Radiadyne LLC v. Polyzen, Inc. DO NOT DOCKET. CASE HAS BEEN TRANSFERRED OUT

Filing 9

MEMORANDUM AND ORDER GRANTED 6 MOTION to Dismiss 1 Complaint or Transfer to North Carolina.(Signed by Judge Nancy F. Atlas) Parties notified.(sashabranner, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
RADIADYNE, L.L.C.,
Plaintiff,

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v.
POLYZEN, INC.,
Defendant.

CIVIL ACTION NO. H-11-4589

MEMORANDUM AND ORDER
This case is before the Court on the Motion to Dismiss or Transfer [Doc. # 6]
filed by Defendant Polyzen, Inc. (“Polyzen”), to which Plaintiff RadiaDyne, L.L.C.
(“RadiaDyne”) filed a Response [Doc. # 7], and Polyzen filed a Reply [Doc. # 8].
Having reviewed the full record, including pleadings from the lawsuit pending in the
United States District Court for the Eastern District of North Carolina, the Court
concludes that the two lawsuits substantially overlap. As a result, the Motion to
Transfer is granted and this case will be transferred to North Carolina for
consolidation.
I.

BACKGROUND
RadiaDyne is a medical device company in Houston, Texas. John Isham is the

founder of RadiaDyne. Polyzen is a North Carolina company that develops and
manufactures disposable medical products and devices. Polyzen is the owner of

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United States Patent No. 7,976,497 (“the ’497 Patent”) covering a medical balloon
device.
On November 21, 2011, Polyzen filed a patent infringement lawsuit in the
Eastern District of North Carolina, Civil Action No. 5:11-cv-662 (the “North Carolina
Lawsuit”). On December 13, 2011, RadiaDyne filed a “Combined Motion to Dismiss
Under Rule 12(b)(1) and to Correct Inventorship.” In the motion, RadiaDyne asks the
North Carolina court to correct the inventorship on the ’497 Patent to add John Isham
as an inventor. RadiaDyne then argues that Isham was an inventor who assigned his
rights under the ’497 Patent to RadiaDyne and, therefore, the North Carolina Lawsuit
should be dismissed because not all necessary parties had joined as plaintiffs in the
lawsuit.
On December 23, 2011, RadiaDyne filed the lawsuit before this Court.
RadiaDyne alleges that Isham developed the concept for the balloon device covered
by the ’497 Patent and engaged Polyzen to manufacture the device for RadiaDyne.
RadiaDyne alleges that Polyzen applied for the ’497 Patent without informing
RadiaDyne and without listing Isham as a co-inventor. RadiaDyne asserts causes of
action for fraud, breach of contract, unfair competition under 15 U.S.C. § 1125(a),
conversion, and trespass to chattels. RadiaDyne seeks a ruling that the ’497 Patent is

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properly its property, and asks the Court to require Polyzen to assign the patent to
RadiaDyne.
Polyzen, advising this Court of the first-filed lawsuit in North Carolina, filed
a Motion to Dismiss or Transfer. The Motion has been fully briefed and is now ripe
for decision.
II.

FIRST-FILED DOCTRINE
The first-to-file doctrine provides that “when related cases are pending before

two federal courts, the court in which the case was last filed may refuse to hear it if
the issues raised by the cases substantially overlap.” Cadle Co. v. Whataburger of
Alice, Inc., 174 F.3d 599, 603 (5th Cir. 1999); see Save Power Ltd. v. Syntek Finance
Corp., 121 F.3d 947, 950 (5th Cir. 1997). The first-to-file rule is “grounded in
principles of comity and sound judicial administration.” Id. This rule requires
“federal district courts – courts of coordinate jurisdiction and equal rank – to exercise
care to avoid interference with each other’s affairs.” Id. (citation omitted); see also
Carter v. Nicholson, 2007 WL 3316086, *4 (5th Cir. Nov. 8, 2007). The seminal
inquiry under the first-to-file rule is whether there is substantial overlap between the
two cases. See Save Power Ltd., 121 F.3d at 950-51. If the cases do not completely
overlap, then the court considering transfer should consider whether the cases should
be consolidated, the extent of the overlap, the likelihood of conflict, and the

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comparative advantage and interest of each forum in resolving the dispute. Id.
(citation omitted). The three primary concerns of the rule are: (1) to “avoid the waste
of duplication;” (2) to “avoid rulings which may trench upon the authority of sister
courts;” and (3) to “avoid piecemeal resolution of issues that call for a uniform result.”
See id. at 950. The second-filed court should transfer an action to the first-filed court
if it determines the issues in the two actions “might substantially overlap.” See Cadle
Co., 174 F.3d at 606, see also CitiFinancial Corp. v. Harrison, 453 F.3d 245, 251 (5th
Cir. 2006) (“the prudent – and perhaps required – course would [be to] transfer the
matter to the judge with the first-filed case . . .”).
RadiaDyne notes correctly that the causes of action asserted in this case are
state law claims and a federal Unfair Competition claim pursuant to 15 U.S.C.
§ 1125(a), while the cause of action in the North Carolina Lawsuit is alleged patent
infringement. A pivotal issue in both cases, however, is what interest, if any,
RadiaDyne has in the ’497 Patent. In the North Carolina case, RadiaDyne asks the
North Carolina court “to correct inventorship of the patent-in-suit by adding John
Isham as an inventor on [the ’497 Patent].” See RadiaDyne’s Combined Motion to
Dismiss and to Correct Inventorship, Doc. # 10 in North Carolina Lawsuit, p. 1. In
the case before this Court, RadiaDyne asks for a finding that “the ’497 Patent is

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properly the property of RadiaDyne” and for an order for “Polyzen to assign to
RadiaDyne the ’497 Patent.” See Complaint [Doc. # 1], p. 13.
Although the causes of action in the two lawsuits are different, RadiaDyne
asserts and seeks ownership of the ’497 Patent in both lawsuits. Inconsistent rulings
on this important issue could occur if the cases remain separate. As a result, the Court
concludes that the two lawsuits substantially overlap, particularly on this significant
issue.
The Court notes also that, because the two lawsuits substantially overlap,
having the two cases proceed in different courts is an inefficient use of the time and
resources of the parties and the judicial system. Because the North Carolina lawsuit
is the first-filed, this case should be transferred to North Carolina where, at the
discretion of the North Carolina court, it can be consolidated into the North Carolina
lawsuit.
III.

CONCLUSION AND ORDER
The North Carolina Lawsuit and this case substantially overlap because a

crucial issue in both cases is what interest, if any, RadiaDyne has in the ’497 Patent.
Accordingly, it is hereby
ORDERED Polyzen’s Motion to Transfer [Doc. # 6] is GRANTED and this
case will be TRANSFERRED by separate order to the United States District Court

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for the Eastern District of North Carolina, the court with the first-filed action, for
consolidation into the North Carolina Lawsuit.
SIGNED at Houston, Texas, this 24th day of February, 2012.

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