Addressing the issue of whether an order barring parallel litigation is an injunction subject to immediate appeal, the U.S. Court of Appeals for the Federal Circuit applied its own standard and held that injunctions arbitrating between a co-pending patent declaratory judgment action and an infringement case, each pending before a different district court, will be reviewed under the law of the Federal Circuit. Lab. Corp. of Am. Holdings v. Chiron Corp., Case No. 03-1572 (Fed. Cir. Sept. 30, 2004) (Linn, R.).
Chiron owns several U.S. patents related to detecting the Hepatitis C virus in human blood and blood products. LabCorp supplies testing products that detect the presence and quantity of the Hepatitis C virus and performs such tests at its facility. Chiron threatened a lawsuit against LabCorp, and in response LabCorp entered into a standstill agreement with Chiron. Six months later, the standstill agreement expired but the parties had still not reached an agreement. LabCorp raced to the U.S. District Court for the District of Delaware and filed a declaratory judgment action against Chiron. Four hours later—before learning of the Delaware action—Chiron filed a patent infringement action against LabCorp in the U.S. District Court for the Northern District of California. Thereafter, LabCorp moved to enjoin Chiron from prosecuting the parallel litigation in California. The Delaware district court granted the motion. Chiron appealed.
The Federal Circuit had to first decide whether the Federal Circuit or Third Circuit law would be used to decide on a threshold issue affecting its jurisdiction over the appeal, i.e., whether an order barring parallel litigation constitutes an injunction subject to immediate appeal, or is it merely a procedural order which is not subject to immediate appeal. The Federal Circuit, joining the Second, Fifth and Tenth Circuits, has now concluded an injunction against co-pending litigation in other district courts is immediately appealable. The Third Circuit views such a ruling as a non-appealable venue determination.
In deciding what law to apply, the Court observed the rule articulated in Midwest Indus., Inc. v. Karavan Trailers, Inc: "a procedural issues…is nonetheless governed by Federal Circuit law if the issue pertains to patent law, if it bears an essential relationship to matters committed to our exclusive control by statute, or if it clearly implicates the jurisprudential responsibilities of this court in a field within its exclusive jurisdiction." The Court further explained national uniformity is needed in patent cases and held the law of the Federal Circuit applies to injunctions arbitrating between co-pending patent declaratory judgment and infringement cases in different district courts.
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