Judge Robinson finds that first-filed declaratory judgment action in Delaware should proceed; enjoins prosecution of litigation in other district.
Judge Sue L. Robinson recently granted a declaratory judgment plaintiff’s motion to enjoin a related infringement action filed in another district court. Nexans Inc. v. Belden Inc., Civ. No. 12-1491-SLR (D. Del. Aug. 6, 2013). The plaintiff in the Delaware action, Nexans, filed suit against the defendant, Belden, seeking a declaratory judgment of non-infringement and invalidity of three Belden patents, and asserting an affirmative claim alleging Belden infringed a Nexans patent. Id. at 1. Two days later, Belden filed suit in Indiana alleging Nexans infringed the same three Belden patents, as well as an additional patent not at issue in the Delaware litigation. Id. at 2. Just over a week later, Nexans amended its Delaware complaint to add the “additional patent” to its declaratory judgment action. Id. at 2-3. The result was that both the Delaware and Indiana cases involved allegations regarding the same four Belden patents, although the Nexans patent was at issue only in the Delaware litigation.
Belden moved to dismiss Nexans’ amended claim, arguing that because the additional patent was not the subject of the parties’ broken-down negotiations, there was no case or controversy with respect to it to support declaratory judgment jurisdiction. “According to Belden, the case or controversy with respect to the [additional] patent did not arise until Belden’s filing of the Indiana action . . . .” Id. at 5. The Court rejected that argument, explaining that “it was not the filing of the Indiana action that caused a case or controversy to arise out of the [additional] patent, but the same events that led to the filing of the original complaint that caused the case or controversy.” Id. at 6. That, the Court explained, was because Belden’s warning letter was not specific regarding which patents it believed Nexans infringed, and in subsequent discussions leading up to the filing of Nexans’ declaratory judgment action, the additional patent was mentioned. Id. at 6-7. A case or controversy also arose, the Court explained, because the technology covered by the additional patent was related to one of the patents at issue in Nexans’ original complaint. Id. (“When an actual controversy exists over one patent, it can also cover patents relating to the same technology between the same parties.”). The Court also found Belden’s litigation history with other parties relevant to the case or controversy question: Belden had filed three other suits alleging infringement of the additional patent by parties also alleged to infringe one of the patents at issue in Nexans’ complaint, so the Court found it reasonable for Nexans “to believe that the [additional] patent was related to the controversy between the parties.” Id. at 7. As a result, the Court denied Belden’s motion to dismiss the amended claim, which the Court found related back under Rule 15(c)(1)(B), meaning that the Indiana and first-filed Delaware litigation involved the same four Belden patents. Id. at 7, 8.
Because the litigations were mirror images with respect to Belden’s patents, Nexans sought to enjoin the Indiana litigation under the first-filed rule. Belden argued several exceptions to the first-filed rule existed, such that the Delaware litigation should be dismissed in favor of the Indiana case. Specifically, Belden argued that Nexans’ declaratory judgment action was anticipatory (or, in the alternative, was filed in bad faith during settlement negotiations) and was the result of forum shopping. The Court disagreed, finding that Nexans’ suit, filed 19 days after the parties’ Standstill Agreement expired and at a time when settlement negotiations had broken down, could not be considered anticipatory or in bad faith. Id. at 11. The Court also found that alleged forum-shopping was no reason to depart from the first-filed rule, explaining that it would not "characterize a plaintiff’s choice of venue as ‘forum shopping’ when, by essentially moving to transfer venue, a defendant is doing the same thing – choosing a venue that it believes to be more favorable to its claims for whatever reason.” Id. at 12. Finally, the Court was not convinced that any other considerations weighed in favor of departing from the first-filed rule, and explained that it made more sense to litigate in Delaware because “dismissal of the declaratory judgment claims in favor of the Indiana action would still leave Nexans’ affirmative claim for infringement of its patent in the instant action and require the parties to litigate in two separate courts.” Id. at 13. The Court therefore granted Nexans’ motion to enjoin the prosecution of the Indiana action. Id. at 13-14.