BELDEN INC v. NEXANS INC.
Filing
64
ORDER granting 14 Motion to Stay. The parties are instructed to notify this Court of the Delaware district court's rulings on the presently pending motions to enjoin and dismiss as soon as they are issued. The present action is STAYED pending the Delaware court's resolution of those motions. Signed by Magistrate Judge Mark J. Dinsmore on 7/26/2013. (TMA)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
BELDEN INC,
Plaintiff,
vs.
NEXANS INC.,
BERK-TEK LLC,
Defendants.
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No. 1:12-cv-01722-SEB-MJD
Order on Motion to Stay
This matter comes before the Court on Defendant’s Motion to Stay Based on a FirstFiled, Duplicative Action, Pending in the District of Delaware. [Dkt. 14.] For the following
reasons, the Motion is GRANTED.
I.
Background
On November 19, 2012, Nexans filed a complaint for declaratory action in the District of
Delaware against Belden, Nexans Inc. v. Belden Inc. et al, 1:12-cv-01491-SLR (D. Del 2012),
seeking a declaration of non-infringement and invalidity of United States Patent Nos. 6,074,503
(“503”), 7,135,641 (“641”), and 7,977,575 (“575”), as well as a judgment that Belden has
infringed United States Patent No. 5,796,046 (“046”). [Dkt. 14 Ex. A-1.]
On November 21, 2012, Belden filed suit against Nexans in this district, alleging
infringement of Patent Nos. 503, 575, 064, and 7,663,061 (“061”). [Dkt. 1.] On December 3,
2012, Nexans filed an amended complaint in the Delaware Action, seeking an additional
declaratory judgment of non-infringement and invalidity of Belden’s 061 patent. [Dkt. 14 Ex. A-
4.] Presently pending before the Delaware Court are Nexans’ motion to enjoin Belden from
prosecuting the action in this district, and Belden’s motion to dismiss.
II.
A.
Discussion
The First-Filed Rule
In this action, Nexans argues that a stay should be issued until the Delaware Court, as the
first-filed court, has decided the venue issue. [Dkt. 14 at 1.] This Court “has broad discretion to
stay proceedings as an incident to its power to control its own docket.” Clinton v. Jones, 520
U.S. 681, 706 (1997). Courts must consider the following factors in deciding to stay an action:
“(i) whether a stay will unduly prejudice or tactically disadvantage the non-moving party, (ii)
whether a stay will simplify the issues in question and streamline the trial, and (iii) whether a
stay will reduce the burden of litigation on the parties and on the court.” Pfizer, Inc. v. Apotex,
Inc., 640 F. Supp. 2d 1006, 1007 (N.D. Ill. 2009).
In the case of duplicative patent actions, the general rule is that “the first filed action is
preferred, even if it is declaratory, ‘unless consideration of judicial and litigant economy, and the
just and effective disposition of disputes requires otherwise.’” Serco Servs. Co., L.P. v. Kelley
Co., 51 F.3d 1037, 1039 (Fed. Cir. 1995) (quoting Genentech, Inc. v. Eli Lilly & Co., 998 F.2d
931, 937 (Fed. Cir. 1993), abrogated on other grounds by Wilton v. Seven Falls Co., 515 U.S.
277 (1995)).
Belden argues that two circumstances warrant departing from the general first-filed rule:
1) the convenience factors under 28 U.S.C. § 1404 favor this district, and 2) Nexans’ suit in
Delaware constituted forum shopping, which would allow this Court to bypass the first-filed
rule. See Micron Tech., Inc. v. Mosaid Techs., Inc. 518 F.3d 897, 905 (Fed. Cir. 2008). These
considerations may in fact weigh in favor of litigating this case in Indiana. However, while the
Seventh Circuit has approved of second-filed courts doing this analysis, and proceeding when it
is in the interests of justice to do so, Tempco Elec. Heater Corp. v. Omega Eng’g, Inc., 819 F.2d
746, 749-750 (7th Cir. 1987), the Federal Circuit’s rulings control this issue in patent cases
because it “raises the issue of national uniformity in patent cases, and invokes the special
obligation of the Federal Circuit to avoid creating opportunities for dispositive differences
among the regional circuits.” Genentech, Inc., 998 F.2d at 937. In fact, the Federal Circuit
expressly declined to apply Tempco to patent cases, holding that it preferred the first-filed rule.
Id. However, the Federal Circuit has not yet expressly addressed whether the second-filed court
may decide the applicability of the first-filed rule. See Ivoclar Vivadent AG v. 3M Co., No. 111183-GMS-SRF, 2012 WL 2374657 (D. Del. June 22, 2012). While district courts have come to
differing conclusions on the issue, this Court finds most convincing the reasoning in those cases
that have reserved the application of the first-filed rule for the first-filed court. See, e.g., EMC
Corp. v. Parallel Iron, LLC, No. 12-11096-FDS, 2012 WL 6213133 (D. Mass. Dec. 12, 2012);
Kimberly-Clark Corp. v. McNeil-PPC, Inc., 260 F. Supp. 2d. 738 (E.D. Wis. 2003).
It would be at odds with the promotion of judicial and litigant economy for this Court to
proceed with the analysis of the exceptions to the first-filed rule. “The first-to-file rule has
generally been interpreted to dictate not only which forum is appropriate, but also which forum
should decide which forum is appropriate.” EMC Corp., 2012 WL 6213133, at *3; See also GE
Bus. Fin. Servs., Inc. v. Spratt, No. 08 C 6504, 2009 WL 1064608, at *2, n.1 (N.D. Ill. Apr. 20,
2009) (“district courts normally stay or transfer a federal suit for reasons of wise judicial
administration whenever it is duplicative of a parallel action already pending in another federal
court.”). In this case, especially in light of the motions pending before the Delaware court, two
different federal courts would be doing the same analysis of the rule’s exceptions in cases that
are essentially identical. This would not only be a waste of judicial and litigant resources, it
would also give rise to the possibility of conflicting rulings. If both this Court and the Delaware
court were to decide to go forward with their respective cases, “two lawsuits between identical
parties concerning identical issues would then proceed simultaneously in separate courts. This is
exactly the result that the first-to-file rule was intended to avoid.” EMC Corp., 2012 WL
6213133, at *4.
B.
Motion to Stay
Belden argues that there is no justification for a stay because the facts establish that the
Delaware Court should dismiss that action. [Dkt. 37 at 5.] However, the factors to be
considered in deciding whether to issue a stay weigh in favor of its issuance in this case. Belden
has not shown that a short stay will unduly disadvantage it; Belden argues only that this action
should proceed in order to keep it on track with the related Hitachi case also pending in this
District. [Dkt. 37 at 12.] The motions pending in the Delaware court have already been briefed,
and are awaiting a decision. Thus, briefly staying the present action until those decisions are
made will not unduly disadvantage Belden.
Staying the action will certainly simplify the issues and streamline the trial. Once the
Delaware court rules, this Court will know whether continuing on with this case will raise the
specter of conflicting rulings. Further, continuing on when the Delaware court may well enjoin
the parties from litigating this action would be a waste of the Court’s and litigants’ time. Finally,
and for the reasons set forth above, a stay will reduce the burden of litigation on both the parties
and the Court. If the Delaware court grants the motion to dismiss, the stay in this case will be
lifted, and this action will proceed.
III.
Conclusion
For the reasons stated above, the Motion to Stay is GRANTED. The parties are
instructed to notify this Court of the Delaware district court’s rulings on the presently pending
motions to enjoin and dismiss as soon as they are issued. The present action is STAYED
pending the Delaware court’s resolution of those motions.
Date:
07/26/2013
Distribution:
Aaron W. Moore
FOLEY & LARDNER LLP
amoore@foley.com
Matthew A. Ambros
FOLEY & LARDNER LLP
mambros@foley.com
Matthew B Lowrie
FOLEY & LARDNER LLP
mlowrie@foley.com
Adam Arceneaux
ICE MILLER LLP
adam.arceneaux@icemiller.com
Holiday W. Banta
ICE MILLER LLP
h.banta@icemiller.com
Bert L. Slonim
KAYE SCHOLER LLP
bert.slonim@kayescholer.com
David Soofian
KAYE SCHOLER LLP
david.soofian@kayescholer.com
Mark J. Dinsmore
United States Magistrate Judge
Southern District of Indiana
Deanna L. Keysor
KAYE SCHOLER LLP
deanna.keysor@kayescholer.com
James S. Blank
KAYE SCHOLER LLP
jblank@kayescholer.com
Michelle K. Marek
KAYE SCHOLER LLP
michelle.marek@kayescholer.com
Robert Unikel
KAYE SCHOLER, LLP
robert.unikel@kayescholer.com
Jonathan G. Polak
TAFT STETTINIUS & HOLLISTER LLP
jpolak@taftlaw.com
Michael Zachary Gordon
TAFT STETTINIUS & HOLLISTER LLP
zgordon@taftlaw.com
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