McDermott Will & Emery

The US Court of Appeals for the Federal Circuit denied a petition for a writ of mandamus requesting transfer of a patent infringement case, finding that the “first-to-file” rule did not warrant transfer because, even though the second-filed case involved the same products as the first-filed case, the second-filed case involved different technologies, different patents and different claims. In re. ASM Int’l., Case No. 19-118 (Fed. Cir. May 23, 2019) (Stoll, J).

ASM develops and sells multi-component furnace systems used in the deposition of thin films on semiconductor microchips. ASM maintains regional sales and support offices for those products in both San Jose, California, and Hillsboro, Oregon. Kokusai Semiconductor Equipment Corporation (HiKE) competes with ASM in the same market and owns several patents covering different aspects of wafer substrate processing and semiconductor device production. HiKE maintains US headquarters in San Jose, California; a facility in Hillsboro, Oregon; and a large sales and support center nearby in Vancouver, Washington.

In December 2017, the parties sued each other for patent infringement in the Northern District of California. HiKE’s suit alleged, in relevant part, that ASM’s furnace systems infringed seven patents that HiKE characterized as relating to the handling, processing and monitoring of wafer substrates during semiconductor fabrication. In February 2018, HiKE filed the underlying complaint in the District of Oregon, alleging that the same products infringed four different patents that, according to HiKE, related to reaction chambers configurations, including nozzles and other structures for injecting gases into those chambers.

In the underlying case, ASM filed a motion to transfer the case to the Northern District of California, arguing that the “first-to-file” rule warranted dismissal or transfer, or alternatively that HiKE had engaged in improper claim splitting. The district court denied ASM’s motion, finding that even though the accused products were the same in both actions, the accused products were highly complex and involved multiple different technologies, and the California and Oregon actions involved different patents, different claim terms and different claim elements. ASM appealed.

On appeal, ASM challenged the district court’s first-to-file rule determination, arguing that when two cases are the same or very similar, efficiency dictates that only one court decide both cases. The Federal Circuit affirmed the districts court’s transfer denial, explaining that when the overlap between actions is not “complete or nearly complete,” it generally defers to the district court’s assessment of the extent of overlap, likelihood of conflict, and comparative advantage and interest of each forum in resolving the dispute. Here, the Court found that the district court properly exercised its discretion to not transfer, because the Oregon case involved different asserted patents, claim terms and technology than were at issue in the Northern California case, and because ASM did not directly refute these factual findings.

The Federal Circuit also rejected ASM’s argument that HiKE was shopping for a forum that would be faster than the Northern District of California. The Court noted that the Oregon case was filed before the trial date was set in the California case and thus before HiKE knew that trial in the California case would be delayed until 2022. Because ASM had not shown a clear and indisputable right to have the case transferred to the Northern District of California, the Court denied ASM’s petition.

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