Genentech, Inc v. GlaxoSmithKline, LLC, No. 5:2010cv04255 - Document 47 (N.D. Cal. 2010)
Court Description: ORDER GRANTING IN PART AND DENYING IN PART MOTION 10 TO DISMISS, TRANSFER, OR STAY. Signed by Judge Jeremy Fogel on November 30, 2010.
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Genentech, Inc v. GlaxoSmithKline, LLC Doc. 47 1 **E-Filed 12/1/2010** 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN JOSE DIVISION 13 14 GENENTECH, INC., Plaintiff, 15 16 17 18 Case No. 5:10-cv-04255-JF /PVT ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, TRANSFER, OR STAY v. GLAXOSMITHKLINE LLC, [Document No. 10] Defendant. 19 20 21 Defendant GlaxoSmithKline, LLC (“GSK”) moves to dismiss, transfer, or stay the instant 22 action for declaratory relief brought by Plaintiff Genentech, Inc. (“Genentech”). The Court has 23 considered the moving and responding papers, declarations, and oral arguments of counsel 24 presented at the hearing on November 19, 2010. For the reasons discussed below, the motion 25 will be granted in part, and the action will be stayed as set forth below. The motion otherwise 26 will be denied without prejudice. 27 28 I. BACKGROUND This action is one of two federal lawsuits involving Genentech’s purification of a Case No. 5:10-cv-04255-JF/PVT ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, TRANSFER, OR STAY (JFEX1) Dockets.Justia.com 1 therapeutic antibody called Herceptin, a process which GSK claims infringes U.S. Patent Nos. 2 RE40,070 and RE41,555 (collectively, the “patents in suit”). On September 20, 2010, GSK filed 3 a complaint in the District of Delaware, alleging that Genentech and its parent company, Roche 4 Holding Ltd. (“Roche”) have infringed the patents in suit by manufacturing Herceptin and other 5 therapeutic antibodies. Later the same day, Genentech filed the instant action in this Court, 6 seeking a judicial declaration that its manufacture of Herceptin does not infringe the patents in 7 suit. Genentech subsequently amended its complaint to seek an additional declaration that the 8 patents in suit are invalid. Roche is not a party to this action, and this action does not involve 9 therapeutic antibodies other than Herceptin. Genentech claims that it was unaware of the 10 underlying controversy until GSK filed suit in Delaware. (Genentech’s Opp’n at 3:14-16.) 11 Each party asserts that the forum in which it has filed its own lawsuit is the appropriate 12 place to resolve the controversy. While the parties agree that their dispute should be litigated 13 only in a single forum, (Lerner Decl. Ex. A), they disagree as to how that forum should be 14 selected. GSK prefers that Genentech file a motion for transfer in Delaware. (Id.) Genentech 15 initially declined to do so because it believes that this Court can and should consider the issue. 16 (Id.) However, on November 12, 2010, after the briefing on the instant motion was completed, 17 and without prejudice to its position, Genentech did move in Delaware for transfer pursuant to 28 18 U.S.C. § 1404(a). (Case No. 1:10-cv-00799-GMS, Docket No. 9.) Briefing on that motion has 19 not been completed, and no hearing date has been set. 20 21 22 II. DISCUSSION A. The first-to-file rule “As between federal district courts, . . . though no precise rule has evolved, the general 23 principle is to avoid duplicative litigation.” Colo. River Water Conservation Dist. v. United 24 States, 424 U.S. 800, 817 (1976) (citations omitted). “There is a generally recognized doctrine of 25 federal comity [known as the first-to-file rule] which permits a district court to decline 26 jurisdiction over an action when a complaint involving the same parties and issues has already 27 been filed in another district.” Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th 28 Cir. 1982). “The most basic aspect of the first-to-file rule is that it is discretionary.” Alltrade, 2 Case No. 5:10-cv-04255-JF/PVT ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, TRANSFER, OR STAY (JFEX1) 1 Inc. v. Uniweld Prods., Inc. 946 F.2d 622, 628 (9th Cir. 1991). “If the first-to-file rule does 2 apply to a suit, the court in which the second suit was filed may transfer, stay or dismiss the 3 proceeding in order to allow the court in which the first suit was filed to decide whether to try the 4 case.” Intuitive Surgical, Inc. v. Cal. Inst. of Tech., No. C07-0063-CW, 2007 WL 1150787, at *1 5 -2 (N.D. Cal. April 18, 2007) (citing Alltrade, 946 F.2d at 622). 6 “In applying the first-to-file rule, a court looks to three threshold factors: ‘(1) the 7 chronology of the two actions; (2) the similarity of the parties, and (3) the similarity of the 8 issues.’” Id. (quoting Z-Line Designs, Inc. v. Bell’O Int’l LLC, 218 F.R.D. 663, 665 (N.D. 9 Cal.2003)). Genentech does not dispute that these prerequisites have been met. 10 11 B. Exceptions to the first-to-file rule Genentech contends that this Court should not apply to the first-to-file rule in this 12 instance because California clearly is the more convenient forum. “The circumstances under 13 which an exception to the first-to-file rule typically will be made include bad faith, [citation], 14 anticipatory suit, and forum shopping.” Alltrade, 946 F.2d at 628 (citations omitted). In Micron 15 Tech., Inc. v. MOSAID Techs., Inc., 518 F.3d 897, 904 (Fed. Cir. 2008), the Federal Circuit held 16 that “where the two actions [are] filed almost simultaneously,” “[i]nstead of . . . automatically 17 going with the first filed action, the more appropriate analysis takes account of the convenience 18 factors under 28 U.S.C. § 1404(a).” 19 Section 1404(a) provides that “[f]or the convenience of parties and witnesses, in the 20 interest of justice, a district court may transfer any civil action to any other district or division 21 where it might have been brought.” It is undisputed that the instant action originally could have 22 been brought either in California and Delaware. A motion for transfer pursuant to § 1404(a) lies 23 within the discretion of the court. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 24 2000). Examples of the factors to be weighed in deciding a motion for transfer include: (1) the 25 location where the relevant agreements were negotiated and executed; (2) the state that is most 26 familiar with the governing law; (3) the plaintiff’s choice of forum; (4) the respective parties’ 27 contacts with the forum; (5) the contacts relating to the plaintiff’s cause of action in the chosen 28 forum; (6) the differences in the costs of litigation in the two forums; (7) the availability of 3 Case No. 5:10-cv-04255-JF/PVT ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, TRANSFER, OR STAY (JFEX1) 1 compulsory process to compel attendance of unwilling non-party witnesses; (8) the ease of access 2 to sources of proof; (9) the presence of a forum selection clause; and (10) the relevant public 3 policy of the forum state, if any. Id. at 498-99. The Court also may consider “‘the administrative 4 difficulties flowing from court congestion.’” Decker Coal Co. v. Commonwealth Edison Co., 5 805 F.2d 834, 843 (9th Cir. 1986) (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 6 (1981)). Above all of these factors, “[t]he convenience of witnesses ‘is often the most important 7 factor considered by the court when deciding a motion to transfer for convenience.’” Kannar v. 8 Alticor, Inc., No. C-08-5505 MMC, 2009 WL 975426, at *2 (N.D. Cal. April 9,2009) (citing 9 Steelcase v. Haworth, No. CV 96-1964 JGD (AJWx), 1996 WL 806026, at *3 (C.D. Cal. May 10 15, 1996)). 11 C. 12 Micron’s effect on the first-to-file rule The parties agree that the Jones convenience factors are controlling here. However, they 13 disagree as to which district court should evaluate those factors. GSK observes correctly that 14 under Ninth Circuit precedent applying the first-to-file rule, “[a]s for the respective convenience 15 of the two courts[,] ‘normally [this argument] should be addressed to the court in the first-filed 16 action . . . The court in the second-filed action is not required to duplicate this inquiry.’” Alltrade, 17 946 F.2d at 628 (quoting Pacesetter, 678 F.2d at 96) (alteration in the original). See also Meru 18 Networks, Inc. v. Extricom Ltd., No. C-10-02021 RMW, 2010 WL 3464315, at *2 (N.D. Cal. 19 Aug. 31, 2010) (citing to Alltrade and, as the court in the second-filed action, dismissing the 20 action and declining “to make any decision regarding convenience”); Girafa.com, Inc. v. Alexa 21 Internet, Inc., No. C-08-02745 RMW, 2008 WL 4500858, at *8 (N.D. Cal. Oct. 6, 2008) (citing 22 to Alltrade and, as the court in the second-filed action, staying that action pending resolution of a 23 motion to transfer before the court in the first-filed action and declining to make any decision 24 regarding convenience). 25 However, relying upon Micron, Genentech asserts that this Court should undertake the 26 determination because GSK has asked this Court to decline jurisdiction. In Micron, the plaintiff 27 sought declaratory relief with respect to the defendant’s patents, and the next day, the defendant 28 filed a mirror-image infringement action against the plaintiff in another district. MOSAID, the 4 Case No. 5:10-cv-04255-JF/PVT ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, TRANSFER, OR STAY (JFEX1) 1 defendant in the first-filed action, moved to dismiss for lack of subject matter jurisdiction or to 2 transfer to the forum of the second-filed action. The court in the first-filed action granted the 3 motion to dismiss without reaching the motion to transfer, finding that it lacked subject matter 4 jurisdiction to grant declaratory relief because there was no “reasonable apprehension of suit” at 5 the time that the action had been filed. The district court also found that even if there were 6 subject matter jurisdiction, it still would decline to hear the case because the second-filed 7 infringement action was broader than the first filed declaratory judgment action and neither court 8 had a vested interest in the case.1 9 The Federal Circuit reversed, noting that in the interim, the Supreme Court had rejected 10 the “reasonable apprehension of suit” test, MedImmune Inc. v. Genentech Inc., 549 U.S. 118 11 (2007), and concluding that there was a controversy between the parties sufficient to give rise to 12 jurisdiction under the Declaratory Judgment Act. Micron, 518 F.3d at 902. Relevant to the 13 instant case, the Federal Circuit also held that the district court would have abused its discretion 14 in declining to hear the declaratory action “solely [based] on considerations such as tenuousness 15 of jurisdiction, broadness of case, and degree of vestment.” Id. at 904. As noted earlier, the 16 Federal Circuit held that “where the two actions [are] filed almost simultaneously,” “[i]nstead of 17 . . . automatically going with the first filed action, the more appropriate analysis takes account of 18 the convenience factors under 28 U.S.C. § 1404(a).” Id. at 904. The court noted that while “the 19 ease of obtaining a declaratory judgment [post MedImmune] could occasion a forum-seeking race 20 to the courthouse between accused infringers and patent holders,” 518 F.3d at 903, “[e]ventually, 21 robust consideration of [the convenience] factors will reduce the incentives for a race to the 22 courthouse because both parties will realize that the case will be heard or transferred to the most 23 convenient or suitable forum,” id. at 905. 24 Accordingly, under Micron, a court applying the first-to-file rule may not determine the 25 26 27 28 1 As noted in Micron, 518 F.3d at 903, the Declaratory Judgment Act vests a court with discretion to accept a declaratory judgment action in the first instance by providing that “[i]n a case of actual controversy within its jurisdiction . . . any court . . . may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a) (emphasis added). 5 Case No. 5:10-cv-04255-JF/PVT ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, TRANSFER, OR STAY (JFEX1) 1 appropriate forum without weighing the convenience factors under § 1404(a). However, Micron 2 says nothing about which court should make that determination. Because Micron’s holding was 3 directed to the court hearing the first-filed action, the Federal Circuit did not consider the instant 4 situation, in which the court in the second-filed action is asked to weigh the convenience factors. 5 Under the procedural law of the Ninth Circuit, “‘normally [this issue] should be addressed to the 6 court in the first-filed action . . . .’” Alltrade, 946 F.2d at 628. 7 The Court recognizes that Alltrade leaves parties with at least some incentive to race to 8 the courthouse, as parties might have a preference as to which court will make the convenience 9 determination. Indeed, there is a reasonable policy argument that Alltrade increases parties’ 10 incentive to race to the courthouse, as it has been observed that courts in some districts seem 11 more reluctant that others to exercise their discretion to transfer cases. If the court in the second- 12 filed action had discretion to weigh the convenience factors, there would be less incentive to race 13 into court, as the defendant could initiate a second-filed action in a separate forum, and the court 14 of the defendant’s choosing could weigh the convenience factors. Genentech contends that it 15 also would be more efficient for this Court to consider the convenience factors because the 16 relevant issues already have been fully briefed and argued in this Court, while briefing has not 17 yet been completed with respect to the transfer motion pending in Delaware. 18 However, just as “[t]he administration of justice would be chaotic indeed if one district 19 court could order another [pursuant to § 1404(a)] to divest itself of jurisdiction and to transfer a 20 case properly before it,” Nat’l Equip. Rental, Ltd. v. Fowler, 287 F.2d 43, 46-47 (2d Cir. 1961), 21 the same risk is present where the court in a second-filed action considers the convenience 22 factors in connection with a motion to dismiss pursuant to the first-to-file rule. Particularly in the 23 absence of any contrary authority, Alltrade is persuasive, and the court with jurisdiction over the 24 first-filed action should weigh the convenience factors in the first instance. 25 26 III. CONCLUSION For the reasons discussed above, the instant motion will be granted in part. This action 27 will be stayed pending a decision in the District of Delaware on Genentech’s motion to transfer. 28 GSK’s motion otherwise is denied without prejudice. 6 Case No. 5:10-cv-04255-JF/PVT ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, TRANSFER, OR STAY (JFEX1) 1 IT IS SO ORDERED. 2 3 DATED: 11/30/2010 ___________________________ JEREMY FOGEL United States District Judge 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 Case No. 5:10-cv-04255-JF/PVT ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS, TRANSFER, OR STAY (JFEX1)
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