On November 26, 2013, Silver Line Building Products LLC (“Silver Line”) filed a declaratory judgment complaint in the Eastern District of New York against J-Channel Industries Corporation (“J-Channel”), seeking a declaration that Silver Line’s window products do not infringe J-Channel’s U.S. Reissue Pat. No. 40,041 (“the ’041 patent”; title – “Window Frame for Manufactured Housing”), and that the ’041 patent is invalid and unenforceable.  Just over one month prior to this filing (Oct. 9, 2013), J-Channel filed a patent infringement complaint in the Eastern District of Tennessee against Silver Line’s parent corporation alleging that Silver Line’s window products infringe the ’041 patent.  J-Channel filed an amended complaint on December 9, 2013, naming Silver Line as the more appropriate defendant.  Pending in the Eastern District of Tennessee is Silver Line’s motion to transfer the infringement action to the Eastern District of New York.

On March 24, 2014, the Eastern District of New York granted J-Channel’s motion to stay the declaratory judgment action pending the outcome of Silver Line’s motion to transfer.  In granting the motion, Judge Joseph Bianco held that “the Tennessee Action is the first-filed action under the Federal Circuit’s first-to-file rule, which ‘generally favors pursuing only the first-filed action when multiple lawsuits involving the same claims are filed in different jurisdictions’” (for the purposes of maintaining national uniformity and promoting judicial efficiency in patent cases).  Notwithstanding the fact that Silver Line became a party to the Eastern District of Tennessee infringement action after the declaratory judgment action was filed, Judge Bianco held that “it is clear that the Tennessee Action was filed first, and both [actions] involve the same patent and the same allegedly infringing products” (holding that there is no requirement that the parties to both actions be identical in order for the first-to-file rule to apply).

Further, Judge Bianco held that since “the Tennessee Action is the first-filed action, the Court concludes that the Eastern District of Tennessee is the more appropriate forum to determine whether an exception to the first-to-file rule applies.”  In making this decision, Judge Bianco found it significant that Silver Line’s motion to transfer is fully briefed and pending before the Eastern District of Tennessee, and “for this Court to issue a ruling would risk inconsistent results, exactly the outcome to be avoided by the rule in the first place.”  Nevertheless, Judge Bianco noted in the decision that “several convenience factors actually favor the Eastern District of Tennessee over this district” including (1) there are over twenty other cases pending in the Eastern District of Tennessee related to alleged infringement of the ’041 patent, and (2) the location of key witnesses.

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