IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

MARSHALL DIVISION

E-Z-EM, INC. and ACIST MEDICAL §

SYSTEMS, INC., §
Plaintiffs, §
§ CIVIL ACTION NO. 2-09-cv-124
v. §
§
MALLINCKRODT, INC. and §
LIEBEL-FLARSHEIM COMPANY, §
Defendants. §
§

REPORT AND RECOMMENDATION

The above-referenced case was referred to the undersigned United States Magistrate Judge

for pre-trial purposes in accordance with 28 U.S.C. § 636. Pending before the Court is

Defendants Mallinckrodt Inc. and Liebel-Flarsheim Company’s (collectively “Mallinckrodt”)

Motion to Dismiss Pursuant to Rule 12(b)(3) for Improper Venue or Alternatively to Stay

Proceedings Pending a Ruling on the Plaintiffs’ Motion to Transfer Filed in the Parallel Delaware

Suit. [Dkt. No. 20] After considering the parties’ arguments and the applicable law, the Court

recommends that this motion should be DENIED for the reasons set forth below.

I. Background

On April 24, 2009, E-Z-EM, Inc. and Acist Medical Systems, Inc. filed this declaratory

judgment action against Mallinckrodt, asking this Court to invalidate U.S. Patent No. 7,512,434

(“the ‘434 patent”) and declare that the ‘434 patent is not infringed by EmpowerMR. Three

weeks earlier, Mallinckrodt asserted the ‘434 patent against E-Z-EM’s product, EmpowerMR, in

the District of Delaware. Also related to this litigation is a case filed in this Court in 2007 by

Mallinckrodt accusing, inter alia, E-Z-EM’s product, EmpowerMR, of infringing U.S. Patent No.

5,868,710 (“the ‘710 patent”). See Mallinckrodt, Inc. v. E-Z-EM, Inc., 2:07-cv-262. The ‘710
patent and the ‘434 patent are both directed towards medical fluid injectors.

Mallinckrodt argues that the Court should dismiss under Federal Rule of Civil Procedure rule

12(b)(3) E-Z-EM’s declaratory judgment action because venue in the Eastern District of Texas is

improper under the “first-to-file” rule. Alternatively, Mallinckrodt argues that the Court should

stay the case pending resolution of the Delaware case. E-Z-EM argues that concerns for judicial

economy and witness convenience compel a departure from the “first-to-file” rule.

II. Analysis

The Federal Circuit applies regional circuit law to district court decisions related to venue.

See In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008) (applying the Fifth Circuit’s en

banc Volkswagen decision to rulings on transfer motions out of this circuit). As the pending

motion is one for improper venue, this Court will apply Fifth Circuit law regarding the first-to-file

doctrine.1

“The ‘first-to-file’ rule is grounded in principles of comity and sound judicial

administration.” Save Power Ltd. v. Syntek Finance Corp., 121 F.3d 947, 950 (5th Cir. 1997).

“Under the first-to-file rule, when related cases are pending before two federal courts, the court in

which the case was last filed may refuse to hear it if the issues raised by the cases substantially

overlap.” Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 603 (5th Cir. 1999) “The

concern manifestly is to avoid the waste of duplication, to avoid rulings which may trench upon

the authority of sister courts, and to avoid piecemeal resolution of issues that call for a uniform

result.” West Gulf Maritime Ass’n v. ILA Deep Sea Local 24, 751 F.2d 721, 728 (5th Cir. 1985)).

1 There is some confusion as to whether the Federal Circuit first-to-file doctrine governs in patent cases. See

Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prods., LLC., Civil Action No. 3:09-CV-0488-D, 2009 WL
2634860, *1 (N.D. Tex. 2009). The Federal Circuit applies the “general rule favoring the forum of the first-filed
case, ‘unless considerations of judicial and litigant economy, and the just and effective disposition of disputes,
requires otherwise.’” Elecs. For Imaging, Inc. v. Coyle, 394 F.3d 1341, 1347 (Fed. Cir. 2005) (quoting Genentech v.
Eli Lilly & Co., 998 F.2d 931, 938 (Fed. Cir. 1993)). Under the law of either circuit, however, the Court’s
determination here is the same.
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 The first-to-file rule seeks to “maximize judicial economy and minimize embarrassing

inconsistencies by prophylactically refusing to hear a case raising issues that might substantially

duplicate those raised by a case pending in another court.” Cadle Co., 174 F.3d at 606. If there is

a “likelihood of substantial overlap,” the court in the first-filed action should determine whether

the second-filed action must be dismissed, stayed, or transferred and consolidated. Id. “In the

absence of compelling circumstances, the court initially seized of a controversy should be the one

to decide whether it will try the case.” Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 407 (5th

Cir. 1971). The “ultimate determination of whether there actually was a substantial overlap

requiring consolidation of the two suits . . . belonged to the [first-filed court].” Id. at 408.

The Court finds that there is substantial overlap between the 2007 Texas action, the

Delaware action, and the 2009 Texas action. The three actions involve identical parties, namely

Mallinckrodt, Inc., Liebel-Flarsheim Company, E-Z-EM, Inc., and Acist Medical Systems, Inc.

The two patents at issue cover generally the same technology involving medical fluid injectors.

In fact, the two inventors of the ‘434 patent are included among the named inventors of the ‘710

patent. The Delaware action and the 2007 Texas action seek overlapping remedies, including a

permanent injunction barring E-Z-EM from making, using, and selling the EmpowerMR injector

and damages for the manufacture, use, and sale of the EmpowerMR injector. Many of the

witnesses in the 2007 Texas action and the Delaware action will be the same. In light of the

commonality of inventorship and technology, claim construction in all three cases will likely

involve overlapping issues. Therefore, the Court is of the opinion that the 2007 Texas action is

the first-filed of three substantially overlapping cases.

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 III. Conclusion

This Court recommends that jurisdiction be maintained over the 2009 Texas action and that

Mallinckrodt’s motion to dismiss be denied. The motion to stay should also be denied.

A party’s failure to file written objections to the findings, conclusions, and recommendations

contained in this Report within fourteen days after being served with a copy shall bar that party

from de novo review by the district judge of those findings, conclusions and recommendations

and, except on grounds of plain error, from appellate review of unobjected-to factual findings and

legal conclusions accepted and adopted by the district court. Douglass v. United Servs. Auto.

Ass’n, 79 F.3d 1415, 1430 (5th Cir. 1996) (en banc).

SIGNED this 26th day of February, 2010.

___________________________________
CHARLES EVERINGHAM IV
UNITED STATES MAGISTRATE JUDGE