UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
J. P. Sercel Associates, Inc.
v. Civil N o . 03-331 JD Opinion N o . 2003 DNH 171 New Wave Research
O R D E R
The plaintiff, J. P. Sercel Associates, Inc. (“JPSA”),
brought a declaratory judgment action, with related state law
claims, challenging a patent issued to the defendant, New Wave
Research. New Wave moves to dismiss, stay, or transfer the
action because it previously filed a patent infringement suit
against JPSA in the United States District Court for the Northern
District of California, asserting infringement by JPSA of the
same patent. JPSA objects to New Wave’s motion.
Discussion Because this is a suit involving a patent, the law of the Federal Circuit governs substantive patent issues while the law of the First Circuit governs procedural issues that do not affect patent law. See Toxgon Corp. v . BNFL, Inc., 312 F.3d 1379, 1382 (Fed. Cir. 2002); Madley v . Duke Univ., 307 F.3d 1351, 1358 (Fed. Cir. 2002). The Federal Circuit has not held that transfer of venue pertains to patent such that Federal Circuit law should control. See e.g., HollyAnne Corp. v . TFT, Inc., 199 F.3d 1304,
1306-07 (Fed. Cir. 1999) (applying Federal Circuit law to
jurisdiction discussion and Sixth Circuit law to venue
discussion); Banjo Buddies, Inc. v . Renosky, 156 F. Supp. 2d 2 2 ,
24-25 (D. M e . 2001) (applying First Circuit law to transfer of
venue motion in patent case); cf. Midwest Indus. v . Karavan
Trailers, Inc., 175 F.3d 1356, 1359-60 (Fed. Cir. 1999) (listing
certain nonsubstantive issues held by Federal Circuit to be
pertinent to patent l a w ) . However, the Federal Circuit has
concluded that “[t]he proper relationship between an action under
[28 U.S.C. § 2201(a)] for a declaration of patent rights and a
later-filed infringement suit triggers [its] special
responsibility to foster national uniformity in patent practice.”
Serco Servs. C o . v . Kelley Co., Inc., 51 F.3d 1037, 1039 (Fed.
Cir. 1995). Therefore, district courts follow Federal Circuit
precedent in considering the first-filed action rule in patent cases.1 See SAES Getters S.p.A. v . Aeronex, Inc., 219 F. Supp.
2d 1081, 1089 (S.D. Cal. 2002).
1 This case does not involve the specific issue addressed in Genentech, whether a first-filed declaratory judgment action will be given preference over a direct infringement suit filed later. See Genentech, Inc. v . Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir. 1993). Nevertheless, the court will follow the Federal Circuit’s precedent for purposes of applying the first-filed rule.
2 New Wave asserts that because it filed the first action
raising patent infringement of the disputed patent in the
Northern District of California, the first-filed rule counsels
that JPSA’s suit in this court should be dismissed, stayed, or
transferred to the Northern District of California.2 New Wave
also contends that New Hampshire is a forum non conveniens under
28 U.S.C. § 1404(a). In response, JPSA argues that the first-
filed rule does not apply because New Wave filed suit in
California “secretly” in bad faith in order to establish its own
choice of venue.
When actions asserting and challenging the same patent and
involving the same parties are proceeding in different federal
district courts, the suit that was filed first is preferred.
Genentech, 998 F.2d at 937. “The first-filed action is preferred
. . . ‘unless considerations of judicial and litigant economy,
and the just and effective disposition of disputes, require otherwise.’” Serco Servs., 51 F.3d at 1039 (quoting Genentech,
998 F.2d at 9 3 7 ) . In applying the first-filed rule, a court may
stay, transfer, or dismiss an action in favor of a more
appropriate parallel action in another federal district. See
2 New Wave’s alternative argument that JPSA’s suit is improper under the Declaratory Judgment Act, 28 U.S.C. § 2201, merely repeats its argument under the first-filed rule.
3 R.J. Reynolds Tobacco C o . v . Star Scientific, Inc., 169 F. Supp.
2d 452, 455 (M.D.N.C. 2001).
As a doctrine of comity among the federal courts, the first-
filed action rule will not apply if the circumstances of the
first suit suggest bad faith or if the convenience of the parties
favors a different forum. See, e.g., Serco Servs., 51 F.3d at 1039-40; Holmes Group, Inc. v . Hamilton Beach/Proctor Silex,
Inc., 249 F. Supp. 2d 1 2 , 15 (D. Mass. 2002); Dupont Pharms. C o .
v . Sonus Pharms., Inc., 122 F. Supp. 2d 230, 231 (D. Mass. 2000).
In patent cases, where all appeals are heard by the Federal
Circuit, less consideration is given to issues of forum shopping
or an inequitable race to the court house. Serco Servs., 51 F.3d
at 1040. The plaintiff in the second suit bears the burden of
showing compelling circumstances or sufficient inconvenience to
overcome the first-filed action rule. See Cent. States, Southeast & Southwest Areas Pension Fund v . Paramount Liquor Co.,
34 F. Supp. 2d 1092, 1094 (N.D. Ill. 1999); 800-Flowers, Inc. v .
Intercontinental Florist, Inc., 860 F. Supp. 128, 132 (S.D.N.Y.
1994).
JPSA contends that compelling circumstances exist here
because New Wave filed its suit in California immediately after
its patent issued and did not serve the complaint on JPSA. The
lack of immediate service apparently is the basis for JPSA’s
4 charge that New Wave’s complaint was “secretly filed.” JPSA asks
the court to infer from New Wave’s fast action that it was forum
shopping and filing its action in bad faith to preempt a suit by
JPSA.
Under the federal rules, a complaint must be served within
120 days of filing. Fed. R. Civ. P. 4 ( m ) . JPSA could not and
does not contend that 120 days passed without service.
Otherwise, service has no effect on the first-filed action rule.
See, e.g., Pacesetter Sys., Inc. v . Medtronic, Inc., 678 F,2d 9 3 ,
96 n.3 (9th Cir. 1982); Med-Tec Iowa, Inc. v . Nomos Corp., 76 F.
Supp. 2d 962, 970 (N.D. Iowa 1999) (citing cases); Guthy-Renker
Fitness, L.L.C. v . Icon Health & Fitness, Inc., 179 F.R.D. 264,
272 (C.D. Cal. 1998) (same).
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
J. P. Sercel Associates, Inc.
v. Civil N o . 03-331 JD Opinion N o . 2003 DNH 171 New Wave Research
O R D E R
The plaintiff, J. P. Sercel Associates, Inc. (“JPSA”),
brought a declaratory judgment action, with related state law
claims, challenging a patent issued to the defendant, New Wave
Research. New Wave moves to dismiss, stay, or transfer the
action because it previously filed a patent infringement suit
against JPSA in the United States District Court for the Northern
District of California, asserting infringement by JPSA of the
same patent. JPSA objects to New Wave’s motion.
Discussion Because this is a suit involving a patent, the law of the Federal Circuit governs substantive patent issues while the law of the First Circuit governs procedural issues that do not affect patent law. See Toxgon Corp. v . BNFL, Inc., 312 F.3d 1379, 1382 (Fed. Cir. 2002); Madley v . Duke Univ., 307 F.3d 1351, 1358 (Fed. Cir. 2002). The Federal Circuit has not held that transfer of venue pertains to patent such that Federal Circuit law should control. See e.g., HollyAnne Corp. v . TFT, Inc., 199 F.3d 1304,
1306-07 (Fed. Cir. 1999) (applying Federal Circuit law to
jurisdiction discussion and Sixth Circuit law to venue
discussion); Banjo Buddies, Inc. v . Renosky, 156 F. Supp. 2d 2 2 ,
24-25 (D. M e . 2001) (applying First Circuit law to transfer of
venue motion in patent case); cf. Midwest Indus. v . Karavan
Trailers, Inc., 175 F.3d 1356, 1359-60 (Fed. Cir. 1999) (listing
certain nonsubstantive issues held by Federal Circuit to be
pertinent to patent l a w ) . However, the Federal Circuit has
concluded that “[t]he proper relationship between an action under
[28 U.S.C. § 2201(a)] for a declaration of patent rights and a
later-filed infringement suit triggers [its] special
responsibility to foster national uniformity in patent practice.”
Serco Servs. C o . v . Kelley Co., Inc., 51 F.3d 1037, 1039 (Fed.
Cir. 1995). Therefore, district courts follow Federal Circuit
precedent in considering the first-filed action rule in patent cases.1 See SAES Getters S.p.A. v . Aeronex, Inc., 219 F. Supp.
2d 1081, 1089 (S.D. Cal. 2002).
1 This case does not involve the specific issue addressed in Genentech, whether a first-filed declaratory judgment action will be given preference over a direct infringement suit filed later. See Genentech, Inc. v . Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir. 1993). Nevertheless, the court will follow the Federal Circuit’s precedent for purposes of applying the first-filed rule.
2 New Wave asserts that because it filed the first action
raising patent infringement of the disputed patent in the
Northern District of California, the first-filed rule counsels
that JPSA’s suit in this court should be dismissed, stayed, or
transferred to the Northern District of California.2 New Wave
also contends that New Hampshire is a forum non conveniens under
28 U.S.C. § 1404(a). In response, JPSA argues that the first-
filed rule does not apply because New Wave filed suit in
California “secretly” in bad faith in order to establish its own
choice of venue.
When actions asserting and challenging the same patent and
involving the same parties are proceeding in different federal
district courts, the suit that was filed first is preferred.
Genentech, 998 F.2d at 937. “The first-filed action is preferred
. . . ‘unless considerations of judicial and litigant economy,
and the just and effective disposition of disputes, require otherwise.’” Serco Servs., 51 F.3d at 1039 (quoting Genentech,
998 F.2d at 9 3 7 ) . In applying the first-filed rule, a court may
stay, transfer, or dismiss an action in favor of a more
appropriate parallel action in another federal district. See
2 New Wave’s alternative argument that JPSA’s suit is improper under the Declaratory Judgment Act, 28 U.S.C. § 2201, merely repeats its argument under the first-filed rule.
3 R.J. Reynolds Tobacco C o . v . Star Scientific, Inc., 169 F. Supp.
2d 452, 455 (M.D.N.C. 2001).
As a doctrine of comity among the federal courts, the first-
filed action rule will not apply if the circumstances of the
first suit suggest bad faith or if the convenience of the parties
favors a different forum. See, e.g., Serco Servs., 51 F.3d at 1039-40; Holmes Group, Inc. v . Hamilton Beach/Proctor Silex,
Inc., 249 F. Supp. 2d 1 2 , 15 (D. Mass. 2002); Dupont Pharms. C o .
v . Sonus Pharms., Inc., 122 F. Supp. 2d 230, 231 (D. Mass. 2000).
In patent cases, where all appeals are heard by the Federal
Circuit, less consideration is given to issues of forum shopping
or an inequitable race to the court house. Serco Servs., 51 F.3d
at 1040. The plaintiff in the second suit bears the burden of
showing compelling circumstances or sufficient inconvenience to
overcome the first-filed action rule. See Cent. States, Southeast & Southwest Areas Pension Fund v . Paramount Liquor Co.,
34 F. Supp. 2d 1092, 1094 (N.D. Ill. 1999); 800-Flowers, Inc. v .
Intercontinental Florist, Inc., 860 F. Supp. 128, 132 (S.D.N.Y.
1994).
JPSA contends that compelling circumstances exist here
because New Wave filed its suit in California immediately after
its patent issued and did not serve the complaint on JPSA. The
lack of immediate service apparently is the basis for JPSA’s
4 charge that New Wave’s complaint was “secretly filed.” JPSA asks
the court to infer from New Wave’s fast action that it was forum
shopping and filing its action in bad faith to preempt a suit by
JPSA.
Under the federal rules, a complaint must be served within
120 days of filing. Fed. R. Civ. P. 4 ( m ) . JPSA could not and
does not contend that 120 days passed without service.
Otherwise, service has no effect on the first-filed action rule.
See, e.g., Pacesetter Sys., Inc. v . Medtronic, Inc., 678 F,2d 9 3 ,
96 n.3 (9th Cir. 1982); Med-Tec Iowa, Inc. v . Nomos Corp., 76 F.
Supp. 2d 962, 970 (N.D. Iowa 1999) (citing cases); Guthy-Renker
Fitness, L.L.C. v . Icon Health & Fitness, Inc., 179 F.R.D. 264,
272 (C.D. Cal. 1998) (same).
There is no dispute that the two suits involve the same
parties and the same underlying issues.3 Because forum shopping
carries less weight in patent cases, even if New Wave’s conduct supported the inference JPSA urges, that alone would not likely
be enough to overcome the first-filed action rule. See Serco
Servs., 51 F.3d at 1040. Additional bad faith activity coupled
with inconvenience to the plaintiff in the second-filed action is
3 Both suits address validity and infringement of the same patent. The New Hampshire suit also includes state law claims of unfair competition and tortious interference with business relations.
5 required to show sufficiently compelling circumstances. See,
e.g., id.; Holmes Group, 249 F. Supp. 2d at 1 6 .
JPSA offers no evidence as to other bad faith conduct by New
Wave.4 With respect to the relative convenience of litigating in
New Hampshire versus California, JPSA first contends, contrary to
the legal standard, that convenience is not relevant. JPSA
asserts that the company and the vast majority of its witnesses
are located in New Hampshire. It also contends that because its
accused system is located in New Hampshire, it would be
inconvenient to transport the system to California for purposes
of litigation there. New Wave states that it is located within
the Northern District of California and that seven of the nine
inventors of the disputed patent along with its employee
witnesses are available there. New Wave also points out that
JPSA would not have to transport its system because it has sold
the accused product in northern California. Nothing in the record suggests that there is a
jurisdictional question in the California proceeding that would
counsel in favor of staying, rather than dismissing, this action.
See, e.g., Elmendorf Grafica, Inc. v . D.S. America (East), Inc.,
4 JPSA’s challenge to the merits of New Wave’s suit are not sufficient, based on the present record, to invoke Federal Rule of Civil Procedure 11 or to show other bad faith conduct.
6 48 F.3d 4 6 , 52 (1st Cir. 1995). Nor has JPSA asked that its
action be transferred to the Northern District of California as
an alternative to dismissal. Therefore, because JPSA has not
carried its burden of showing that the preference for the first-
filed action, the proceeding filed by New Wave in the Northern
District of California, should not govern in this case, this case is dismissed in favor of that proceeding.
Conclusion
For the foregoing reasons, the defendant’s motion to dismiss
(document n o . 4 ) is granted. This case is dismissed without
prejudice.
The clerk of court shall enter judgment accordingly and
close the case.
SO ORDERED.
Joseph A . DiClerico, Jr. United States District Judge October 7 , 2003
cc: M. Elizabeth Day, Esquire Jeremy T . Walker, Esquire Steven E . Grill, Esquire