SMIC, Ams. v. Innovative Foundry Techs. LLC

Decision Date21 July 2020
Docket NumberCase No. 20-cv-02256-JSW
Citation473 F.Supp.3d 1021
Parties SMIC, AMERICAS, et al., Plaintiffs, v. INNOVATIVE FOUNDRY TECHNOLOGIES LLC, Defendant.
CourtU.S. District Court — Northern District of California

Ruffin B. Cordell, Pro Hac Vice, Fish & Richardson P.C., Washington, DC, Betty Hong Chen, Fish and Richardson PC, Redwood City, CA, for Plaintiffs.

Evan Nadel, Mintz Levin Cohn Ferris Glovsky and Popeo, P.C., San Francisco, CA, for Defendant.

ORDER GRANTING MOTION TO DISMISS

Re: Dkt. No. 20

JEFFREY S. WHITE, United States District Judge

Now before the Court for consideration is Defendant Innovative Foundry Technologies, LLC's ("Defendant's" or "IFT's") motion to dismiss, or in the alternative, to stay the action based on the first-to-file doctrine. The Court has considered the parties’ papers, relevant legal authority, and the record in the case and finds this case suitable for disposition without oral argument. See N.D. Cal. L-R 7-1(b). For the foregoing reasons, the Court HEREBY GRANTS Defendant's motion and dismisses this action without prejudice.

BACKGROUND

On April 2, 2020, Plaintiffs SMIC, Americas, Semiconductor Manufacturing International (Shanghai) Corporation ("SMIC Shanghai"), Semiconductor Manufacturing International (Beijing) Corporation ("SMIC Beijing"), Semiconductor Manufacturing International (Tianjin) Corporation ("SMIC Tianjin"), Semiconductor Manufacturing International (BVI) Corporation ("SMIC BVI"), Semiconductor Manufacturing North China (Beijing) Corporation ("SMNC"), and Semiconductor Manufacturing South China (Beijing) Corporation ("SMSC") (collectively, "Plaintiffs") filed this action against Defendant Innovative Foundry Technologies. (Dkt. No. 1.) Plaintiffs seek a declaratory judgment of non-infringement of U.S. Patent Nos. 6,580,122 ("’122 Patent") ; 6,806,126 ("’126 Patent") ; 6,933,620 ("’620 patent") ; and 7,009,226 ("’226 Patent").

Prior to the filing of this action on December 20, 2019, IFT filed a lawsuit in the Western District of Texas, Innovative Foundry Techs. LLC v. Semiconductor Mfg. Int'l Corp. , No. 6:19-cv-00719-ADA (W.D. Tex. Dec. 20, 2019) (the "Texas Litigation"), against defendants Semiconductor Manufacturing International Corporation ("SMIC"), Broadcom Incorporated and Broadcom Corporation (collectively, "Broadcom"), Cypress Semiconductor Corporation ("Cypress"), and DISH Network Corporation ("DISH Network"). (Dkt. 20-2, Declaration of Evan S. Nadel ("Nadel Decl."), Ex. 1.) In the Texas Litigation, IFT alleges that the defendants’ products and methods of manufacturing infringe the ’122 Patent, ’126 Patent, ’620 Patent, and ’226 Patent —the same patents at issue here. (Compl. ¶¶ 15, 17.) Specifically, IFT asserts that all semiconductor devices manufactured by the Texas defendants using 65 nanometer or lower technology infringe the patents. (Id. ) On April 14, 2020, IFT filed a first amended complaint in the Texas Litigation, adding as defendants the following subsidiaries of SMIC: SMIC Shanghai, SMIC Beijing, SMIC BVI, SMIC North China, and SMIC South China.1 (See Dkt. No. 20-3, Nadel Decl., Ex. 2.) As a result of the amended complaint in the Texas Litigation, each SMIC subsidiary that is a plaintiff in this action is now a defendant in the Texas Litigation except SMIC, Americas. (Id. ) IFT now moves to dismiss this case under the first-to-file rule in light of the Texas Litigation. In the alternative, IFT asks the Court to stay this case pending resolution of the Texas Litigation.

ANALYSIS
A. Applicable Legal Standard.

The first-to-file rule is a " ‘doctrine of federal comity which permits a district court to decline jurisdiction over an action when a complaint involving the same parties and issues has already been filed in another district.’ " Apple Inc. v. Psystar Corp. , 658 F.3d 1150, 1161 (9th Cir. 2011) (quoting Pacesetter Sys. Inc. v. Medtronic, Inc. , 678 F.2d 93, 94–95 (9th Cir. 1982) ). This rule "was developed to ‘serve[ ]the purpose of promoting efficiency well and should not be disregarded lightly.’ " Alltrade, Inc. v. Uniweld Prods., Inc. , 946 F.2d 622, 625 (9th Cir. 1991) (quoting Church of Scientology v. U.S. Dep't of the Army , 611 F.2d 738, 750 (9th Cir. 1979) ). In addition to judicial efficiency, the rule helps "prevent[ ] the risk of inconsistent decisions that would arise from multiple litigations of identical claims." Ruckus Wireless, Inc. v. Harris Corp. , 11–cv–019440–LHK, 2012 WL 588782 at *2 (N.D. Cal. Feb. 22, 2012) ; see also Church of Scientology , 611 F.2d at 750 ("The doctrine is designed to avoid placing an unnecessary burden on the federal judiciary, and to avoid the embarrassment of conflicting judgments."). In patent litigation, "[t]he first-filed action is preferred, even if it is declaratory, ‘unless considerations of judicial and litigant economy, and the just and effective disposition of disputes, require otherwise.’ " Barnes & Noble, Inc. v. LSI Corp. , 823 F. Supp. 2d 980, 986–87 (N.D. Cal. 2011) (quoting Serco Services Co., L.P. v. Kelley Co., Inc. , 51 F.3d 1037, 1039 (Fed. Cir. 1995) ).

Under the first-to-file doctrine, a district court may choose to transfer, stay, or dismiss an action where a similar complaint has been filed in another district court. See Alltrade , 946 F.2d at 623. The court must consider three threshold factors in deciding whether to apply the first-to-file rule: (1) the chronology of the two actions; (2) the similarity of the parties; and (3) the similarity of the issues. Ward. v. Follett Corp. , 158 F.R.D. 645, 648 (N.D. Cal. 1994) ; see also Apple Inc. , 658 F.3d at 1161. However, the first-to-file rule is "not a rigid or inflexible rule to be mechanically applied, but rather is to be applied with a view to the dictates of sound judicial administration." Pacesetter , 678 F.2d at 95. Accordingly, "[t]he most basic aspect of the first-to-file rule is that it is discretionary; ‘an ample degree of discretion, appropriate for disciplined and experienced judges, must be left to the lower courts.’ " Barnes & Noble , 823 F. Supp. 2d at 987 (quoting Alltrade , 946 F.2d at 628 ). A court's decision to depart from this general rule must present a "sound reason that would make it unjust or inefficient to continue the first-filed action." Id. (quoting Genentech v. Eli Lilly and Co. , 998 F.2d 931, 938 (Fed. Cir. 1993) ).

B. The Threshold Factors Warrant Application of the First-To-File Rule.
1. Chronology of the actions.

The first factor in assessing whether relief is warranted under the first-to-file rule requires an assessment of the chronology of the two actions. Here, the parties dispute which action should be considered the first filed. IFT filed the original complaint in the Texas Litigation on December 20, 2019. Plaintiffs filed this declaratory judgment action on April 2, 2020. On April 14, 2020, IFT filed the amended complaint in the Texas Litigation, which names as defendants all but one of the SMIC subsidiaries who are Plaintiffs here.

IFT argues the date the original complaint was filed in the Texas Litigation is the relevant date for determining the chronology of the actions. According to IFT, for purposes of the first-to-file analysis, it is irrelevant that Plaintiffs filed this action before IFT filed the amended complaint in the Texas Litigation. Plaintiffs disagree. They argue the date of the amended complaint's filing in the Texas Litigation should govern here because the Texas amended complaint does not relate back to the original complaint under Fed. R. Civ. P. 15(c).

The parties acknowledge that there are two lines of cases addressing the interplay between the first-to-file rule and Rule 15 ’s relation back doctrine. In the first line of cases, courts have found that the filing of a complaint triggers the first-filed rule regardless of whether the plaintiff later amends the complaint. See Barnes & Noble , 823 F. Supp. 2d at 987 ; Hilton v. Apple Inc. , No. C-13-2167, 2013 WL 5487317, at *6 (N.D. Cal. Oct. 1, 2013) ; Ford v. [24]7.ai, Inc. , No. 18-CV-02770-BLF, 2019 WL 570756, at *3 (N.D. Cal. Feb. 12, 2019) (collecting cases). Courts in the second line of cases, however, consider an action first filed, even if not chronologically first, if the claims relate back to an original complaint that was chronologically filed first. See Halo Electronics, Inc., v. Bel Fuse Inc. , No. C-07-06222 RMW, 2008 WL 1991904, at *2 (N.D. Cal. May 5, 2008).

This Court agrees with the courts finding the relation back inquiry unnecessary and finds that the "filing of a complaint triggers the first-filed rule, regardless of whether the plaintiff later amends the complaint." Hilton , 2013 WL 5487317 at *6. This approach "comport[s] with the general liberality of Rule 15." Id. (citing Barnes & Noble , 823 F. Supp. 2d at 988 ). Moreover, requiring a relation back analysis would be in tension with the first-to-file rule's aims of promoting judicial efficiency and lessening the risk of inconsistent decisions. See Ruckus Wireless, Inc. v. Harris Corp. , 2012 WL 588792 at *2. Accordingly, the Court finds that no relation back analysis is necessary. Because the original complaint in the Texas Litigation, filed on December 20, 2019, preceded the filing of this complaint on April 2, 2020 by three months, the Texas Litigation is the first-filed action. See Advanta Corp. v. Visa U.S.A., Inc. , No. CIV.A. 96-7940, 1997 WL 88906, at *3 (E.D. Pa. Feb. 19, 1997) ("Advanta cannot avoid application of the first-filed rule simply by asserting that it was not initially a party to the earlier filed action. The first-filed rule turns on which court first obtains possession of the subject of the dispute, not the parties of the dispute.").

The Court also notes that even if it were to undertake the relation back inquiry, the outcome would likely not change. Fed. R. Civ. P. 15(c) governs when an amended pleading relates back to the date of the original pleading. Plaintiffs argue that IFT's amended complaint in the Texas Litigation fails to satisfy...

To continue reading

Request your trial
2 cases

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT