Opinion
Civ. File No. 01-762 (PAM/JGL).
September 11, 2001.
MEMORANDUM AND ORDER
This matter is before the Court on Defendant's Motion to Dismiss or, in the alternative, to Transfer Venue. For the reasons that follow, the Motion is denied.
BACKGROUND
Defendant Microthin.com, Inc. ("Microthin") is the assignee of a patent for an ultra-thin computer mouse pad and a patent for the process for manufacturing that mouse pad. In May 2000, a representative of Microthin visited the Inver Grove Heights plant of Plaintiff Travel Tags, Inc. ("Travel Tags"), which is a wholly owned subsidiary of Plaintiff Taylor Corporation. The purpose of the meeting was to discuss the possibility that Travel Tags might manufacture the ultra-thin mouse pad for which Microthin had a patent.
The parties were unable to reach an agreement. Subsequently, Travel Tags began manufacturing an ultra-thin mouse pad. Believing that Travel Tags' mouse pad infringes Microthin's patent, Microthin sent Travel Tags a cease and desist letter on April 26, 2001. That letter requested that Travel Tags cease the manufacture of the allegedly infringing mouse pad, and stated that, if Travel Tags refused promptly to comply, Microthin would file suit for patent infringement in federal court within ten days of the date of the letter.
Five days after receiving the letter, Plaintiffs filed the instant declaratory judgment action. Plaintiffs seek a declaration that they are not infringing Microthin's patents and a declaration that their actions do not constitute unfair competition or other state-law torts. Two days after Plaintiffs filed this action, Microthin filed a patent infringement action against Plaintiffs in the Northern District of Illinois. Microthin now asks the Court to dismiss this action in favor of the Illinois action, or to transfer the case to Illinois on the basis of forum non conveniens.
A. Motion to Dismiss
The parties dispute the correct standard to be applied to declaratory judgment complaints filed preemptively in patent matters. According to Plaintiffs, the law of the Federal Circuit in Genentech, Inc. v. Eli Lilly Co., 998 F.2d 931 (Fed. Cir. 1993), governs the dispute. InGenentech, the Federal Circuit held that courts in patent cases should prefer the forum of the first-filed action, whether or not that action is a declaratory action or an infringement action. Genentech, 998 F.2d at 937. This preference should maintain unless "considerations of judicial and litigant economy, and the just and effective disposition of disputes, require otherwise." Id.
Microthin asserts that Genentech was overruled by the Supreme Court inWilton v. Seven Falls Co., 515 U.S. 277 (1995). In Wilton, the Court upheld the district court's decision to stay a first-filed declaratory judgment action in favor of parallel state-court litigation. 515 U.S. at 282. In making this determination, the Supreme Court held that the de novo standard of review for declaratory judgment matters was not deferential enough, and overruled contrary precedent, includingGenentech. Id. at 289. Thus, Microthin is correct that Wilton overruled a portion of the holding in Genentech. However, Wilton did not overrule, or even discuss, that part of the holding in Genentech that is relevant to the instant case, namely the Federal Circuit's decision that the first-filed rule should be applied in patent cases. Moreover, Wilton did not involve a patent, but instead involved an insurance coverage dispute. In Wilton, the Supreme Court did not have occasion to revisit the Federal Circuit's substantive decision, nor has the Court done so in the interim. Thus, the relevant holding of Genentech, at least as applied to patent cases, is still good law.
In essence, Microthin contends that this Court should dismiss Plaintiffs' action because, according to Microthin, Plaintiffs have engaged in forum shopping and are attempting to usurp Microthin's choice of forum. The "evidence" in support of this theory is the fact that Plaintiffs filed suit only five days after receiving Microthin's letter threatening suit. However, the very purpose of the Declaratory Judgment Act is "to enable a person who is reasonably at legal risk because of an unresolved dispute, to obtain judicial resolution of that dispute without having to await the commencement of legal action by the other side." BP Chem. Ltd. v. Union Carbide Corp., 4 F.3d 975, 977 (Fed. Cir. 1993).
In the usual case, however, a declaratory judgment plaintiff files suit because it is to the advantage of the patent owner to delay its own infringement litigation, for the purposes of negotiation or the like.Id. Here, to the contrary, there was no indication that Microthin intended to delay its infringement action, and in fact Microthin stated its intention to file suit within ten days of its letter. Thus, some of the concerns meant to be addressed by the Declaratory Judgment Act are not found here.
Prior to the hearing in this matter, Microthin wrote to the Court with new information Microthin claims mandates a dismissal of this action. According to Microthin, an Illinois resident named Ursula Kief-Baker claims to be an inventor of the patents at issue. Microthin has amended its complaint in the Illinois action to include Ms. Kief-Baker as a defendant. The implication of Microthin's amendment is that Ms. Kief-Baker is an indispensable party who is not subject to this Court's jurisdiction. At the hearing, Plaintiffs argued that there is no evidence that Ms. Kief-Baker is claiming any interest in the patents, or that she is in fact not subject to jurisdiction in Minnesota. In any event, according to Plaintiffs, even assuming that she is an indispensable party, the determination of whether she is subject to this Court's jurisdiction is premature. The Court agrees. If Ms. Kief-Baker is indispensable to the instant litigation, Microthin may seek to join her. If she is not subject to the Court's jurisdiction, she may raise that as a defense to the joinder, and the Court will determine the issue at that time.
The parties agree that whether to dismiss Plaintiffs' complaint is within the sound discretion of the Court. Having reviewed the parties' submissions, the Court is convinced that Plaintiffs are not attempting to "forum shop." Thus, the rule in Genentech applies. "[C]onsiderations of judicial and litigant economy, and the just and effective disposition of disputes" do not require a dismissal, and in fact weigh against dismissing this action. Genentech, 998 F.2d at 937. The Court therefore declines to dismiss Plaintiffs' first-filed Complaint.
B. Forum Non Conveniens
In the alternative, Microthin seeks to transfer venue of this action to the Northern District of Illinois. Microthin claims that the interests of justice and the convenience of witnesses mitigate for a transfer, but Microthin does not elaborate on these assertions. "[Defendant's] conclusory statements that transfer . . . would promote convenience and the interests of justice do not suffice." United Mortgage Corp. v. Plaza Mortgage Corp., 853 F. Supp. 311, 315 (D.Minn. 1994) (Doty, J.). Microthin has not established that a transfer of venue is appropriate, and the Court denies Microthin's Motion.
CONCLUSION
Accordingly, based upon all of the files, records, and proceedings herein, IT IS HEREBY ORDERED that Defendant's Motion to Dismiss or, in the alternative, to Transfer Venue (Clerk Doc. No. 9) is DENIED.