Laboratory Corp. of America v. Chiron Corp.

• Decision Date: 30 September 2004
• Docket Number: No. 03-1572.,03-1572.
• Citation: 384 F.3d 1326
• Parties: LABORATORY CORPORATION OF AMERICA HOLDINGS, Laboratory Corporation of America, and National Genetics Institute, Plaintiffs-Appellees, v. CHIRON CORPORATION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1326

384 F.3d 1326

LABORATORY CORPORATION OF AMERICA HOLDINGS, Laboratory Corporation of America, and National Genetics Institute, Plaintiffs-Appellees, v. CHIRON CORPORATION, Defendant-Appellant.

No. 03-1572.

United States Court of Appeals, Federal Circuit.

DECIDED: September 30, 2004.

Appeal from the United States District Court for the District of Delaware, Sue L. Robinson, J.

Stephen S. Rabinowitz, Fried, Frank, Harris, Shriver & Jacobson LLP, of New York, New York, argued for plaintiffs-appellees. With him on the brief was James W. Dabney.

Richard G. Greco, Kaye Scholer LLP, of New York, New York, argued for defendant-appellant.

Before MICHEL, GAJARSA, and LINN, Circuit Judges.

LINN, Circuit Judge.

Chiron Corporation ("Chiron") appeals from a decision of the United States District Court for the District of Delaware ("district court") granting a motion brought by Laboratory Corporation of America Holdings, Laboratory Corporation of America, and National Genetics Institute (collectively, "LabCorp") to enjoin Chiron from prosecuting a parallel litigation co-pending in the United States District Court for the Northern District of California. Lab. Corp. of Am. Holdings v. Chiron Corp., No. 03-364-SLR (D.Del. Aug. 4, 2003) ("Order"). Because the district court did not abuse its discretion in granting the motion to enjoin Chiron from maintaining the co-pending litigation in the Northern District of California, we affirm.

I. BACKGROUND

Chiron developed nucleic acid testing methods for detecting Hepatitis C virus in human blood and blood products. See, e.g., U.S. Patent No. 5,712,088. Chiron owns several U.S. patents related to various aspects of its Hepatitis C virus-related inventions, including U.S. Patent Nos. 5,712,088; 5,714,596; 5,863,719; and 6,074,816 at issue in litigations filed in both the District of Delaware and the Northern District of California. LabCorp supplies nucleic acid testing products for detecting the presence and quantity of Hepatitis C virus and performs Hepatitis C virus nucleic acid tests at its facility in North Carolina.

On November 21, 2002, Chiron informed LabCorp that it would file a patent infringement complaint against LabCorp the same day unless LabCorp signed a standstill agreement and undertook licensing negotiations. LabCorp executed a First Standstill Agreement that day. The parties subsequently executed a Second Standstill Agreement, which expired in early April 2003.

Negotiations and discussions continued between the parties about extending the Second Standstill Agreement, but were unsuccessful. After LabCorp failed to sign a proposed extension, Chiron filed suit against LabCorp in the United States District Court for the Northern District of California ("California action"). The California action was docketed as having been filed on April 9, 2003 at 5:50 P.M. PST, or 8:50 P.M. EST. On that same day, unbeknownst to Chiron, LabCorp had earlier filed a declaratory judgment lawsuit against Chiron in the United States District Court for the District of Delaware ("Delaware action"). The Delaware action was docketed as having been filed on April 9, 2003 at 4:27 P.M. EST, approximately four hours before the California action was filed in the Northern District of California. The same patents are in dispute in both cases.

LabCorp brought a motion in the Delaware district court to enjoin the California action. Chiron responded with a cross-motion to dismiss, stay, or transfer the Delaware action. The Delaware district court granted LabCorp's motion and denied Chiron's cross-motion. Chiron appealed the grant of the motion to enjoin the California action, but did not appeal the denial of its cross-motion to dismiss, stay, or transfer the Delaware action.

II. ANALYSIS

A. Threshold Issues

The unique nature of this court's jurisdiction in patent cases often requires the court to consider whether to apply regional circuit law or Federal Circuit law to particular issues presented. In many cases, the choice is not critical, given the uniformity of federal jurisprudence governing much of the law. But for some issues, there are meaningful differences that require us to decide which law governs.

Here, we are called upon to decide between Federal Circuit and Third Circuit law on threshold issues affecting our jurisdiction over this appeal. As noted above, this is an appeal by Chiron from the grant by the Delaware district court of LabCorp's motion to enjoin Chiron's prosecution of the parallel action filed by Chiron in California four hours after the Delaware action. For clarity, when we speak of "parallel actions," we are referring to co-pending patent infringement and declaratory judgment actions involving the same patents and the same parties. Chiron contends that Federal Circuit law governs and that under the law of this circuit, the grant of an injunction against a parallel action is immediately appealable under 28 U.S.C. § 1292(a)(1). LabCorp counters that regional circuit law governs and that under the law of the Third Circuit, the grant of the motion to enjoin the parallel action is interlocutory, is reviewable only by petition for writ of mandamus, and is not ripe for appellate review.

1. Applicable Law

Section 1292(a)(1) provides:

[T]he courts of appeals shall have jurisdiction of appeals from ... Interlocutory orders of the district courts of the United States ... granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions....

28 U.S.C. § 1292(a)(1) (2000).

Although the plain language of the statute appears to be both unambiguous and compelling, there is a circuit split concerning whether injunctions enjoining co-pending actions in other courts are appealable under 28 U.S.C. § 1292(a)(1). See 19 James Wm. Moore et al., Moore's Federal Practice § 203.10 [6][b][i], at 203-38 & n. 85 (Matthew Bender 3d ed. 2004) ("Moore's Federal Practice"); HBE Leasing Corp. v. Frank, 48 F.3d 623, 632 n. 6 (2d Cir.1995) (observing the circuit split). Several courts of appeals, including this court and the Second, Fifth, and Tenth Circuits, have concluded that injunctions against co-pending litigation in other district courts are appealable under section 1292(a)(1). See, e.g., Katz v. Lear Siegler, Inc., 909 F.2d 1459, 1461 (Fed.Cir.1990) ("[T]he grant of an injunction against continuing suit in another forum is appealable as of right, 28 U.S.C. § 1292(a)...."); Klein v. Adams & Peck, 436 F.2d 337, 339 (2d Cir.1971) ("Because [the district court]'s directive is an injunction which unconditionally bars plaintiff from proceeding in his other actions, that order is a decision from which appeal may be taken."); Phillips v. Chas. Schreiner Bank, 894 F.2d 127, 130 (5th Cir.1990) ("[T]his circuit has long recognized a clean distinction between injunctions prohibiting proceedings in other courts, which are appealable, and orders, whether or not styled `injunctions,' that control proceedings only in the court that issues the order. Thus, if a district court acts to halt proceedings in another court, its action is indeed an injunction within the meaning of section 1292(a)(1) ...." (internal citation, brackets, and quotation marks omitted)); MAI Basic Four, Inc. v. Basis, Inc., 962 F.2d 978, 981 (10th Cir.1992) ("Since [Baltimore Contractors v. Bodinger, 348 U.S. 176, 75 S.Ct. 249, 99 L.Ed. 233 (1955)], the courts of appeals have generally adopted a per se rule for dealing with orders like the instant one, holding that an order that prohibits a party from pursuing litigation in another court is unquestionably an injunction for purposes of interlocutory appeal under 28 U.S.C.A. § 1292(a)(1)." (internal quotation marks omitted)); FDIC v. Geldermann, Inc., 975 F.2d 695, 697 (10th Cir.1992) (quoting and following MAI Basic Four, 962 F.2d at 981). By contrast, the Third Circuit in Hershey Foods Corp. v. Hershey Creamery Co., 945 F.2d 1272 (3d Cir.1991), has held that an order barring the defendant from pursuing related litigation in a different forum is not appealable because it is in essence a venue determination that does not affect the substance of the dispute. Id. at 1278-79.

LabCorp relies on Katz v. Lear Siegler, Inc., 909 F.2d 1459 (Fed.Cir.1990), to argue that an appeal from an injunction is a procedural issue not unique to patent law and that we should apply the law of the Third Circuit. LabCorp argues that because an order enjoining a parallel action is only appealable in the Third Circuit via a writ of mandamus, which Chiron has not sought, this court must dismiss the appeal. Chiron responds that under this court's precedent in Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931 (Fed.Cir.1993), overruled in part on other grounds by, Wilton v. Seven Falls Co., 515 U.S. 277, 289, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995), Federal Circuit law controls and that this court has jurisdiction under 28 U.S.C. § 1292(a)(1).

In Katz, this court reviewed an order granted by the District of Massachusetts enjoining a patent owner from prosecuting two other pending actions against different defendants in the Western District of New York. 909 F.2d at 1461. Katz used the abuse of discretion standard of review, stating simply that the court was "[a]pplying the law of the First Circuit." Id. at 1462 (citing Mass. Ass'n of Older Ams. v. Sharp, 700 F.2d 749, 751 (1st Cir.1983); Planned Parenthood League of Mass. v. Bellotti, 641 F.2d 1006, 1009 (1st Cir.1981)). In Katz, the application of the abuse of discretion standard was not controversial. This standard has been recognized to be generally applied by federal courts of appeals in reviewing the grant or denial of injunctive relief. 19 Moore's Federal Practice § 206.08, at 206-44.1 to 206-44.2 & n. 12 (noting that the grant or denial of injunctive relief in the federal courts of appeals are reviewed for an abuse of discretion). The statement in Katz that the court was "[a]pplying the law of the...