**United States Court of Appeals for the Federal Circuit**

03-1572

LABORATORY CORPORATION OF AMERICA HOLDINGS,

LABORATORY CORPORATION OF AMERICA,

and NATIONAL GENETICS INSTITUTE,

> Plaintiffs-Appellees,

v\.

CHIRON CORPORATION,

> Defendant-Appellant.

[Stephen S. Rabinowitz]{.underline}, Fried, Frank, Harris, Shriver &
Jacobson LLP, of New York, New York, argued for plaintiffs-appellees.
With him on the brief was [James W. Dabney]{.underline}.

[Richard G. Greco]{.underline}, Kaye Scholer LLP, of New York, New York,
argued for defendant-appellant.

Appealed from: United States District Court for the District of Delaware

Judge Sue L. Robinson

United States Court of Appeals for the Federal Circuit

03-1572

LABORATORY CORPORATION OF AMERICA HOLDINGS,

LABORATORY CORPORATION OF AMERICA,

and NATIONAL GENETICS INSTITUTE,

> Plaintiffs-Appellees,

v\.

CHIRON CORPORATION,

> Defendant-Appellant.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DECIDED: September 30, 2004

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Before MICHEL, GAJARSA, and LINN, [Circuit Judges]{.underline}.

LINN, [Circuit Judge]{.underline}.

Chiron Corporation ("Chiron") appeals from a decision of the United
States District Court for the District of Delaware ("district court")
granting a motion brought by Laboratory Corporation of America Holdings,
Laboratory Corporation of America, and National Genetics Institute
(collectively, "LabCorp") to enjoin Chiron from prosecuting a parallel
litigation co-pending in the United States District Court for the
Northern District of California. [Lab. Corp. of Am. Holdings v. Chiron
Corp.]{.underline}, No. 03‑364‑SLR (D. Del. Aug. 4, 2003)
("[Order]{.underline}"). Because the district court did not abuse its
discretion in granting the motion to enjoin Chiron from maintaining the
co-pending litigation in the Northern District of California, we affirm.

I. BACKGROUND

Chiron developed nucleic acid testing methods for detecting Hepatitis C
virus in human blood and blood products. [See, e.g.]{.underline}, U.S.
Patent No. 5,712,088. Chiron owns several U.S. patents related to
various aspects of its Hepatitis C virus-related inventions, including
U.S. Patent Nos. 5,712,088; 5,714,596; 5,863,719; and 6,074,816 at issue
in litigations filed in both the District of Delaware and the Northern
District of California. LabCorp supplies nucleic acid testing products
for detecting the presence and quantity of Hepatitis C virus and
performs Hepatitis C virus nucleic acid tests at its facility in North
Carolina.

On November 21, 2002, Chiron informed LabCorp that it would file a
patent infringement complaint against LabCorp the same day unless
LabCorp signed a standstill agreement and undertook licensing
negotiations. LabCorp executed a First Standstill Agreement that day.
The parties subsequently executed a Second Standstill Agreement, which
expired in early April 2003.

Negotiations and discussions continued between the parties about
extending the Second Standstill Agreement, but were unsuccessful. After
LabCorp failed to sign a proposed extension, Chiron filed suit against
LabCorp in the United States District Court for the Northern District of
California ("California action"). The California action was docketed as
having been filed on April 9, 2003 at 5:50 P.M. PST, or 8:50 P.M. EST.
On that same day, unbeknownst to Chiron, LabCorp had earlier filed a
declaratory judgment lawsuit against Chiron in the United States
District Court for the District of Delaware ("Delaware action"). The
Delaware action was docketed as having been filed on April 9, 2003 at
4:27 P.M. EST, approximately four hours before the California action was
filed in the Northern District of California. The same patents are in
dispute in both cases.

LabCorp brought a motion in the Delaware district court to enjoin the
California action. Chiron responded with a cross-motion to dismiss,
stay, or transfer the Delaware action. The Delaware district court
granted LabCorp's motion and denied Chiron's cross-motion. Chiron
appealed the grant of the motion to enjoin the California action, but
did not appeal the denial of its cross-motion to dismiss, stay, or
transfer the Delaware action.

II\. ANALYSIS

A. [Threshold Issues]{.underline}

The unique nature of this court's jurisdiction in patent cases often
requires the court to consider whether to apply regional circuit law or
Federal Circuit law to particular issues presented. In many cases, the
choice is not critical, given the uniformity of federal jurisprudence
governing much of the law. But for some issues, there are meaningful
differences that require us to decide which law governs.

Here, we are called upon to decide between Federal Circuit and Third
Circuit law on threshold issues affecting our jurisdiction over this
appeal. As noted above, this is an appeal by Chiron from the grant by
the Delaware district court of LabCorp's motion to enjoin Chiron's
prosecution of the parallel action filed by Chiron in California four
hours after the Delaware action. For clarity, when we speak of "parallel
actions," we are referring to co-pending patent infringement and
declaratory judgment actions involving the same patents and the same
parties. Chiron contends that Federal Circuit law governs and that under
the law of this circuit, the grant of an injunction against a parallel
action is immediately appealable under 28 U.S.C. § 1292(a)(1). LabCorp
counters that regional circuit law governs and that under the law of the
Third Circuit, the grant of the motion to enjoin the parallel action is
interlocutory, is reviewable only by petition for writ of mandamus, and
is not ripe for appellate review.

1\. [Applicable Law]{.underline}

Section 1292(a)(1) provides:

> \[T\]he courts of appeals shall have jurisdiction of appeals
> from . . . Interlocutory orders of the district courts of the United
> States . . . granting, continuing, modifying, refusing or dissolving
> injunctions, or refusing to dissolve or modify injunctions . . . .

28 U.S.C. § 1292(a)(1) (2000).

Although the plain language of the statute appears to be both
unambiguous and compelling, there is a circuit split concerning whether
injunctions enjoining co-pending actions in other courts are appealable
under 28 U.S.C. § 1292(a)(1). [See]{.underline} 19 James Wm. Moore et
al., [Moore's Federal Practice]{.underline} § 203.10\[6\]\[b\]\[i\], at
203‑38 & n.85 (Matthew Bender 3d ed. 2004) ("[Moore's Federal
Practice]{.underline}"); [HBE Leasing Corp. v. Frank]{.underline}, 48
F.3d 623, 632 n.6 (2d Cir. 1995) (observing the circuit split). Several
courts of appeals, including this court and the Second, Fifth, and Tenth
Circuits, have concluded that injunctions against co-pending litigation
in other district courts are appealable under section 1292(a)(1). [See,
e.g.]{.underline}, [Katz v. Lear Siegler, Inc.]{.underline}, 909 F.2d
1459, 1461 (Fed. Cir. 1990) ("\[T\]he grant of an injunction against
continuing suit in another forum is appealable as of right, 28 U.S.C.
§ 1292(a) . . . ."); [Klein v. Adams & Peck]{.underline}, 436 F.2d 337,
339 (2d Cir. 1971) ("Because \[the district court\]'s directive is an
injunction which unconditionally bars plaintiff from proceeding in his
other actions, that order is a decision from which appeal may be
taken."); [Phillips v. Chas. Schreiner Bank]{.underline}, 894 F.2d 127,
130 (5th Cir. 1990) ("\[T\]his circuit has long recognized a clean
distinction between injunctions prohibiting proceedings in other courts,
which are appealable, and orders, whether or not styled 'injunctions,'
that control proceedings only in the court that issues the order. Thus,
if a district court acts to halt proceedings in another court, its
action is indeed an injunction within the meaning of section
1292(a)(1) . . . ." (internal citation, brackets, and quotation marks
omitted)); [MAI Basic Four, Inc. v. Basis, Inc.]{.underline}, 962 F.2d
978, 981 (10th Cir. 1992) ("Since \[[Baltimore Contractors v.
Bodinger]{.underline}, 348 U.S. 176 (1955)\], the courts of appeals have
generally adopted a per se rule for dealing with orders like the instant
one, holding that an order that prohibits a party from pursuing
litigation in another court is unquestionably an injunction for purposes
of interlocutory appeal under 28 U.S.C.A. § 1292(a)(1)." (internal
quotation marks omitted)); [FDIC v. Geldermann, Inc.]{.underline}, 975
F.2d 695, 697 (10th Cir. 1992) (quoting and following [MAI Basic
Four]{.underline}, 962 F.2d at 981). By contrast, the Third Circuit in
[Hershey Foods Corp. v. Hershey Creamery Co.]{.underline}, 945 F.2d 1272
(3d Cir. 1991), has held that an order barring the defendant from
pursuing related litigation in a different forum is not appealable
because it is in essence a venue determination that does not affect the
substance of the dispute. [Id.]{.underline} at 1278-79.

LabCorp relies on [Katz v. Lear Siegler, Inc.]{.underline}, 909 F.2d
1459 (Fed. Cir. 1990), to argue that an appeal from an injunction is a
procedural issue not unique to patent law and that we should apply the
law of the Third Circuit. LabCorp argues that because an order enjoining
a parallel action is only appealable in the Third Circuit via a writ of
mandamus, which Chiron has not sought, this court must dismiss the
appeal. Chiron responds that under this court's precedent in [Genentech,
Inc. v. Eli Lilly & Co.]{.underline}, 998 F.2d 931 (Fed. Cir. 1993),
[overruled in part on other grounds by]{.underline}, [Wilton v. Seven
Falls Co.]{.underline}, 515 U.S. 277, 289 (1995), Federal Circuit law
controls and that this court has jurisdiction under 28 U.S.C.
§ 1292(a)(1).

In [Katz]{.underline}, this court reviewed an order granted by the
District of Massachusetts enjoining a patent owner from prosecuting two
other pending actions against different defendants in the Western
District of New York. 909 F.2d at 1461. [Katz]{.underline} used the
abuse of discretion standard of review, stating simply that the court
was "\[a\]pplying the law of the First Circuit." [Id.]{.underline} at
1462 (citing [Mass. Ass'n of Older Ams. v. Sharp]{.underline}, 700 F.2d
749, 751 (1st Cir. 1983); [Planned Parenthood League of Mass. v.
Bellotti]{.underline}, 641 F.2d 1006, 1009 (1st Cir. 1981)). In
[Katz]{.underline}, the application of the abuse of discretion standard
was not controversial. This standard has been recognized to be generally
applied by federal courts of appeals in reviewing the grant or denial of
injunctive relief. 19 [Moore's Federal Practice]{.underline} § 206.08,
at 206-44.1 to 206-44.2 & n.12 (noting that the grant or denial of
injunctive relief in the federal courts of appeals are reviewed for an
abuse of discretion). The statement in [Katz]{.underline} that the court
was "\[a\]pplying the law of the First Circuit," 909 F.2d at 1462, was
not accompanied by an analysis or discussion of the policy issues
relevant to the choice of law where there are material differences in
Federal Circuit and regional circuit precedent. Furthermore,
[Katz]{.underline} is silent on choice of law considerations when
discussing the issue being disputed here, namely appealability under
section 1292(a)(1). [See]{.underline} [Katz]{.underline}, 909 F.2d at
1461 (holding that "the grant of an injunction against continuing suit
in another forum is appealable as of right, 28 U.S.C. § 1292(a),"
without any choice of law discussion whatsoever). Thus, the reference to
First Circuit law in [Katz]{.underline} regarding the widely applied
abuse of discretion standard of review should not be read to foreclose
consideration of the important policy factors dictating the choice of
law in cases in which the regional circuit applies a different standard
than the Federal Circuit.

In this case, the decision whether to follow Federal Circuit or Third
Circuit law is critical: as we have previously observed, the Third
Circuit has held that injunctions against litigation in other forums are
not appealable, while under Federal Circuit law such injunctions are
appealable under 28 U.S.C. § 1292(a)(1). Thus, we must decide which law
applies. In deciding the applicable law, we held in the first case to
address the issue that "the Federal Circuit shall review procedural
matters, that are not unique to patent issues, under the law of the
particular regional circuit court where appeals from the district court
would normally lie." [Panduit Corp. v. All States Plastic Mfg.
Co.]{.underline}, 744 F.2d 1564, 1574-75 (Fed. Cir. 1984), [overruled on
other grounds by]{.underline}, [Richardson-Merrell Inc. v.
Koller]{.underline}, 472 U.S. 424 (1985). More recently, this court
articulated the rule in the following way:

> We have held that a procedural issue that is not itself a substantive
> patent law issue is nonetheless governed by Federal Circuit law if the
> issue pertains to patent law, if it bears an essential relationship to
> matters committed to our exclusive control by statute, or if it
> clearly implicates the jurisprudential responsibilities of this court
> in a field within its exclusive jurisdiction.

[Midwest Indus., Inc. v. Karavan Trailers, Inc.]{.underline}, 175 F.3d
1356, 1359 (Fed. Cir. 1999) (en banc in relevant part) (internal
citations and quotation marks omitted); [see also]{.underline}
[Flex-Foot, Inc. v. CRP, Inc.]{.underline}, 238 F.3d 1362, 1365 (Fed.
Cir. 2001) ("We answer this question on an issue by issue basis, and
will apply the law of the regional circuit to which the district court
appeal normally lies unless 'the issue pertains to or is unique to
patent law,' in which case we will apply our own law to both substantive
and procedural issues 'intimately involved in the substance of
enforcement of the patent right.'") (quoting [Amana Refrigeration, Inc.
v. Quadlux, Inc.]{.underline}, 172 F.3d 852, 855-56 (Fed. Cir. 1999)).

In [Genentech]{.underline}, this court discussed the choice of law rule
in a factual context quite similar to this case. In that case, Genentech
filed a declaratory judgment patent action against Eli Lilly and the
University of California in the Southern District of Indiana. 998 F.2d
at 935. One day later, the University of California filed a patent
infringement suit against Genentech in the Northern District of
California. [Id.]{.underline} The University moved in the Indiana court
to dismiss Genentech's declaratory judgment action. [Id.]{.underline}
The court granted that motion. [Id.]{.underline} On appeal, this court
considered whether regional circuit or Federal Circuit law applied to
"\[t\]he question of whether a properly brought declaratory action to
determine patent rights should yield to a later-filed suit for patent
infringement." [Id.]{.underline} at 937. The court considered and
analyzed the applicable factors and concluded that:

> The question of whether a properly brought declaratory action to
> determine patent rights should yield to a later-filed suit for patent
> infringement raises the issue of national uniformity in patent cases,
> and invokes the special obligation of the Federal Circuit to avoid
> creating opportunities for dispositive differences among the regional
> circuits. Thus, although the Federal Circuit applies the procedural
> law of the regional circuit in matters that are not unique to patent
> law, and although matters of procedure do not always carry substantive
> weight, the regional circuit practice need not control when the
> question is important to national uniformity in patent practice.

[Id.]{.underline} (internal citation omitted).

Our conclusion that Federal Circuit law applies is consistent with this
court's holding in [Woodard v. Sage Products, Inc.]{.underline}, 818
F.2d 841, 844 (Fed. Cir. 1987) (en banc), that

> \[w\]hile in some matters of procedural or substantive law this
> circuit has concluded that we will follow the law as interpreted by
> the circuit in which the district court is located, such deference is
> inappropriate on issues of our own appellate jurisdiction. This court
> has the duty to determine its jurisdiction and to satisfy itself that
> an appeal is properly before it.

(internal citation omitted). Moreover, the articulation of our rule and
the rationale for its application in [Genentech]{.underline} are
consistent with our precedent governing the review of the grant or
denial in other cases of injunctions directed to substantive issues in
patent cases under Federal Circuit law. [See, e.g.]{.underline}, [Int'l
Rectifier Corp. v. Samsung Elecs. Co.]{.underline}, 361 F.3d 1355, 1359
(Fed. Cir. 2004) ("\[T\]his court reviews a district court's decision
granting, denying, or modifying an injunction, in a patent case . . .
applying Federal Circuit law."); [Tex. Instruments Inc. v. Tessera,
Inc.]{.underline}, 231 F.3d 1325, 1328 (Fed. Cir. 2000) ("Under Federal
Circuit law, this court sustains a grant or denial of a preliminary
injunction unless the district court abused its discretion, or based its
decision on an erroneous legal standard or clearly erroneous findings of
fact."). Accordingly, and because of the importance of national
uniformity in patent cases, we hold that injunctions arbitrating between
co-pending patent declaratory judgment and infringement cases in
different district courts are reviewed under the law of the Federal
Circuit.

2\. [Jurisdiction]{.underline}

Under Federal Circuit law, an injunction against continuing litigation
in another forum is recognized as being immediately appealable under
section 1292(a)(1). [See]{.underline} [Katz]{.underline}, 909 F.2d at
1461 (noting that "the grant of an injunction against continuing suit in
another forum is appealable as of right, 28 U.S.C. § 1292(a)"); [see
also]{.underline} 19 [Moore's Federal Practice]{.underline}
§ 203.10\[6\]\[b\]\[i\], at 203‑38 ("An order that prohibits further
litigation in another court is an injunction that is appealable
immediately.").

Here, the district court granted LabCorp's motion "to enjoin certain
litigation currently pending in the Northern District of California."
[Order]{.underline}, slip op. at 1. The district court's order had the
effect of prohibiting Chiron from pursuing the currently pending
California action. Such order is an injunction against continuing
litigation. Having decided that Federal Circuit law applies, and having
determined that an injunction restraining a parallel, related patent
action is immediately appealable under the law of this circuit, we
conclude that we have jurisdiction over the present appeal pursuant to
28 U.S.C. § 1292(a)(1).

B. [Standard of Review]{.underline}

"\[T\]his court reviews a district court's decision granting, denying,
or modifying an injunction, in a patent case, for abuse of discretion,
applying Federal Circuit law." [Int'l Rectifier]{.underline}, 361 F.3d
at 1359; [see also]{.underline} [Tegal Corp. v. Tokyo Electron Am.,
Inc.]{.underline}, 257 F.3d 1331, 1351 (Fed. Cir. 2001) ("\[W\]e review
a district court's decision to grant an injunction and the scope of that
injunction for abuse of discretion."). "An abuse of discretion may be
established under Federal Circuit law by showing that the court made a
clear error of judgment in weighing the relevant factors or exercised
its discretion based on an error of law or clearly erroneous fact
finding." [Int'l Rectifier]{.underline}, 361 F.3d at 1359 (citing [Joy
Techs., Inc. v. Flakt, Inc.]{.underline}, 6 F.3d 770, 772 (Fed. Cir.
1993)); [see also]{.underline} [Amazon.com, Inc. v. Barnesandnoble.com,
Inc.]{.underline}, 239 F.3d 1343, 1350 (Fed. Cir. 2001).

C. [Order Enjoining California Action]{.underline}

The district court's order enjoining the California litigation states in
relevant part:

> IT IS ORDERED that plaintiffs' motion \[to enjoin certain litigation
> currently pending in the Northern District of California\] is
> granted . . . . The Delaware action was first filed; the parties are
> Delaware corporations; the parties conduct business on a national
> basis, including in Delaware; and the prior California litigation
> involving some of the patents in issue was filed in 1998, resolved by
> settlement and was not filed against plaintiffs.

[Order]{.underline}, slip op. at 1 (emphasis in original omitted).

Chiron argues that the district court improperly ignored the Second
Standstill Agreement by enjoining the California action, and that this
was an error of law that itself requires reversal of the district
court's injunction. Chiron also presents several grounds upon which it
alleges the district court abused its discretion. First, Chiron alleges
that the district court abused its discretion in allowing LabCorp to
file an anticipatory declaratory judgment action in an effort to forum
shop in abuse of the Declaratory Judgment Act. Second, Chiron argues the
district court should have respected an earlier ruling by the Northern
District of California that the current California action was related to
some prior litigation in that court. Third, Chiron contends that the
district court abused its discretion by disregarding "the many facts
militating in favor" of California as the proper forum for handling the
parties' dispute, including that California "has by far the greatest
connection to the events in dispute." Finally, Chiron suggests that the
district court erred in its conclusion that LabCorp filed "first," even
though LabCorp's complaint was filed four hours before Chiron's
complaint, because the two actions were filed on the same day and
consequently should be treated as filed simultaneously.

We agree with LabCorp that Chiron fails to point out a clear error of
judgment, error of law, or clearly erroneous factual finding underlying
the district court's decision to enjoin the California action.
[See]{.underline} [Int'l Rectifier]{.underline}, 361 F.3d at 1359.
Instead, Chiron principally argues that the district court's failure to
mention the Second Standstill Agreement was an error of law meriting
reversal. Although Chiron relies heavily on LabCorp's alleged breach of
the parties' Second Standstill Agreement, the language barring LabCorp
from filing any action "until five days after the date on which this
Agreement terminates" is ambiguous at best. It is hard to conclude that
the district court abused its discretion in not finding that agreement
to be a barrier to the action. Moreover, the alleged breach of the
Second Standstill Agreement is more relevant to Chiron's motion to
dismiss, stay, or transfer the Delaware action than it is to LabCorp's
motion to enjoin the California action. Chiron concedes that the
district court should have dismissed the Delaware action if it found a
breach of the Second Standstill Agreement. [See]{.underline} Appellant's
Br. at 12 ("The district court should have enforced the standstill
agreement by dismissing the Delaware Action . . . ."). However, Chiron
did not appeal the denial of its motion to dismiss, stay, or transfer
the Delaware action. Finally, the fact that the district court did not
discuss the Second Standstill Agreement in its order granting the
injunction does not necessarily mean it was not considered.

As to the remainder of Chiron's arguments---that the district court
ignored, [inter]{.underline} [alia]{.underline}, Northern California's
alleged greater connection to the disputed events and an earlier ruling
by the California court that the subject of the parties' dispute is
related to prior litigation in California---we find no abuse of
discretion. The district court addressed these arguments when it found
"the parties are Delaware corporations; the parties conduct business on
a national basis, including in Delaware" and "the prior California
litigation involving some of the patents in issue was filed in 1998,
resolved by settlement and was not filed against plaintiffs."
[Order]{.underline}, slip op. at 1. In none of its arguments does Chiron
allege that the district court made clearly erroneous factual findings.
Chiron is effectively inviting this court to review the district court's
determination [de]{.underline} [novo]{.underline} and to substitute our
judgment for that of the district court, an invitation we decline to
accept. District courts are granted broad latitude in managing the cases
before them. We decline to find an abuse of discretion when the district
court made an informed determination as to how it would manage the
litigation pending before it based on sound reasoning and identified
facts. [See]{.underline} [McGinley v. Franklin Sports,
Inc.]{.underline}, 262 F.3d 1339, 1357 (Fed. Cir. 2001) (observing that
"\[t\]rial courts are given broad latitude in managing and scheduling
cases" and finding no abuse of discretion in the district court's denial
of a motion for leave to join a party).

After fully considering Chiron's arguments, we find no reason to
conclude that the district court abused its discretion in enjoining the
parallel California action.

III\. CONCLUSION

Because the district court did not abuse its discretion in granting
LabCorp's motion to enjoin the parallel litigation in the Northern
District of California, the district court's decision is

[AFFIRMED]{.underline}.