First-to-File Rule Does not Require Exact Identity of the Parties

In the recent Time Warner Cable, Inc. v. GPNE Corp. decision by the District of Delaware, Magistrate Judge Thynge found that Third Circuit law does not “specifically require the exact identity of the parties” when applying the first-to-file rule. C.A. No. 07-67-MPT, Memorandum Op. (D. Del. July 20, 2007). In Time Warner, the defendant, GPNE, had originally filed a patent infringement case in the Eastern District of Texas against Time Warner, Inc. and various other parties. Two days later, Time Warner Cable, Inc. filed a declaratory judgment action in the District of Delaware of non-infringement and invalidity of the patent that was asserted in the Texas litigation. The basis for declaratory judgment jurisdiction as alleged by Time Warner Cable, Inc. was that GPNE intended to include it in the Texas litigation as a defendant and therefore that would impact its business activities. Time Warner Cable, Inc. and Time Warner, Inc. are two separate entities (with Time Warner, Inc. owning 84% of Time Warner Cable, Inc.). Id. at 4. Subsequently, GPNE did amend its complaint in the Texas litigation to include Time Warner Cable as a defendant and moved to transfer the Delaware case to Texas.

The Court found that chronologically, GPNE was the “first-to-file” and because the Delaware case involves the same facts and the same patent the first-to-file rule will apply, despite the fact that Time Warner Cable was not originally a party to that first-filed action. Therefore, the Delaware case was dismissed and GPNE’s motion to transfer or stay was denied as moot.

In dicta, the Court made some interesting notes on forum shopping. Time Warner Cable had alleged that GPNE’s filing of the Texas action was forum shopping because it is a favorable jurisdiction for plaintiffs. The Court found no evidence that GPNE chose to litigate in Texas in “bad faith”. Id. at 10. The Court did, however, note that Time Warner Cable, Inc.’s decision to file suit in Delaware could be considered an example of forum shopping because it was filed in anticipation of them being added as a defendant to the Texas litigation.

Once again it just proves the old adage…timing is everything…

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