United States District Court, N.D. Indiana, Fort Wayne Division
OPINION AND ORDER
ROGER B. COSBEY, Magistrate Judge.
This patent dispute is before the Court on Anchor Packaging, Inc.'s Motion to Transfer (Docket # 14), seeking to move this case to the United States District Court for the Eastern District of Missouri where Anchor has a related, but later-filed infringement suit pending against Mullinix Packages, Inc.
Anchor argues that the case should be transferred because (1) Mullinix filed its declaratory judgment action in anticipation of Anchor's infringement suit, (2) a critical non-party witness is outside this Court's subpoena power, but within the range of the Eastern District of Missouri, and (3) the Eastern District of Missouri is a more convenient forum. Mullinix filed a response (Docket # 23), and Anchor has filed a reply (Docket # 25); accordingly, the motion is ripe for ruling. Because this Court is equally-if not more-convenient than the Eastern District of Missouri, and because the interests of justice suggest transfer would be inappropriate, Anchor's motion will be DENIED.
II. FACTUAL AND PROCEDURAL BACKGROUND
By way of background, Anchor and Mullinix are competitors in the commercial packaging industry. (Gene Gentili Aff. ¶¶ 3, 7-8.) Prior to 2010, Anchor had been the primary supplier of mashed potato containers to Bob Evans Farms, Inc., a position now assumed by Mullinix. ( Id. at ¶¶ 7-8.) According to Mullinix, mashed potato container sales "peak dramatically" during the fourth quarter of the year, and, of course, Mullinix's ability to meet Bob Evans's demand for containers is critical to maintaining a successful relationship. ( Id. at ¶¶ 5-6.)
On October 21, 2013, counsel for Anchor sent a cease and desist letter to Mullinix asserting that Mullinix has been selling a tray that has substantially the same design as those claimed in three of Anchor's patents. (Mem. in Supp. of Def.'s Mot. to Transfer ("Def.'s Mot.") Ex. A.) The letter went on to state, "Anchor has instructed us to aggressively pursue this matter in legal action against Mullinix if we do not receive an acknowledgement of this correspondence within three (3) business days from the date of this letter." ( Id. ) The letter then explained, "my interest is a resolution of this matter and not litigation. So, if you wish to discuss this matter further, please acknowledge this letter and contact me to make arrangements for a discussion...." ( Id. )
That Friday, October 25, 2013, counsel for Mullinix acknowledged receipt of the letter in an email and informed Anchor that all communication should be directed to him. (Def.'s Mot. Ex. B at 2.) A few hours later, Anchor replied asking whether they can "discuss this matter next Wednesday, October 30, 2013?" ( Id. ) On Monday morning, October 28th, Mullinix responded, providing the times it was available. (Def.'s Mot. Ex. B at 1.) The following afternoon, at 3:08 p.m., Mullinix filed its complaint for declaratory judgment in this Court. (Docket # 1.) A few hours later, Mullinix, having not received a response to its previous email, sent another email reaffirming its availability to discuss the matter, and asked Anchor whether it was still interested in talking. (Def.'s Mot. Ex. B at 8-9.)
On Wednesday morning, October 30th, Anchor responded, asking to talk by telephone that afternoon; Mullinix responded affirmingly shortly thereafter. ( Id. at 7-8.) Later that morning, Anchor sent another email asking whether Mullnix agreed that "we should consider this discussion and any that follow as [a] resolution or settlement discussion, " and Mullinix quickly agreed. ( Id. at 6-7.) The parties were unable to settle the dispute that afternoon; during the conversation, however, Mullinix did not mention that it had already filed a complaint. Mullinix says it remained silent because it simply wanted to hear Anchor's initial proposal before deciding whether to serve process. (Resp. in Opp'n to Def.'s Mot. to Transfer ("Pl.'s Resp.") 6.)
There was no further communication between the parties until two weeks later when, on November 13th, Mullinix sent an email to Anchor, asking when, per their previous telephone conversation, Anchor anticipated providing a summary of the topics to discuss. (Pl.'s Resp. Ex. F.) Anchor never responded to the email, and instead, the next communication between the parties was Anchor's notice that it had filed suit in the Eastern District of Missouri. (Gentili Aff. ¶ 16.) After receiving notice that Anchor had filed suit, Mullinix then effected service of process. ( Id. at ¶ 17.)
III. LEGAL STANDARD
A. Federal Circuit Precedent Controls the First-Filed Analysis and Seventh Circuit Precedent Controls the 28 U.S.C. § 1404 Analysis
As a preliminary matter, there is disagreement between the parties about whether this Court should look to Seventh Circuit or Federal Circuit caselaw concerning the instant motion. The argument arises from the less-than-clear pronouncements of the Federal Circuit itself, which, on the one hand, has repeatedly indicated that "[i]n reviewing a district court's decision regarding a motion to transfer pursuant to 28 U.S.C. § 1404, we apply the law of the regional circuit." In re Link_A_Media Devices Corp., 662 F.3d 1221, 1222-23 (Fed. Cir. 2011) (applying Third Circuit caselaw); In re Genentech, Inc., 566 F.3d 1338, 1341-42 (Fed. Cir. 2009) (applying Fifth Circuit caselaw); Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 836 (Fed. Cir. 2003) (applying Seventh Circuit caselaw). But, that Court has also indicated that accepting or declining "jurisdiction in an action for a declaration of patent rights in view of a later-filed suit for patent infringement... is an issue that falls within [the Federal Circuit's] exclusive subject matter jurisdiction...." Elecs. for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1345 (Fed. Cir. 2005) (citing Serco Servs. Co., L.P. v. Kelley Co., Inc., 51 F.3d 1037, 1038 (Fed. Cir. 1995); Genentech v. Eli Lilly & Co., 998 F.2d 931, 938 (Fed. Cir. 1993) abrogated in part on other grounds, Wilton v. Seven Falls Co., 515 U.S. 277, 288-89 (1995)).
Determining whether Seventh Circuit or Federal Circuit caselaw applies in a motion to transfer an earlier-filed declaratory judgment action has led to contradictory determinations from the district courts of this circuit. Compare Caterpillar, Inc. v. ESCO Corp., 909 F.Supp.2d 1026, 1029 (C.D. Ill. 2012) (stating that in an earlier-filed declaratory judgment case that "[i]n considering a motion to transfer pursuant to 28 U.S.C. § 1404(a), the Court must apply the law of the Seventh Circuit, even in patent cases"), with Berry Floor USA, Inc. v. Faus Grp., Inc., No. 08-CV-0044, 2008 WL 4610313, at *2 (E.D. Wis. Oct. 15, 2008) ("To determine the appropriate venue for a patent law case, district courts should look to the case law of the Federal Circuit."). This uncertainty is not confined to the Seventh Circuit. See, e.g., Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prods., LLC, No. 3:09-CV-0488, 2009 WL 2634860, at *1 (N.D. Tex. Aug. 26, 2009) ("[A]lthough the parties have analyzed the first-to-file rule under Fifth Circuit authority... it is unclear whether Fifth Circuit of Federal Circuit precedent controls.").
Instructive, however, is the approach taken by yet other district courts: applying Federal Circuit precedent when analyzing the first-to-file rule, and regional circuit factors for the 28 U.S.C. § 1404 analysis. See, e.g., Woodbolt Distribution, LLC v. Natural Alts. Int'l., Inc., No. 11-1266, 2013 WL 247041, at *2 nn. 2-3 (D. Del. Jan. 23, 2013) (finding that Federal Circuit law controls application of the first-filed rule while regional circuit law governs the decision to transfer under 28 U.S.C. § 1404); Bajer Design & Mktg. v. Whitney Design, No. 09 C 1815, 2009 WL 1849813, at *1-5 (N.D. Ill. June 26, 2009) (applying Seventh Circuit factors for 28 U.S.C. § 1404 analysis and Federal Circuit precedent for application of the first-filed rule); Vanguard Prods. Grp., Inc. v. Protex Int'l., Corp., No. 05 C 6310, 2006 WL 695700, at *3-6 (N.D. Ill. Mar. 14, 2006) (same); Buztronics, Inc. v. Theory3, Inc., No. 1:04CV1485, 2005 WL 1113873, at 2-3 (S.D. Ind. May 9, 2005) (explaining that the Federal Circuit governs declaratory judgment actions in patent cases and noting that the Federal Circuit has expressly rejected the Seventh Circuit's approach on first-to-file issues, but citing Seventh Circuit caselaw when applying the 28 U.S.C. § 1404 transfer analysis).
This approach harmonizes the Federal Circuit's determination that the question of whether a first-filed declaratory judgment should take precedence over a later-filed infringement suit is a matter that implicates the need for "national uniformity in patent cases, " requiring regional circuit law to yield in that narrow instance, Genentech, 998 F.2d at 937, with the regional circuit's guidance left to inform on the relevant factors to consider on a motion to transfer. Accordingly, on the instant motion, the Court will look to Federal Circuit caselaw when applying the first-filed rule, and Seventh Circuit caselaw when examining other factors.
B. Substantive Legal Standard
Turning to the legal standard, § 1404(a) provides: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404. "Under § 1404(a), a court may transfer a case if the moving party shows that: (1) venue was proper in the transferor district, (2) venue and jurisdiction would be proper in the transferee district, and (3) the transfer will serve in the convenience of the parties and the witnesses as well as the interests of justice." Bajer, 2009 WL 1849813, at *1 (citation omitted).
Where a party files a declaratory judgment action in one district and another party later files a mirror-image infringement suit in another district, courts are instructed to consider the applicability of the first-to-file rule, which, as indicated above, is controlled by Federal Circuit precedent. Genentech, 998 F.2d at 937-38 (discussing the first-filed rule and explaining that Federal Circuit, not regional circuit, precedent controls this analysis). "The first-to-file' rule is a doctrine of federal comity, intended to avoid conflicting decisions and promote judicial efficiency, that generally favors pursuing only the first-filed action when multiple lawsuits involving the same claims are filed in different jurisdictions." Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1299 (Fed. Cir. 2012). "But the rule is not absolute; exceptions may be made if justified by ...