by Dennis Crouch
In re Seattle SpinCo, Inc. (Fed. Cir. 2020)
(a) Wapp Tech first sued UK software company Micro Focus plc (MF PLC) in E.D. Tex. for infringing several of its patent, including U.S. Patent No. 9,971,678 (system for testing app for mobile device). (b) MF PLC then had a two fold response. First, through its US subsidiaries (MF LLC and SpinCo), the company filed a declaratory judgment (DJ) action in D.Del. Then, the MF PLC moved for dismissal in the Texas case for lack of personal jurisdiction — arguing that it lacked minimum contacts with Texas. The Texas court agreed with MF and granted the motion-to-dismiss. However, the court permitted Wapp to amend its complaint to add the MF US subsidiaries (MF LLC and SpinCo). Following that amendment, the Texas case continues, and the Delaware case is stayed pending outcome of the transfer arguments. The Federal Circuit has now denied mandamus — thus it looks like the case will stay in E.D. Tex.
SpinCo then petitioned the Federal Circuit for mandamus, providing the following timeline chart:
Which Venue is the Right One: The petition for mandamus focuses on what it calls the “first-to-file rule” — arguing that a case should ordinarily remain in the court that first had proper jurisdiction over the case. Although the Texas case was filed first, the Texas court didn’t have proper jurisdiction until 2019 – a year after the Delaware case was filed. On appeal, the Federal Circuit found that the law was not so clear:
[Petitioner] cites no appellate court case that has held that first-filed status is determined by which court first secures personal jurisdiction over the parties.
Nor are we aware of any appellate case that has spoken of the first-filed rule in such terms.
Because there was no clear authority compelling action, the Federal Circuit denied mandamus.
Are We Talking in Circles: It is not surprising that there are not appellate decisions on this issue. A writ of mandamus is going to be required in order to get an appellate decision, and the court here holds that no mandamus will be granted without there first being an appellate decision. This type of prudential venue question is not appealable after final judgment — Any harm caused by an error is already done and will be a moot point by the time final judgment is reached in the case.