Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_07-cv-00063/USCOURTS-cand-4_07-cv-00063-1/pdf.json

Parties Involved:
California Institute of Technology
Defendant
Intuitive Surgical, Inc.
Plaintiff

Document Text:

United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

INTUITIVE SURGICAL, INC.,

Plaintiff,

 v.

CALIFORNIA INSTITUTE OF TECHNOLOGY,

Defendant. /

No. C07-0063-CW

ORDER GRANTING

DEFENDANT'S MOTION TO

STAY AND DENYING

DEFENDANT'S MOTION TO

DISMISS OR TRANSFER

Defendant California Institute of Technology (Caltech) moves

to dismiss or stay this action, or in the alternative, to transfer

it to the Eastern District of Texas. Plaintiff Intuitive Surgery,

Inc. (Intuitive) opposes the motion. The matter was heard on April

13, 2007. Having considered all of the papers filed by the parties

and oral argument on the motions, the Court GRANTS the motion to

stay and DENIES without prejudice the motion to dismiss or

transfer. 

BACKGROUND

The parties to this action had a meeting on January 4, 2007. 

According to Caltech, the purpose of the meeting was to offer

Intuitive an opportunity to license four of Caltech's patents. 

DePumpo Decl., Ex. 1 (November 17, 2006, letter from DePumpo to

Intuitive). According to Intuitive, at the meeting Caltech made

allegations of patent infringement and threatened an immediate

lawsuit in Texas unless Intuitive consented to jurisdiction in that

forum. Guthart Decl. ¶ 8. The meeting was apparently

Case 4:07-cv-00063-CW Document 51 Filed 04/18/07 Page 1 of 7
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unsuccessful. 

That same day, Caltech sued Intuitive in the Eastern District

of Texas, Case No. 6:07-CV-4, for allegedly infringing four of its

patents which describe and claim robot-assisted microsurgery

systems. DePumpo Decl., Ex. 2 (Docket in Case No. 6:07-CV-4). The

Texas suit was filed at 3:42 p.m. Central Standard Time (CST) (1:42

p.m. Pacific Standard Time (PST)). Id. Caltech asserted that

Intuitive infringed its patents by making, using, selling, offering

for sale, and/or importing into the United States products that

fall within the scope of the claims of its patents. DePumpo Decl.,

Ex. 3 (Complaint in Case No. 6:07-CV-4). 

Later that afternoon, Intuitive filed the present action

seeking a declaratory judgment that (1) Intuitive's surgical

robotic products do not infringe the same four patents, and 

(2) those patents are invalid and/or unenforceable. Compl. ¶ 5. 

Both parties acknowledge that Intuitive filed suit a few hours

after Caltech. Intuitive asserts that it intends to move to

transfer the Texas action to this Court, but that it has not done

so pending this Court's ruling on Caltech's motion to dismiss, stay

or transfer. 

DISCUSSION

Caltech argues that the first-to-file rule warrants a

dismissal or stay of this action because it filed the Texas suit

before Intuitive filed this action, and the parties and issues in

both cases are identical. Caltech further argues that any

balancing of convenience factors should be done by the court

presiding over the first-filed case. In the alternative, Caltech

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requests that this action be transferred to the Eastern District of

Texas, pursuant to 28 U.S.C. § 1404(a). 

Intuitive counters that the first-to-file rule should not

apply because it filed suit just two hours after Caltech, and that

if the first-to-file rule does apply, an exception is warranted

because Caltech engaged in forum shopping. Intuitive also contends

that transfer is improper both because Intuitive could not have

brought the original action in the Eastern District of Texas, and

because the balance of convenience factors favors proceeding in the

Northern District of California.

I. First-To-File Rule

"There is a generally recognized doctrine of federal comity

which permits a district court to decline jurisdiction over an

action when a complaint involving the same parties and issues has

already been filed in another district." Pacesetter Systems, Inc.

v. Medtronic, Inc., 678 F.2d 93, 94-5 (9th Cir. 1982). This

doctrine, known as the first-to-file rule, "gives priority, for

purposes of choosing among possible venues when parallel litigation

has been instituted in separate courts, to the party who first

establishes jurisdiction." Northwest Airlines, Inc. v. American

Airlines, Inc., 989 F.2d 1002, 1006 (8th Cir. 1993). The rule

“serves the purpose of promoting efficiency well and should not be

disregarded lightly.” Church of Scientology of California v.

United States Dep’t of Army, 611 F.2d 738, 750 (9th Cir. 1979). 

However, "the considerations affecting transfer to or dismissal in

favor of another forum do not change simply because the first-filed

action is a declaratory action." Genentech, Inc. v. Eli Lilly &

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Co., 998 F.2d 931, 938 (Fed. Cir. 1993). 

In applying the first-to-file rule, a court looks to three

threshold factors: "(1) the chronology of the two actions; (2) the

similarity of the parties, and (3) the similarity of the issues." 

Z-Line Designs, Inc. v. Bell'O Int'l LLC, 218 F.R.D. 663, 665 (N.D.

Cal. 2003). If the first-to-file rule does apply to a suit, the

court in which the second suit was filed may transfer, stay or

dismiss the proceeding in order to allow the court in which the

first suit was filed to decide whether to try the case. Alltrade,

Inc. v. Uniweld Products, Inc., 946 F.2d 622, 622 (9th Cir. 1991). 

"Circumstances under which an exception to the first-to-file rule

typically will be made include bad faith, anticipatory suit and

forum shopping." Id. at 628 (internal citations omitted). 

One exception to the first-to-file rule is when "the balance

of convenience weighs in favor of the later-filed action." Ward v.

Follett Corp., 158 F.R.D. 645, 648 (N.D. Cal. 1994). This is

analogous to the "convenience of parties and witnesses" under a

transfer of venue motion, 28 U.S.C. § 1404(a). Med-Tec Iowa, Inc.

v. Nomos Corp., 76 F. Supp. 2d 962, 970 (N.D. Iowa 1999);

800-Flowers, Inc. v. Intercontinental Florist, Inc., 860 F. Supp.

128, 133 (S.D.N.Y. 1994). The court with the first-filed action

should normally weigh the balance of convenience. Alltrade Inc.,

946 F.2d at 628.

A. Chronology of the Two Actions

The central question is whether the first-to-file rule applies

when two actions are filed a few hours apart. Caltech argues that

application of the first-to-file rule does not depend on the amount

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of time between the two filings, and asserts that its attempt to

negotiate with Intuitive before filing suit was the only reason the

suits were filed nearly simultaneously. Intuitive avers that the

first-to-file rule is typically applied when the second-filed

action occurs days or weeks later, and that the rule should not be

used to reward Caltech's race to the "wrong" courthouse.

The policy rationale behind the first-to-file rule is

supported by reasons "just as valid when applied to the situation

where one suit precedes the other by a day as they are in a case

where a year intervenes between the suits." Genentech, 998 F.2d at

938. Nonetheless, at least one court in this district has held

that the first-to-file rule is "not dispositive" when the firstfiled action precedes the second-filed action by mere hours. 

Nordson Corp. v. Speedline Techs., Inc., 2000 U.S. Dist. LEXIS

15240, at *7 (N.D. Cal. Oct. 10, 2000). In that case, the

California plaintiff was the patent holder, and the allegedly

infringing defendant filed a declaratory judgment action in the

District of Massachusetts just three hours before the plaintiff's

patent infringement suit was filed in this district. Id. at *3. 

Although the court elected to transfer the case to the first-filed

forum, the court found that the close proximity of the filings

rendered that fact "not dispositive," and transferred on the basis

of convenience to the parties and witnesses. Id. at *7. 

The Court finds that the first-to-file rule is applicable and

requires deference to the first-filed court, notwithstanding the

near simultaneous nature of the filings. The Court is persuaded

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 1 The Court also grants Caltech's motion to file a

supplement to its reply (Docket No. 46), and takes judicial

notice of the scheduled proceedings in the Eastern District

of Texas. 

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that applying the first-to-file rule in this case furthers the

sound policy rationale underlying it. Not to apply the rule in

situations like this one would discourage potential plaintiffs from

attempting settlement discussions prior to filing lawsuits out of

fear that they might not secure their preferred forum. 

As stated above, the court in the first-filed action should

decide whether there is an exception to the first-to-file rule. 

Therefore, this Court will not address Intuitive's arguments that

Caltech engaged in forum shopping, or that a balancing of

convenience factors weighs in favor of litigating in Northern

California. The Court defers to the Eastern District of Texas to

decide the appropriate forum and whether an exception to the firstto-file rule is applicable. See Pacesetter, 678 F.2d at 96 (noting

that normally the respective convenience of the two courts should

be addressed to the court in the first-filed action). 

CONCLUSION

For the foregoing reasons, the Court GRANTS Caltech's motion

to stay this action and DENIES without prejudice its motion to

dismiss or transfer (Docket No. 20) pending the Texas court's

ruling on Intuitive's anticipated motion to transfer that

litigation to this Court.1

 If Intuitive does not file a motion to

transfer in Texas within ten days, or if the Texas court denies

Intuitive's motion to transfer, Caltech may re-file its motion to

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transfer and the Court will transfer this case to Texas. If the

Texas case is transferred to this district, the parties shall file

a notice of related cases and this Court will relate and

consolidate the cases and apply the scheduling order to the

consolidated case. 

IT IS SO ORDERED.

Dated: 4/18/07 

CLAUDIA WILKEN

United States District Judge

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