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Multimedia Patent Trust v. Tandberg

November 12, 2009

MULTIMEDIA PATENT TRUST, PLAINTIFF,
v.
TANDBERG, INC., DEFENDANT.



The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

On July 6, 2009, Defendant Tandberg filed a motion to dismiss this action in light of its earlier-filed action in the District of Delaware, or to transfer this case to the District of Delaware. (Doc. No. 9.) On July 20, 2009, Plaintiff MPT filed an opposition to Defendant's motion to dismiss. (Doc. No. 16.) On July 27, 2009, Defendant filed a reply in support of its motion to dismiss. (Doc. No. 18.) On August 3, 2009, the Court heard oral argument on Defendant's motion to dismiss or transfer. Frank Pietrantonio appeared on behalf of the Plaintiff. Raymond Coughlan and Robert Mattson appeared on behalf of the Defendant. For the following reasons, the Court grants Defendant's motion and dismisses this action without prejudice.

Background

This is a patent infringement action brought by Plaintiff Multimedia Patent Trust ("MPT"). Plaintiff's Complaint alleges causes of action for infringement of U.S. Patent Nos. 4,958,226 ("the '226 Patent"), 5,227,878 ("the '878 Patent"), 5,500,678 ("the '678 Patent"), and 5,136,377 ("the '377 Patent"). (Compl. ¶¶ 12-20.) Plaintiff filed its Complaint on June 25, 2009. (Doc. No. 1.)

Two days earlier, on June 23, 2009, Defendant Tandberg filed a complaint against MPT in the United States District Court for the District of Delaware seeking declaratory judgment of non-infringement or invalidity as to each of the patents in suit here, as well as an additional patent, No. 5,563,593. (Coughlan Decl. ISO MTD ["Coughlan Decl."] Ex. A.)

Plaintiff Multimedia Patent Trust is a Delaware statutory trust under the Delaware Statutory Trust Act. Defendant Tandberg is a Delaware corporation with its principal place of business in Reston, Virginia. (Peri Decl. ISO MTD ¶ 2.) Defendant is a wholly owned subsidiary of Tandberg ASA -- a company headquartered in New York and Norway that designs and produces video conferencing products. (Id. ¶¶ 2-4.)

Defendant seeks dismissal of this action or transfer to the District of Delaware, relying on the "first to file" rule and the convenience factors of 28 U.S.C. § 1404(a). Plaintiff opposes dismissal and transfer, arguing that convenience and judicial efficiency warrant the Court's retention of this case.

Discussion

I. The First-to-File Rule

Generally, under the first-to-file rule, when cases involving the same parties and issues are filed in two different districts, the court with the later-filed action has discretion to transfer, stay, or dismiss the second case in the interest of efficiency and judicial economy. Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765, 769 (9th Cir. 1997). "The first-to-file rule was developed to serve the purpose of promoting efficiency well and should not be disregarded lightly." Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 625 (9th Cir. 1991) (quotation omitted). "While no precise rule has evolved, the general principle is to avoid duplicative litigation, and to promote judicial efficiency." Barapind v. Reno, 225 F.3d 1100, 1109 (9th Cir. 2000) (quotation omitted).

In the patent context, even where the alleged infringer acts first, the Federal Circuit observes the first-to-file rule, holding that "[t]he general rule favors the forum of the first-filed action." Micron Tech., Inc. v. Mosaid Techs., Inc., 518 F.3d 897, 904 (Fed. Cir. 2008) (citing Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir. 1993)). In this case, it is undisputed that Tandberg filed its Delaware complaint for declaratory judgment before MPT filed its complaint for infringement in this Court. (Coughlan Decl. Ex. A.) Additionally, the two cases involve the same parties, and the patents in suit in this action are also contested in the Delaware action. (Id.)

The fact that Tandberg's complaint was for declaratory judgment does not substantially weaken its argument. The Federal Circuit generally gives priority to the oldest case "whether or not it is a declaratory judgment action." Micron Tech., 518 F.3d at 904. Stressing this point, the Micron Tech. court stated that "the considerations affecting transfer to or dismissal in favor of another forum do not change simply because the first-filed action is a declaratory action." Id. This is especially true following the Supreme Court's ruling in MedImmune Inc. v. Genentech Inc., 549 U.S. 118 (2007). Before MedImmune, the Federal Circuit applied the "reasonable apprehension of imminent suit" test to determine subject matter jurisdiction over declaratory judgments. Id. at 132 n.11. However, the Supreme Court criticized that test and held that an accused infringer need not have a reasonable apprehension of suit by the patentee in order to maintain a preemptive declaratory judgment action. Id.; Micron Tech., 518 F.3d at 900-01. The MedImmune holding increases the likelihood of jurisdiction for declaratory judgment filers and provides potential defendants with "greater opportunity to race to the courthouse to seek a forum more convenient and amenable to their legal interests." Micron Tech., 518 F.3d at 904. Patentees have the same opportunity, and neither the Supreme Court nor the Federal Circuit has held that such a race necessarily creates an exception to the first-to-file rule.

The Court recognizes that it is improper to "automatically go[] with the first filed action" and acknowledges its "discretion to make exceptions to this general rule in the interest of justice or expediency, as in any issue of choice of forum." Micron Tech., 518 F.3d at 904.

Thus, the Court examines the convenience factors under 28 U.S.C. ยง 1404(a) and concludes for the following reasons that these considerations do not warrant an exception to the first-to-file rule. See Id. ("[T]he trial court weighing jurisdiction additionally must consider the real underlying dispute: the convenience and suitability of competing forums. In sum, the ...


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