United States District Court, N.D. California, San Jose Division
ORDER DENYING DEFENDANTS' MOTION TO TRANSFER
WITHOUT PREJUDICE AND STAYING PROCEEDINGS FOR SIXTY
LAB SON FREEMAN, United States District Judge
ON Semiconductor Corporation et al. (“ON”) seek
an order transferring this case to the District of Arizona,
or, in the alternative, severing the causes of action
concerning U.S. Patent Nos. 6, 212, 079 (“the '079
patent”) and 8, 115, 457 (“the ʼ457
patent”) and transferring those causes of action to the
District of Arizona. Mot., ECF 18. For the reasons discussed
below, ON's motion is DENIED WITHOUT PREJUDICE. All
further proceedings are STAYED for sixty (60) days.
facts begin not here, but in Arizona. On August 11, 2016, ON
filed an action for patent infringement against Plaintiff
Power Integrations, Inc. (“Power Integrations”)
in the District of Arizona, ON Semiconductor Corporation
et al. v. Power Integrations, Inc., Case No.
2:16-cv-2720, alleging infringement of six patents and
requesting declaratory judgment that it did not infringe
three of Power Integrations' patents: the '097
patent, the '457 patent, and U.S. Patent No. 6, 249, 876
(“the '876 patent”). Ex. A to Opp., ECF 19-2.
Nearly three months later, on November 1, 2016, Power
Integrations filed the instant suit in this district,
alleging infringement of its '079 and '547 patents,
as well as U.S. Patent Nos. 7, 239, 119 (“the '119
patent”), 7, 538, 533 (“the '533
patent”), 6, 297, 623 (“the '623
patent”), and 6, 414, 471 (“the '471
patent”). Compl., ECF 1.
next day, on November 2, 2016, Power Integrations filed a
motion in the Arizona case to (1) dismiss for improper venue
and lack of personal jurisdiction, and (2) in the
alternative, transfer the case to this district. Ex. C to
Opp., ECF 19-4. After ON amended its Complaint, Power
Integrations filed a new motion on these same grounds. Ex. A
to Opp., ECF 19-2. Briefing for this motion completed on
February 13, 2017.
filed the instant motion on December 21, 2016. Mot., ECF 18.
The Court heard argument on March 16, 2017.
“first-to-file” rule 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
Systems, Inc. v. Medtronic Inc., 678 F.2d 93, 94-95 (9th
Cir. 1982). Thus, “[w]hen two actions involving nearly
identical parties and closely related patent infringement
questions are filed in separate districts, which happens with
some frequency in contemporary litigation, the general rule
is that the case first filed takes priority, and the
subsequently filed suit should be dismissed or transferred or
stayed.” 14D Wright, A. Miller & M. Kane, Fed.
Prac. & Proc. Juris. § 3823 (3d ed. 2011). In patent
litigation, “[t]he first-filed action is preferred,
even if it is declaratory, ‘unless considerations of
judicial and litigant economy, and the just and effective
disposition of disputes, require otherwise.'”
Serco Services Co., L.P. v. Kelley Co., Inc., 51
F.3d 1037, 1039 (Fed. Cir. 1995) (quoting Genentech, Inc.
v. Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir.
1993), abrogated on other grounds by Wilton v. Seven
Falls Co., 515 U.S. 277, 115 S.Ct. 2137, 132 L.Ed.2d 214
factors should be considered in deciding whether to apply the
first-to-file rule: (1) the chronology of the two actions;
(2) the similarity of the parties; and (3) the similarity of
the issues. Alltrade, Inc. v. Uniweld Prod., Inc.,
946 F.2d 622, 625-26 (9th Cir. 1991). The issues and parties
in the first and second action need not be identical, but
“substantially similar.” Inherent v.
MartindaleHubbell, 420 F.Supp.2d 1093, 1097 (N.D. Cal.
2006) (quoting Dumas v. Major League Baseball Properties
Inc., 52 F.Supp. 2d. 1183 (S.D. Cal. 1999), vacated
on other grounds by, 104 F.Supp.2d 1224 (S.D.
Cal. 2000) aff'd, 300 F.3d 1083 (9th Cir.
2002)); see also Nat'l Union Fire Ins. Co. of
Pittsburgh, Pa. v. Payless Shoesource, Inc., No.
C-11-1892 EMC, 2012 WL 3277222, at *3 (N.D. Cal. Aug. 9,
2012) (“For purposes of the first-to-file rule, [i]n
determining whether the cases involve the same issue, it is
enough that the overall content of each suit is not very
capable of independent development, and will be likely to
overlap to a substantial degree.”) (internal quotation
the parties agree that the first two factors are met: the
Arizona case was filed first, and the parties are identical.
Compare Mot. at 4-5, ECF 18, with Opp. at
6-8, ECF 19. However, Power Integrations disputes that there
is sufficient “similarity of the issues” because,
of the twelve patents that have been asserted across the two
cases, only two overlap. Opp. at 7-8, ECF 19. ON responds
that there is nevertheless sufficient similarity because the
patents and accused products all involve related technology:
power conversion. Reply at 4-5, ECF 20.
Court finds that the “similarity of the issues”
factor is weak, but still favors application of the
first-to-file rule. Power Integrations is correct that at
least some of the issues in this case are capable of
independent development. For example, Power Integrations
names different accused products for the '079 and
'457 patents in its Complaint than for the other four
patents it asserts. Compare Compl. ¶¶ 13,
23, ECF 1, with id. ¶¶ 32, 39, 46, 54. In
addition, the patents asserted by Power Integrations accuse
ON's products, while the patents asserted by ON accuse
Power Integrations' products. Nevertheless, ON is also
correct that all twelve patents asserted here relate to or
involve similar technology: power conversion. As such, they
may raise overlapping issues relating to prior art, the
understanding of a person of ordinary skill in the art, and
relevant conduct of the parties. This overlap could be
substantial, but it is too early to tell at this stage.
Nevertheless, it is at least possible for judicial efficiency
to be served by litigating the claims together. The
first-to-file rule “serves the purpose of promoting
efficiency . . . .” Church of Scientology of Calif.
v. U.S. Dep't of Army, 611 F.2d 738, 750 (9th Cir.
1979). In light of this, the Court is cautious to place too
much emphasis on potential differences in issues at this
early stage. Accordingly, because the Arizona case was
chronologically filed first, the parties are identical, and
the issues are potentially similar enough to weakly favor it,
the first-to-file rule applies.
Exceptions to the First-to-File Rule
application of the first-to-file rule is discretionary, and a
court may depart from it if there is “sound reason that
would make it unjust or inefficient to continue the
first-filed action.” Genentech, 998 F.2d at
938. “The circumstances under which an exception to the
first-to-file rule typically will be made include bad faith,
anticipatory suit, and forum shopping.” See
e.g., Alltrade, 946 F.2d at 628. Other
circumstances may also warrant a rejection of the
first-to-file rule, such as factors involving convenience to
the parties or sound judicial administration. See,
e.g., Z-Line Designs, Inc. v. Bell'O