Huawei Technologies Co. Ltd., v. Interdigital Technology Corporation, C.A. No. 6974-CS (Del. Ch. June 11, 2012)(Transcript ruling).
Issues Presented: (1) whether a motion to expedite should be granted, and (2) whether a motion to dismiss or stay should be granted based on the McWane first-filed doctrine.
Short Answer: Motion to expedite was denied and defendants’ motion to dismiss without prejudice was granted.
N.B. In Delaware, transcript rulings are often cited in briefs as persuasive authority.
Plaintiff, Huawei, was sued in the United States District Court for the District of Delaware on patent related claims. However, Huawei successfully stayed that action, and then filed a separate action in the Court of Chancery. Plaintiff filed a motion to expedite and claimed a stay or dismissal would cause irreparable harm.
Motion to Expedite
The Court denied the Plaintiffs motion to expedite because there was no irreparable injury. The Court found overreaching in the plaintiff’s motion, and that they unfairly sought multiple chances to address the same issue from different tribunals. The Court stated that to grant a motion to expedite there had to be a sufficiently colorable claim and a sufficient possibility of irreparable harm, none of which were present here. The irreparable injury being threatened was exclusion of the products from the United States market. The Court held that this is not an irreparable injury because the ITC can consider the defense with a full and fair opportunity.
The first-filed action was in the United States District Court for the District of Delaware; which is the court that has exclusive jurisdiction over federal policy to consider patent claims. The ability to present a defense in a Federal Court is not grounds for irreparable injury.
Defendants’ McWane Motion to Dismiss or Stay
The McWane motion to dismiss was granted without prejudice. A McWane motion is based on the doctrine in Delaware that, generally, when there is a prior action pending elsewhere that was filed first, in a Court capable of doing prompt and complete justice involving the same parties and the same issues, this Court has the discretion to stay or dismiss.
In this case, that first-filed action is in the Court which has sole jurisdiction in this country over patent infringement claims; and prompt justice could be provided in the earlier filed action.
The Court of Chancery reasoned that the plaintiff in this case had no relation to Delaware and it was not efficient or convenient for the plaintiff to be in Delaware. In addition, there was nothing about this case which was unique to the expertise of this Court or the State Court system of Delaware. The case primarily would evolve under a French law, European trade standard, and potentially other international standards–nothing related to Delaware. There is no reason that the United States District Court for the District of Delaware is not capable of doing complete justice in this case.