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Blue Cove Corp., A Delaware Corporation v. Odyssey Medical

March 28, 2011

BLUE COVE CORP., A DELAWARE CORPORATION D/B/A/ AUGEN OPTICS IN THE STATE OF CALIFORNIA,
PLAINTIFF,
v.
ODYSSEY MEDICAL, INC., A TENNESSEE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

Order Granting Defendant's Motion to Dismiss, Stay or Transfer Action [Doc. 12]

Presently before the Court is the motion to dismiss, stay or transfer action filed by Defendant Odyssey Medical, Inc. ("Odyssey") based upon the first-to-file rule. The Court found the motion appropriate for submission on the papers and without oral argument, and previously vacated the hearing date. For the reasons explained herein, the Court GRANTS Odyssey's motion.

Background

On November 6, 2010, more than one month before Plaintiff Blue Cove Corp. d/b/a/ Augen Optics ("Blue Cove") filed the current suit, Defendant Odyssey Medical, Inc. ("Odyssey") initiated litigation against Augen Opticos S.A. de C.V. ("Augen Opticos") in the U.S. District Court for the Western District of Tennessee. In the Tennessee action, Odyssey alleges Augen Opticos' use of the mark "AUGEN PARASOL" infringes Odyssey's federally registered trademark PARASOL®, U.S. Registration No. 2,211,886. [W.D. Tennessee Complaint, Case No.2:10cv2797, Exhibit C to Plaintiff's Complaint, Doc. 1-3, ¶ 16.]

On December 17, 2010, Blue Cove filed this action for declaratory relief. Blue Cove alleges it is an exclusive licensee and the exclusive distributor of opthalmic lenses sold by Augen Opticos, a Mexican company doing business outside the territorial jurisdiction of the United States. [Complaint, ¶ 1.] Augen Opticos uses the term AUGEN PARASOL in connection with its marketing and sale of opthalmic lenses. Blue Cove seeks a declaration that its use of AUGEN PARASOL in the marketing and sale of Augen Opticos opthalmic lenses does not infringe Odyssey's PARASOL® trademark. [Id., ¶ 11.] Blue Cove alleges that "[b]y virtue of its affiliation with Augen Opticos, a real and actual case or controversy exists between [itself] and Odyssey regarding [its] further use of the term AUGEN PARASOL." [Id., ¶13.]

On December 27, 2010, Odyssey amended the complaint in the Tennessee action to add Blue Cove dba Augen Optics as a Defendant. [Defendant's Motion to Dismiss, Exhibit B.] Odyssey now moves to dismiss this action pursuant to Fed. R. Civ. P. 12(b)(6) and the federal common law first-to-file rule. In the alternative, Odyssey seeks a stay of this action or an order transferring the action to the Western District of Tennessee.

Discussion

The "first-to-file" rule is a "generally recognized doctrine of federal comity" that allows 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) (citations omitted). Pursuant to the rule, "when two identical actions are filed in courts of concurrent jurisdiction, the court which first acquired jurisdiction should try the lawsuit and no purpose would be served by proceeding with a second action." Id. However, this 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.

In applying the "first to file" rule, the court looks to three threshold factors: (1) the chronology of the two actions; (2) the similarity of the parties; and (3) the similarity of the issues. See Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622, 625 (9th Cir. 1991). If the case meets the requirements of the "first to file" rule, the court has the discretion to transfer, stay, or dismiss the action. See id. at 628-29. However, even where the rule would otherwise apply, the court also has the discretion to "dispense" with its application "for reasons of equity." Id. at 628.

1. Chronology of the two actions

Odyssey's action in the Western District of Tennessee was filed more than a month before this action. In opposition, Blue Cove argues that because it was not named in Odyssey's original complaint, the Court should determine the chronology of the actions based upon the date of filing of the amended complaint. However, courts have consistently held that the relevant date to be used for purposes of the first-to-file rule is the date of the original filing and not an amendment. Intersearch Worldwide, Ltd. v. Intersearch Group, Inc., 544 F. Supp. 2d 949, 958 (N.D. Cal. 2008) (relevant date for purposes of first-to-file analysis is date of filing of original complaint regardless of when or how parties were later added); Ward v. Follett Corp., 158 F.R.D. 645, 648 (N.D. Cal. 1994) (relevant inquiry is filing date of original complaint); Plating Resources, Inc. v. UTI Corp., 47 F. Supp. 2d 899, 904 (N.D. Ohio 1999) (same). 2. Similarity of the parties Blue Cove dba Augen Optics is named as a defendant in Odyssey's amended complaint in the Western District of Tennessee. In this Court, Blue Cove alleges it is an exclusive licensee and the exclusive distributor of Augen Opticos products in the United States. [Complaint, ¶ 1.] Blue Cove alleges there exists a real and actual case and controversy between itself and Odyssey regarding the further use of the term AUGEN PARASOL based upon its affiliation with Augen Opticos. [Complaint, ¶ 13.] Nonetheless, Blue Cove argues it is a completely separate and distinct entity for purposes of analysis under the first-to-file rule. The Court disagrees.

Odyssey has shown that Blue Cove dba Augen Optics has held itself out interchangeably with the corporate identity Augen Opticos S.A. de C.V. in prior dealings in this Court and with the U.S. Patent and Trademark Office. [Complaint filed in S.D. Cal. Case No. 10cv1512-IEG, ¶ 7; Declaration of Russell Walker filed in the W.D. Tenn., Exhibit C to Odyssey's Reply, Doc. 16-3,¶¶ 3, 5, 7, 9, 11, 13, 15, 17, 19, 21, 31 and related Exhibits.] Augen Optics and Augen Opticos share a physical office in San Diego. [Supplemental Declaration of Russell Walker in Support of Odyssey's Reply ("Walker Supp. Decl."), Doc. 16-1, Exhibit H-1 (identifying Augen Opticos' address as 6020 Progressive Avenue, San Diego; Complaint, ¶ 8 (identifying Blue Cove's address as 6020 Progressive Avenue, San Diego).] The companies' websites resolve to an identical IP address and the content of their websites is identical. [Walker Supp. Decl., ¶¶ 2-96, 98, 100.] Nowhere on those websites is there any reference to "Blue Cove." [Walker Supp. Decl., ¶ 97.] Based thereon, the Court concludes there is sufficient similarity between Blue Cove dba Augen Optics and Augen Opticos to justify application of the first-to-file rule.

3. Similarity of claims

Odyssey's complaint in the Western District of Tennessee alleges that Augen Opticos' use of the "AUGEN PARASOL" mark infringes Odyssey's federally registered trademark PARASOLĀ®, U.S. Registration No. 2,211,886. In the current case, Blue Cove seeks a declaration that its use of AUGEN PARASOL in the marketing and sale of Augen Opticos opthalmic lenses does not infringe Odyssey's PARASOLĀ® trademark. Blue Cove in its ...


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