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Lighting Science Group Corp. v. U.S. Philips Corp.

February 3, 2009

LIGHTING SCIENCE GROUP CORPORATION, PLAINTIFF,
v.
U.S. PHILIPS CORPORATION, KONINKLIJE PHILIPS ELECTRONICS N.V., DEFENDANTS.



The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge

MEMORANDUM AND ORDER

This matter is before the court on defendants Koninklijke Philips Electronics N.V. ("Philips N.V.") and U.S. Philips Corp.'s ("U.S. Philips") (collectively "defendants") motion to dismiss for lack of subject matter jurisdiction arising out of its request that the court exercise its discretion under the Declaratory Judgment Act and decline to assert jurisdiction over the matter. In the alternative, defendants move to transfer this action to the United States District Court for the District of Massachusetts pursuant to 28 U.S.C. § 1404(a). Plaintiff Lighting Science Group Corp. ("LSG" or "plaintiff") opposes the motion. For the reasons set forth below, defendant's motion to dismiss is GRANTED.*fn1

BACKGROUND

Plaintiff LSG is a Delaware corporation with its principal place of business in Rancho Cordova, California. (Am. Compl. [Docket #11], filed Sept. 29, 2008, ¶ 8.) Defendant Philips N.V. is a Netherlands public limited liability company with its principal place of business in the Netherlands, and defendant U.S. Philips is Delaware corporation with its principal place of business in New York. (Id. ¶¶ 9-10.) Through this action LSG seeks a declaration of patent non-infringement and invalidity surrounding United States Patent No. 6,250,774 (the "'774 patent") owned by either Philips N.V. or U.S. Philips. (Id. ¶¶ 1, 5, 12.)

In August 2007, Philips N.V. acquired Color Kinetics, Inc. ("CK") and changed CK's name to Philips Solid State Lighting Solutions ("Philips Solid State"). (Exs. A & B to Decl. of Kevin M. Littman in Supp. of Defs.' Mot. ("Littman Decl."), filed Dec. 1, 2008.) Philips Solid State is based in Burlington, Massachusetts. (Ex. B to Littman Decl.)

On February 19, 2008, Philips Solid State sued LSG and others in the United States District Court for the District of Massachusetts (the "Massachusetts District Court") for infringement of five related patents that had been issued to CK prior to its acquisition by Philips N.V. (the "February Massachusetts Action"). (Ex. D to Littman Decl.; Decl. of Morgan Adessa in Support of LSG's Opp'n, ("Adessa Decl."), filed Jan. 16, 2009, ¶ 2.) On April 18, 2008, the complaint in the February Massachusetts Action was amended to add Philips N.V. as a plaintiff. (Ex. D to Littman Decl.)

Defendants asserts that in the course of preparing their infringement contentions in the February Massachusetts Action, they discovered that LSG was infringing on two additional patents, Philips Solid State's United States Patent No. 6,967,448 (the "'448 patent") and the '774 patent at issue in this case. (See Ex. H to Littman Decl.) On September 22, 2008, defendants' counsel sent a letter to plaintiff's counsel indicating that they would seek leave to amend the complaint in the February Massachusetts Action to include the two additional patent infringement claims and inquiring whether plaintiff would consent to the amendment. (Id.) The next day, on September 23, 2008, plaintiff filed its complaint for declaratory judgment of noninfringement relating to the '774 patent against U.S. Philips in this court.*fn2 (Compl. [Docket #1], filed Sept. 23, 2008.) On September 24, 2008, plaintiff's counsel sent a letter to defendants' counsel indicating that plaintiff did not oppose the addition of the '448 patent to the February Massachusetts Action, but that it did oppose addition of the '774 patent. (Ex. J to Littman Decl.) The letter also advised that LSG had filed suit the previous night relating to the '774 patent in this court. (Id.)

On September 26, 2008, defendants filed a new action in the Massachusetts District Court, alleging that LSG infringed the '448 patent and the '774 patent (the "September Massachusetts Action"). On September 30, 2008, defendants moves to consolidate the February Massachusetts Actions with the September Massachusetts Action. (Ex. M to Littman Decl.) On October 28, 2008, LSG filed a motion in the Massachusetts District Court seeking to dismiss or transfer the claims relating to the '774 patent in the September Massachusetts Action in favor of this case. (Adessa Decl. ¶ 15.) Neither defendants' consolidation motion nor plaintiff's motion to dismiss or transfer have been ruled upon by the Massachusetts District Court.

ANALYSIS

Defendants ask this court to abstain from exercising jurisdiction over the matter, contending that the February Massachusetts Action is the first-filed suit and, in the alternative, that plaintiff's action is an anticipatory filing that should not be entitled to deference.

"The exercise of jurisdiction under the Federal Declaratory Judgment Act (the "DJA"), 28 U.S.C. § 2201(a), is committed to the sound discretion of the district courts." Huth v. Hartford Ins. Co., 298 F.3d 800, 802 (9th Cir. 2002) (citing Wilton v. Seven Falls Co., 515 U.S. 277, 282-83 (1995); Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 494-95 (1942); Gov't Employee Ins. Co. v. Dizol, 133 F.3d 1220, 1223 (9th Cir. 1998)). The DJA provides that a court "may declare the rights and other legal relations of any interested party seeking such declaration," but does not require that the court exercise such jurisdiction. 28 U.S.C. § 2201(a); see MedImmune, Inc. v. Genentech, 549 U.S. 118, 136 (2007). Accordingly, district courts retain "unique and substantial discretion in deciding whether to declare the rights of litigants." MedImmune, 549 U.S. at 136 (citing Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995)).

Furthermore, "[t]here is a generally recognized doctrine of federal comity which permits a district court to decline jurisdiction over an action when a complaint involving the same parties and issues has already been filed in another district." Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982) (citing Church of Scientology of Cal. v. U.S. Dep't of the Army, 611 F.2d 738, 749 (9th Cir. 1979); Great N. Ry. Co. v. Nat'l R.R. Adjustment Bd., 422 F.2d 1187, 1193 (7th Cir. 1970)); see also Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952) (recognizing the degree of discretion left to the lower courts because "[t]he Federal Declaratory Judgments Act, facilitating as it does the initiation of litigation by different parties to many-sided transactions, has created complicated problems for coordinate courts"). The purpose of the doctrine in is "to avoid placing an unnecessary burden on the federal judiciary, and to avoid the embarrassment of conflicting judgments." Church of Scientology, 611 F.2d at 750.

Under the principles of federal comity, a district court "has discretion to transfer, stay, or dismiss" an action if it is duplicative of a parallel action filed in another federal court. Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765, 769 (9th Cir. 1997). An action is duplicative of another "if the claims, parties, and available relief do not significantly differ between the two actions." Serlin v. Arthur Andersen & Co., 3 F.3d 221, 223 (7th Cir. 1993).

Where duplicative actions are filed in courts of concurrent jurisdiction, the court which first acquired jurisdiction generally should retain jurisdiction. Pacesetter, 678 F.2d at 95. "However, this 'first to file' rule is not a rigid or inflexible rule to be mechanically applied, but rather is to be applied with a view to the dictates of sound judicial administration." Id. The Supreme Court has explicitly noted that "[w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation, does not counsel rigid mechanical solutions" to the problems of duplicative ...


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