Federal Circuit invokes first-to-file rule in affirming dismissal of third party beneficiary and alter ego claims

The Federal Circuit affirms dismissal of complaint under the first-to-file rule. A California district court dismissed a declaratory judgment suit in light of a parallel action involving similar issues and parties, filed one day earlier in Texas.

Futurewei Techs., Inc. v. Acacia Research Corp., __ F.3d __ (Fed. Cir. Dec. 3, 2013) (Reyna, Mayer, TARANTO) (C.D. Cal.: Guildford) (1 of 5 stars)

Appellants sought to keep two claims in the declaratory judgment suit: third party beneficiary and alter ego. The Federal Circuit held that, although the district court relied on alternative grounds in dismissing those particular claims, the Federal Circuit could rely on the first-to-file rule in affirming the dismissal. With regard to the third party beneficiary claim, the Federal Circuit held that it would be just and efficient to have the claim litigated in the Texas action where appellants already raised a licensing defense, and that none of the exceptions to the rule applies. As to the alter ego claim, the Federal Circuit similarly held that the claim directly relates to the appellants' rights under the license agreement at issue in Texas and should thus be litigated in that action.