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Archived updates for Thursday, January 06, 2005

Federal Circuit Favors First-Filed Rule for DJ Actions

In Electronics for Imaging, Inc. v. Coyle, et al. (Fed. Cir. January 5, 2005) the court began by noting that "uncertainty" in the context of the Declaratory Jugment Act does not refer to the alleged infringer's lack of confidence in its legal position. Rather, it "refers to the reasonable apprehension created by a patentee’s threats and the looming specter of litigation that results from those threats."

The appellate court also agreed with EFI that the district court abused its discretion in dismissing the "DJ" action based upon on the anticipatory nature of the suit.

While it is true that a district court may consider whether a party intended to preempt another’s infringement suit when ruling on the dismissal of a declaratory action, we have endorsed that as merely one factor in the analysis. Other factors include the convenience and availability of witnesses, or absence of jurisdiction over all necessary or desirable parties, or the possibility of consolidation with related litigation, or considerations relating to the real party in interest. 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. No such “other factors� have been cited here.

We apply the general rule favoring the forum of the first-filed case,
unless considerations of judicial and litigant economy, and the just and
effective disposition of disputes, requires otherwise. Exceptions are not rare, but we have explained that there must be sound reason that would make it
unjust or inefficient to continue the first-filed action.

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