First-Filed Declaratory Judgment Action Dismissed in California Where Florida Court Was Already Familiar with Patents-in-Suit

July 15, 2011

Plaintiff filed a declaratory judgment action in California seeking to invalidate defendant's patents and for a declaration that it did not infringe the patents. The defendant responded by filing a patent infringement lawsuit in Florida in the same court where it had previously filed and litigated a patent infringement matter on three of the four patents at issue in California against an unrelated party. In ruling on defendant's motion to dismiss the declaratory judgment action, the district court sided with the defendant and dismissed the declaratory judgment action in California even though it was filed before the patent infringement action.

The defendant was a resident of Florida, who owned a patent portfolio pertaining to Ground Data Link ("GDL") technology that collects flight performance data from aircraft and transmits that information wirelessly to ground-based systems. Defendant had licensed its technology to various companies and also had engaged in prior litigation over its patents in Florida, including proceeding through claim construction and obtaining a jury verdict of infringement of its valid patents.

Prior to the litigation, the defendant approached the plaintiff to suggest that the plaintiff should acquire a license to the GDL technology. The parties' representatives met in person in California to discuss a potential license transaction, but did not reach an agreement. After the plaintiff told the defendant that it thought the meeting was beneficial, it stopped responding to defendant's further requests for a license and instead filed a declaratory judgment action in the Central District of California. The defendant subsequently filed a patent infringement action in the Middle District of Florida, where it had previously litigated three of the four patents at issue. Defendant also moved to dismiss the first-filed California action.

Noting that Federal Circuit law determines whether a district court should decline to exercise declaratory judgment jurisdiction in a patent case, the district court stated that "[g]enerally, the first-filed suit has priority," but [w]hen sound reasons make it unjust or inefficient to proceed with the first-filed action, the general preference for the first-filed suit 'should yield to the forum in which all interests are best served" (quoting Genentech, Inc., v. Eli Lilly and Co., 998 F.2d 931, 937 (Fed. Cir. 1993).

The district court then concluded that it would be inefficient and unjust to proceed with the declaratory judgment action based in California. To reach this conclusion, the district court relied on the fact that the Middle District of Florida had already issued claim construction rulings on three of the four patents at issue. Even though the accused systems were different and different invalidity defenses were likely, the district court found that the Middle District of Florida was already very familiar with the patents and that the "interests of expediency and efficiency militate against proceeding with the declaratory judgment action in this court."

The district court also found that convenience and availability of the parties weighed in favor of dismissal because defendant's headquarters, research facilities, employees and former employees were all located in Florida. The district court also found that principles of justice weigh in favor of dismissal because there was evidence that the plaintiff had filed the declaratory judgment action in anticipation of the forthcoming infringement suit.
Accordingly, the district court dismiss the first-filed action.

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This is a notable decision in that deference is usually given to the first-filed action. But here, the district court dismissed the first-filed action in favor of the second case filed in Florida. A significant factor in the decision apparently was the plaintiff's expression of interest in taking a license all the while it was preparing its own preemptive lawsuit. This combined with the fact that the Middle District of Florida was very familiar with the patents led to the dismissal of the first-filed case.

Teledyne Technologies, Inc. v. Harris Corp., Case No. CV 11-00139 DDP (AJWx) (C.D. Cal. July 1, 2011)
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The authors of www.PatentLawyerBlog.com are patent litigation lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.