Monday, April 1, 2013

First-to-file rule is alive and well

AAMP of Florida owns U.S. Patent 8,014,540 entitled "Remote Control Interface For Replacement Vehicle Stereos."  AAMP is currently asserting the '540 Patent (and another) against Metra Electronics Corporation here in the Middle District.  AAMP sent a cease and desist letter to another company -- Crux Interfacing Solutions -- located in California.  The risk of doing so, of course, is that the California company will respond to the letter by filing its own lawsuit for a declaratory judgment of noninfringement/invalidity in its jurisdiction.  That's exactly what happened here, with Crux filing suit first in California.

AAMP responded quickly, filing its own patent infringement lawsuit against CRUX in Tampa ten days later.  Expectedly, Crux asked to dismiss this second filed case, or transfer it over to California where Crux's declaratory judgment action had been pending for ten days longer.

AAMP asked the Court to recognize the exception to the first-to-file rule when a party files a declaratory judgment action in an attempt to preempt a soon-to-be-plaintiff's chosen forum.  While the Court agreed that such an activity is an equitable consideration that must be considered in figuring out which of the two forums should handle the dispute, the Court recognized that the decision was in the hands of the Court handling the first case filed:
But, whatever merit there may be in AAMP's contention that Crux's California action falls within this "anticipatory declaratory judgment" exception to the first filed rule -- an issue upon which this Court expresses no opinion -- this Court finds that such a determination should be reached by the United States District Court for the Central District of California.  [Marietta Drapery & Window Coverings Co., Inc. v. N. River Ins. Co., 486 F.Supp.2d 1366, 1369 (N.D. Ga. 2007).]
"The 'first to file' rule not only determines which court may decide the merits of substantially similar issues, but also establishes which court may decide whether the second suit filed must be dismissed, stayed or transferred and consolidated." (citation omitted)
Thus, the case has to go to California to let that Court determine which of the two cases will go forward.  Perhaps it will come back.  We'll wait and see.

Motion to Dismiss, or in the Alternative, Transfer, Granted in Part.

AAMP of Florida, Inc. v. Audionics System, Inc., Case No. 8:12-cv-2922 (M.D. Fla. Mar. 18, 2013) (J. Covington)

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