potentially dispositive of the severed claim; and (3) the transfer of the remaining claims is warranted under 28 U.S.C. § 1404(a). See MGT Gaming, Inc. v. WMS Gaming, Inc., 978 F.Supp.2d 647, 664 (S.D.Miss. 2013); Innovative Automation, LLC v. Audio Video & Video Labs, Inc., No. 6:11-CV-234 LED-JDL, 2012 WL 10816848, at *4 (E.D. Tex. May 30, 2012); Koh v. Microtek ...