Court Opinion

ID: 4542387
Source: CourtListenerOpinion
Date Created: 2020-06-18 16:00:35.980934+00
Date Added: 2024-06-11T12:47:40.648782
License: Public Domain

Case: 20-123    Document: 16     Page: 1    Filed: 06/18/2020

           NOTE: This order is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

  In re: SEATTLE SPINCO, INC., MICRO FOCUS
 LLC, MICRO FOCUS INTERACTIVE ISRAEL LTD.,
 MICRO FOCUS GOVERNMENT SOLUTIONS LLC,
            MICRO FOCUS (US) INC.,
                    Petitioners
              ______________________

                         2020-123
                  ______________________

    On Petition for Writ of Mandamus to the United States
District Court for the Eastern District of Texas in No. 4:18-
cv-00469-ALM, Judge Amos L. Mazzant III.
                  ______________________

                      ON PETITION
                  ______________________

 Before O’MALLEY, WALLACH, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
                        ORDER
    Petitioners Seattle SpinCo, Inc. et al. (collectively,
“SSI”) petition for a writ of mandamus directing the United
States District Court for the Eastern District of Texas to
transfer this case to the United States District Court for
the District of Delaware. Wapp Tech Limited Partnership
and Wapp Tech Corp. (collectively, “Wapp”) oppose. We
deny the petition.
Case: 20-123    Document: 16     Page: 2    Filed: 06/18/2020

2                                 IN RE: SEATTLE SPINCO, INC.

                       BACKGROUND
     In July 2018, Wapp filed this suit in the Eastern Dis-
trict of Texas against Micro Focus International plc (“MF
plc”). The complaint alleged that MF plc, a software com-
pany headquartered in the United Kingdom, infringed
three of Wapp’s patents by making, using, selling, and of-
fering for sale certain accused software products.
    On October 15, 2018, two of MF plc’s U.S. subsidiaries,
Seattle SpinCo, Inc. and Micro Focus LLC, filed a declara-
tory judgment action in the District of Delaware, seeking
judgments that the same Wapp patents that were asserted
in the Texas action were invalid and that the accused soft-
ware did not infringe those patents.
     Back in the Texas action, MF plc moved to dismiss for
lack of personal jurisdiction, arguing that MF plc is a for-
eign corporation without ties to Texas. The Texas court
ordered jurisdictional discovery. On June 10, 2019, Wapp
filed a motion for leave to file an amended complaint to add
five subsidiaries of MF plc as defendants.
    In August 2019, the Texas court granted MF plc’s mo-
tion to dismiss upon finding that MF plc, the sole defendant
in the case at the time, was not subject to personal juris-
diction in Texas. In the same order, however, the court
granted leave for Wapp to amend the complaint to remove
allegations against MF plc and to add the five subsidiaries
of MF plc (petitioners here).
    MF plc then filed a motion to transfer the Texas action
to Delaware, invoking the first-to-file rule, and argued that
the Delaware action and not the Texas action should be
considered the first-filed because it was the first court to
obtain personal jurisdiction over the parties.
     The Texas court denied the motion to transfer, finding
that “[t]he argument’s threshold premise—that the Court
could not possess this controversy for purposes of the first-
to-file rule until the date of the amended complaint because
Case: 20-123     Document: 16      Page: 3     Filed: 06/18/2020

IN RE: SEATTLE SPINCO, INC.                                         3

it did not have personal jurisdiction over [MF plc]—is erro-
neous.” This petition followed.
    We note that the Texas court recently issued its claim
construction order. See Wapp Tech Ltd. P’ship v. Micro Fo-
cus Int’l PLC, No. 4:18-cv-00469-ALM, ECF No. 176 (Apr.
27, 2020). Meanwhile, the Delaware court has stayed its
action, noting its belief that “[i]t certainly looks like the
case in Texas is the first filed case.”
                         DISCUSSION
    A writ of mandamus is a “drastic and extraordinary
remedy reserved for really extraordinary causes.” Cheney
v. U.S. Dist. Court for Dist. of Columbia, 542 U.S. 367, 380
(2004) (internal quotation marks and citation omitted). A
petitioner must satisfy three requirements: (1) the peti-
tioner must “have no other adequate means to attain the
relief” desired; (2) the petitioner must show that the “right
to issuance of the writ is clear and indisputable”; and (3)
the petitioner must convince the court that the writ is “ap-
propriate under the circumstances.” Id. at 380–81 (inter-
nal quotation marks and citations omitted).
    SSI cites several cases dealing with the first-to-file
rule, which “generally favors pursuing only the first-filed
action when multiple lawsuits involving the same claims
are filed in different jurisdictions.” Merial Ltd. v. Cipla
Ltd., 681 F.3d 1283, 1299 (Fed. Cir. 2012) (citation omit-
ted); see also West Gulf Mar. Ass’n v. ILA Deep Sea Local
24, 751 F.2d 721, 730 (5th Cir. 1985) (noting that the usual
rule is for the court of first jurisdiction to resolve the issues
when cases before two different federal district courts are
the same or very similar). 1 But SSI cites no appellate court

    1    We need not decide whether to apply regional or
Federal Circuit law in evaluating the district court’s anal-
ysis of the first-to-file rule, as the parties have not shown
any material difference between the circuits here.
Case: 20-123    Document: 16      Page: 4    Filed: 06/18/2020

4                                  IN RE: SEATTLE SPINCO, INC.

case that has held that first-filed status is determined by
which court first secures personal jurisdiction over the par-
ties.
     Nor are we aware of any appellate case that has spoken
of the first-filed rule in such terms. See, e.g., Save Power
Ltd. v. Syntek Fin. Corp., 121 F.3d 947, 950 (5th Cir. 1997)
(emphasizing priority for the court that first “seized of the
issues” (internal quotation marks and citation omitted));
Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 407 (5th Cir.
1971) (explaining generally that “the court initially seized
of a controversy should be the one to decide whether it will
try the case”); see also Penn Gen. Cas. Co. v. Pennsylvania,
294 U.S. 189, 196 (1935) (giving preference to the court
“whose jurisdiction and process are first invoked by the fil-
ing of the bill”); Smith v. McIver, 22 U.S. (9 Wheat.) 532
(1824) (“In all cases of concurrent jurisdiction, the Court
which first has possession of the subject, must decide it con-
clusively.”); see also Cadle Co. v. Whataburger of Alice, Inc.,
174 F.3d 599 (5th Cir. 1999) (refusing to incorporate a ju-
risdictional analysis into the rule).
    At best, SSI has shown that different district courts
have appeared to reach contrasting views on whether to
adopt such an approach. Compare Mallinckrodt Med. Inc.
v. Nycomed Imaging AS, No. 4:98CV444 ERW, 1998 WL
962203, at *5 (E.D. Mo. Nov. 13, 1998) (transferring under
circumstances similar to those in this case); with Advanta
Corp. v. Visa U.S.A., Inc., No. 96-7940, 1997 WL 88906, at
*3 (E.D. Pa. Feb. 19, 1997) (“The first-filed rule turns on
which court first obtains possession of the subject of the
dispute, not the parties of the dispute.”); and Schering
Corp. v. Amgen Inc., 969 F. Supp. 258, 267 (D. Del. 1997)
(“This Court first acquired subject matter jurisdiction over
the dispute in December of 1996. Accordingly, the Dela-
ware action is considered first-filed, regardless of the addi-
tion of a new party in February.”).
Case: 20-123      Document: 16     Page: 5    Filed: 06/18/2020

IN RE: SEATTLE SPINCO, INC.                                        5

    At a minimum, the above-noted disagreement and lack
of precedential support means that SSI’s right to transfer
based on the first-to-file rule is not clear and indisputable.
In addition, the extraordinary nature of the remedy, appar-
ent agreement between the Delaware and Texas courts,
and stay of the Delaware proceedings, belies any need for
this court to give any strong consideration to weighing in
on whether to adopt such a rule here. See Futurewei
Techs., Inc. v. Acacia Research Corp., 737 F.3d 704, 708
(Fed. Cir. 2013) (purpose of the first-to-file rule is to “avoid
conflicting decisions and promote judicial efficiency” (inter-
nal quotation marks and citation omitted)). We therefore
deny SSI’s request for mandamus.
      Accordingly,
      IT IS ORDERED THAT:
      The petition is denied.
                                  FOR THE COURT

          June 18, 2020           /s/ Peter R. Marksteiner
              Date                Peter R. Marksteiner
                                  Clerk of Court
s35