Docket No. 2013-1090
REYNA, MAYER, TARANTO
December 3, 2013
Brief summary: When DJ and infringement actions “sufficiently overlap” and are “filed in different federal district courts”, the DJ action, “if later filed, is to be stayed, dismissed, or transferred to the forum of the infringement action”. Here, Huawai’s DJ action was filed second and the FC panel concluded the issues raised therein should be considered in the first-filed case.
Summary: Access licensed five patents related to mobile communication devices to it subsidiary Acacia. Acacia then licensed the patents to its subsidiary SmartPhone Technologies LLC. SmartPhone then sued Huawei for infringement. Huawei then sued SmartPhone, Acacia and Access, arguing for declaratory judgment (DJ) of non-infringement beacase it had contracted with Access to purchase products therefrom and is a third party beneficiary of the patent license. The DC then granted SmartPhone et al.’s motion to dismiss Huawei’s complaint based on the first-to-file rule (a complaint involving similar parties and issues was already filed in another district), and because the license agreement excludes third-party beneficiaries and “alter ego” must be considered in the earlier case. The FC panel explained that when DJ and infringement actions “sufficiently overlap” and are “filed in different federal district courts”, the DJ action, “if later filed, is to be stayed, dismissed, or transferred to the forum of the infringement action” (Merial, FC 2012) (noting that exceptions may be made for “judicial and litigant economy” (Elecs. for Imaging, FC 2005)). It found no exceptions in this case and that the alter ego count is a compulsory counterclaim that should also be considered with the earlier-filed complaint.
