Patent Infringement Defendants’ Attempt to Transfer Venue Thwarted

In federal cases, venue transfer is permitted pursuant to 28 U.S.C. § 1404(a), “[f]or the convenience of parties and witnesses, in the interest of justice . . . to any other district or division where it might have been brought or to any district or division to which all parties have consented.” The defendants in a patent infringement case venued in the District of New Jersey recently failed in their attempt to transfer venue of their cases to the District of Delaware pursuant to § 1404(a). The cases involve the alleged infringement of a patent that covers Suboxone sublingual film for the treatment of opioid dependence.

The defendants argued that venue transfer was appropriate based on their consent to venue in Delaware, the discretionary factors outlined in Jumara v. State Farm Insurance, 55 F.3d 873 (3d Cir. 1995), and the first-filed rule. None of these arguments proved successful, as the magistrate judge issued reports and recommendations denying the motions of defendants Dr. Reddy’s, Teva, and Alvogen Pine Brook. And, the district judge affirmed and adopted the magistrate judge’s opinions.

After first concluding that venue for the cases was proper in the District of New Jersey pursuant to the patent venue statue, 28 U.S.C. § 1400(b), the court turned to the defendants’ arguments for transfer.

With respect to consent, the magistrate judge found, and the district judge agreed, that the parties had not consented to venue in Delaware. The defendants argued that consent to venue in Delaware in these cases is satisfied based on a prior case for infringement that involved a different Suboxone patent. The court rejected that argument because “[c]onsent is specific to one action and does not extend to other cases.” Further, transfer via consent under § 1404(b) requires the consent of “all parties,” and the plaintiff did not consent to venue in Delaware for these cases.

With respect to the Jumara discretionary factors, the magistrate judge found, and the district judge agreed, that the factors on balance did not support transfer because: (1) based on forum proximity, it would not be more efficient and convenient for the parties to litigate in Delaware; (2) transfer would not reduce court congestion; (3) a judge in Delaware previously presiding over a case involving a different Suboxone patent had no bearing on the transfer analysis, especially where the New Jersey district judge had already gained familiarity with the patent at issue in deciding a preliminary injunction motion; and (4) New Jersey was at least as convenient as Delaware, and a foreign plaintiff’s forum choice should be given deference when it chooses to sue in the defendants’ home forum.

Lastly, the magistrate judge concluded, and the district judge agreed, that the first-filed rule did not apply to support transfer. The first-filed rule allows a court to transfer a case to the district where a suit involving the same parties and issues was first filed. While a case involving the same parties had been previously litigated in Delaware, that case was not “substantially similar” to the New Jersey cases because the patents were not the same. Further, the court noted that the policy concern behind the first-filed rule (to prevent conflicting decisions being appealed to different courts) was not an issue in this case because the Delaware and New Jersey cases would all be appealed to the Federal Circuit.

Thus, despite numerous arguments in support, the defendants’ motions to transfer were denied.

Gibbons P.C. will continue to monitor and report developments.

Charles H. Chevalier, a Director in the Gibbons Intellectual Property Department, and Christine A. Gaddis, an Associate in the Gibbons Intellectual Property Department, authored this post.
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