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Judge Andrews grants motions to intervene and sever, denies motions to stay

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In a recent memorandum order, Judge Richard G. Andrews granted Adobe Systems, Inc.’s (“Adobe”) motion to intervene in two actions pending in the District of Delaware, C.A. Nos. 11-812-RGA and 12-1440-RGA. Select Retrieval LLC v. Amerimark Direct LLC, et al., C.A. No. 11-812-RGA (D. Del. Jul. 3, 2013). Judge Andrews also granted defendants’ motions to sever in C.A. No. 11-812, but denied defendants’ motions to stay in both actions.

Judge Andrews explained that while plaintiff has not sued Adobe, it has sued at least five of its customers in the District of Delaware. Id. at 2. Moreover, “there is litigation on the same patent between the Plaintiff and other Adobe clients” at least in the Southern District of California, Oregon, Illinois, and Maine. Id. Judge Andrews additionally noted that Adobe had filed a declaratory judgment against plaintiff in the Southern District of California, but there has recently been little activity in that action. Id. at 1-2.

Considering Adobe’s motion to intervene, Judge Andrews was guided by Fed. R. Civ. P. 24(a). First, Judge Andrews considered “the extent to which Adobe’s technology was at issue” and “whether Adobe has . . . a duty to defend and indemnify its clients” to determine whether Adobe had a “significant protectable interest.” Id. at 2-3. Judge Andrews noted that plaintiff “did not dispute that Adobe had a duty to defend and indemnify its five clients.” Id. Moreover, Judge Andrews noted that “[t]he fact that Adobe has acknowledged its duty to defend and indemnify is a fairly strong indicator that its technology is indeed at issue in these cases.” Id. at 3. Judge Andrews further explained that “the fact that these five Adobe clients (as well as at least four more Adobe clients in the four related cases) all are alleged to infringe the patent suggests that Adobe’s technology may be the common link that provides a basis to believe each of the nine or more companies infringes the patent.” Id. Judge Andrews thus found it unnecessary “to delve into the technology here to conclude that Adobe does have a significant protectable interest.” Id. Finding the remainder of the Rule 24(a) factors to weigh in Abode’s favor, Judge Andrews granted Adobe’s motion to intervene. Id.

With respect to the motion to stay the litigation, defendants argued for application of the “customer suit exception.” Judge Andrews first distinguished the instant matter from Pragmatus Telecom, LLC v. Advanced Store Co., Inc., C.A. No. 12-88-RGA (D.Del. Jul. 10, 2012) (discussed previously here), where defendants had also argued in favor of the customer suit exception. Id. at 3-4. Judge Andrews noted that in this case, the “manufacturer declaratory judgment is in another district” (weighing in favor of applying the exception). Id. at 4. On the other hand, in this action, “customer defendants have not agreed to be bound by the results.” Id. Moreover, Judge Andrews found that “given the lack of activity in the declaratory judgment action, I cannot think that [granting stay] presents a particularly fair (to the Plaintiff) alternative to the pending litigation.” Id. On balance, Judge Andrews found there were “too many loose ends,” and denied defendants’ motions to stay the litigation. Id.

Judge Andrews had no “hesitation in concluding that the four Adobe customers [in C.A. 11-812] are not properly joined to cases involving other defendants using technology obtained elsewhere.” Id. at 3. Judge Andrews thus granted defendants’ motions to sever, but the cases against them were consolidated with those of the other defendants for all purposes other than trial. Id. at 4.

Select Retrieval LLC v. Amerimark Direct LLC, et al., C.A. No. 11-812-RGA (D. Del. Jul. 3, 2013)

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