Friday, September 7, 2012

First-to-File Rule Trumps Forum Selection Clause

The court granted defendant's motion to transfer venue of plaintiff's infringement action under the first-to-file rule and rejected plaintiff's argument that a forum selection clause in the parties' license agreement precluded such transfer. "[Plaintiff] argues that the presence of the clause defeats the ordinary application of the first-filed rule and that '[c]ourts do not apply the 'first to file' concept where the first-filed action is filed in a forum other than the parties' chosen forum.' [Plaintiff] has failed, however, to provide any controlling authority for this proposition. Indeed, this court has previously observed that forum selection clauses are not enforced when they violate a strong public policy of the forum and that such public policy concerns are actually implicated in the first-filed context. . . . If both the present case and the Texas action go forward, the potential for 'conflicting results, confusion, expense, and waste of judicial resources' would undermine judicial efficiency. Given these public policy concerns, the court will not enforce the Delaware forum selection clause of the License Agreement, and it will not preclude the application of the first-filed doctrine."

Mitek Systems, Inc. v. United Services Automobile Association, 1-12-cv-00462 (DED August 30, 2012, Order) (Sleet, J.).

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